Tamil Nadu

20 years on, Nanguneri SEZ yet to flourish

When it was opened, politicians hoped for more jobs from the 2,518-acre venture. | Photo Credit: A. SHAIKMOHIDEEN

Over two decades ago, the M. Karunanidhi government laid the foundation for the 2,518-acre Nanguneri Special Economic Zone (SEZ) in Tirunelveli. It was one of the pet projects of the then Union Minister for Industry and Commerce Murasoli Maran. Politicians in the region saw in the venture promises of more business and jobs for the southern districts.

Cut to the present, the SEZ has hardly seen any notable progress and is no where on the industrial map of Tamil Nadu. A change in government soon after the foundation was laid put paid to the plans of development. Though in 2009, M.K. Stalin, as Deputy Chief Minister, spoke of its revival, the project did not get adequate attention during the decade-long AIADMK rule (2011-21).

It is not just politics that derailed the venture. Infrastructure development around the SEZ was inadequate and therefore industries did not see any incentive to operate out of the zone.

Financial closure

Besides, the U.S.-based INFAC Management Corporation, one of the promoters of the venture, could not achieve financial closure. Efforts to bring in Kolkata-based SREI, too, failed.

Eventually, the INFAC jointly promoted the SEZ with the Tamil Nadu Industrial Development Corporation (TIDCO) through a special purpose vehicle — Advanced Technologies Manufacturing and Assembly (ATMAC). Later, AMRL took over the land and it was decided to develop the SEZ with a domestic tariff area and a free-trade and warehousing zone.

Currently, the SEZ houses only 13 operational units that manufacture pumps, utensils and HVAC ducts, among others. Around 300 people per shift are employed and the cumulative exports by the units established on 135 acres are only about ₹750 crore.

“As of now, only 135 acres of land has been leased. This park has a huge potential as it is situated closer to the Thoothukudi port and airport and the Madurai airport is also not far,” an industrialist in the region said, urging the government to take proactive steps to bring in big players. This would ensure the southern districts join the State’s mission to reach a $1-trillion economy.

A source in one of the chambers of commerce, who was associated with the venture years ago, suggested, “The government should enhance international flight connectivity in the region. It should also market this region well. The landscape here has changed over the years; today, this zone has some of the best talent pool, too, which the government should put to good use.”

Irked by the delay in the development of the SEZ, the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) is considering the possibility of taking back 1,000 acres from AMRL Hitech City Limited to convert it into DTZ (Domestic Tariff Zone) and develop it as a joint venture between AMRL and SIPCOT/TIDCO.

“Even though the developer claims companies involved in renewable energy, defence, aerospace, electronics and toy-making are interested in opening their units in the Nanguneri Multiproduct SEZ after relocating them from China, the inexplicable delay in realising the investments is agonising. Hence, we are planning to acquire at least 1,000 acres of the 2,500-odd acres handed over to the developer for creating the SEZ-friendly infrastructure,” said a senior official attached to the Department of Industry.

Three more companies are under construction at the SEZ and once they are operational, another 1,000 people are expected to get jobs here.

“The law clearly says that keeping the vast land assigned for industrial purpose vacant is illegal. This land can be taken back by the government for developing it on its own. Ideally, the 21-year-old Nanguneri SEZ site should have been bustling with industrial activities by this time. It has changed hands among three developers, but nothing has happened in a big way. Hence, the government should take the land back,” said Gunasingh Chelladurai of Bell Group of Companies and president of the Tirunelveli District Chamber of Commerce and Industry.

Before the ongoing Assembly session started, Industries Minister Thangam Thennarasu told The Hindu that one could expect some development in the future. “We are working on a couple of investments to ground them in this park. You will hear some announcements soon. At this moment, we can’t disclose the names and further details,” he said.

Another government official said enquires were coming in for the non-SEZ areas from firms that were into manufacturing medical equipment and solar energy. “Some of them will get materialised in the coming years,” he said.


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Printable version | May 6, 2022 7:43:45 am | https://www.thehindu.com/news/national/tamil-nadu/20-years-on-nanguneri-sez-yet-to-flourish/article65384379.ece