Business Today

Paradise regained?

From the outside, there is little evidence of the angst locals feel over the proposed (and now seemingly scrapped) establishment of Special Economic Zones (SEZs) across Goa. The state may have set the course for the success (or failure) of SEZs.

Rahul Sachitanand | Print Edition: January 27, 2008

Political volleyball: Fate of SEZs in the state appears bleak
Fate of SEZs in Goa appears bleak
It is nearly midnight. Baga Beach in North Goa is packed with local and foreign tourists swarming the local bars. From the outside, there is little evidence of the angst locals feel over the proposed (and now seemingly scrapped) establishment of Special Economic Zones (SEZs) across the state.

While some tourists discuss their plans for the next few days, others lazily browse the gift shops nearby. Baga is among the best-known beaches in the state and for those people visiting from large Indian cities with curfews, the energy of the place so late in the evening can be a pleasant surprise.

Life hasn’t, however, been so simple over the last few weeks for the café and store owners at many of Goa’s best-known beaches. In late December, tourists had been warned to stay away, with agitators such as the Goa Movement Against SEZs (GMAS), convened by a former legislator and Tourism Minister, Mathany Saldanha, leading the protests. For a state that receives around 10 lakh tourists annually (compared to a total of around 15 lakh residents), these threats could have cut off perhaps its largest lifeline. Quick action was the need of the day, and the Goa CM Digambar Kamat duly obliged.

He announced the scrapping of all SEZs in the state and, after some dissent, he also succeeded in mustering support from a seeminglyreluctant Union government. Yet, for a state so used to playing host to a cross-section of tourists (in the peak Christmas and New Year season some 800 charter flights landed in the state ferrying around 600,000 tourists), the SEZ storm couldn’t have come at a worse time.

“We will protect the rights of the people and if SEZs are going to do more harm than good, then we are opposed to them,” Kamat told BT before air-dashing to Delhi last fortnight to support his case. Earlier, the Board of Approvals of the Government of India had notified three SEZs—Meditab Specialties of Cipla, Peninsula Pharma Research Centre and K. Raheja Corp—spread across 431 acres in the state, with an investment of Rs 27,136 crore and planned employment of around 1,75,000. Now, the fate of all these, with a Rs 500 crore investment already made, appears uncertain.

According to the GMAS, employment estimates of 17 SEZs are pegged at around 9,27,100 jobs, but the list at the employment exchange doesn’t cross 100,000. “We are the smallest state in the country and do not have the trained manpower to man these SEZs,” points out GMAS’ Saldanha. He contends that each employee will bring in three-four family members if they work in the state, further raising the population by around 2.7 lakh.

A vocal critic of the SEZ plan is Goa’s former CM and Leader of the Opposition Manohar Parrikar. He alleges widespread fraud in the grant of land to these units. “Land has been sold at a fraction of the market value to these companies,” he claims, contending that the current state administration granted SEZ status to these projects even before a proper policy was in place. Parrikar adds that several meetings were called and land for SEZ granted without all officials being consulted.

According to him, the state government has been “less than transparent with land and financial dealings on this front, specifically with allotments at the Verna industrial estate in the state. “Land prices for Verna (stage) IV (Verna is a large industrial estate in the south) have been fixed at just Rs 750 per square metre and this is just a fraction of the prevailing market rate,” says Parrikar.

Besides the political gamesmanship between Parrikar and Kamat, there is growing popular opinion in the state against SEZs, with most locals worried about the sheer strain on infrastructure these units will bring. “We don’t want to repeat Bangalore’s mistakes here,” says Dr Oscar Rebello, Convenor of the Goa Bachao Andolan (and a consultant physician). “Goa barely has enough power for its existing populace and garbage disposal is our biggest headache,” adds GMAS’ Saldanha.

The efforts of these protestors seem to have worked, with the state’s Chief Minister buckling to their unceasing protests and even Union Commerce Minister Kamal Nath shying away from imposing SEZs on the state. “We won’t impose SEZs against the wishes of the people of Goa,” Nath told the media last fortnight. Rather than go against growing populist sentiment, Charles Correa, renowned architect and Vice Chairman of the Goa SEZ Task Force, recommends increased investment and upgradation of physical infrastructure, rather than the implementation of unpopular SEZs in Goa. For the companies that have already sunk big money into these projects, that would come as cold comfort.

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