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Tuesday, October 10, 2006

SEZ in Tuticorin Port Land

Tamil Nadu perceives Special Economic Zones (SEZs) as centres to provide employment to skilled and unskilled labour force by utilising uncultivated fallow land. For farmers and land-owners, who are dependent upon rains and often suffer from negative returns, SEZs provide an exciting option for exit.

Irrespective of what is happening in other states, the SEZ development process in Tamil Nadu is going on smoothly. Acquisition of land by the state government or purchase of land by developers has not become a major issue in the state.

One of the reasons for this peaceful development is that most of the SEZs proposed in the state are industry-specific and they do not require land in excess of 330-400 acres. Often the land requirement is much less. This is in contrast to the big SEZs being set up in states like Maharashtra or Haryana.

In Tamil Nadu, the land is being made available to the SEZ promoters through multiple channels.

The principal source of land in Tamil Nadu is the State Industries Promotion Council of Tamil Nadu (SIPCOT) which has already acquired land, mostly ‘low biological potential land’ and dry stretches, to be leased out to industries in the periphery of Chennai and other cities and towns. All the major industries like Sterlite in Tuticorin, Hyundai at Irungattukottai, St.Gobain, Nokia, Flextronics, Motorola etc at Sriperumbudur, are being built on SIPCOT land. Some of them like Nokia are developing SEZs on the land allotted to them.

Land, previously owned by large corporate houses like Standard Motors is also being made available to the SEZs. Tuticorin and Ennore ports have proposed SEZs in their lands. Nanguneri in the south, is the large multi-product SEZ, mostly on government-owned fallow land.

In all these cases owners willingly sell their lands because agriculture in most parts of the districts close to Chennai and other cities has been a loss-making proposition and many farmers had left their land fallow for many years.

A good price and a large sum of money at one go was a great attraction for them and they readily sold the land to government agencies or corporate houses or individuals. Market dynamics play the pivotal role in getting land for non-farm activities in Tamil Nadu, says Ramesh Nair from Jones Lang Laselle.

Real estate market analysts like Rajesh Babu of RECS group says that there could be farmers resistance only if somebody ventured to acquire land in the Cauvery delta region or fertile regions in the Madurai or Kanyakumari districts.

This is most unlikely in the near future.

Source: The Financial Express

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