Date:06/02/2006 URL: http://www.thehindubusinessline.com/2006/02/06/stories/2006020601390300.htm

Back Essar moves for SEZ refinery in Jamnagar — Second application in two weeks

Vinod Mathew

Mumbai , Feb. 5

THE Essar Group has applied for setting up a special economic zone (SEZ) in Jamnagar to cover its expansion plans there.

The group submitted an application to this effect to the Union Commerce Ministry recently. This is the second SEZ being mooted by Essar in Gujarat in a fortnight — the first application also having been moved last month for a SEZ in Hazira.

Clearly, the Essar strategy is to see that all its future ventures in refinery (Jamnagar), steel and power (Hazira) are brought under the SEZ umbrella.

The Essar Group also becomes the second entity to push for a SEZ refinery in Jamnagar in recent times, the first being Reliance Industries. It was only recently that the Gujarat Government granted Reliance an in-principle approval to set up a 30-million-tonnes-a-year SEZ refinery in Jamnagar at an estimated cost of $6 billion.

An Essar Group official confirmed the move to Business Line, "We have submitted an application for setting up an SEZ in Jamnagar. It is too premature to say anything more at this juncture as the SEZ Rules, 2005 are yet to be notified."

While it is understood that Essar, like Reliance, plans to put its refinery expansion plans in Jamnagar under the ambit of SEZ, no details on the size of expansion or the investment mark-up is available. The company officials are unwilling to share its plans for the SEZ as they say the way forward would be shaped by what is spelt out in the SEZ Rules, 2005.

With the prospects for a second SEZ in Jamnagar brightening, the Gujarat Government feels vindicated about its initiative in getting a pre-feasibility report on setting up a petrochemicals SEZ in Jamnagar in 2002. To date, over a dozen SEZ applications from Gujarat are pending with the Centre. Those in the fray include Reliance, Essar, Adani and Zydus Cadila.

"It was the industrial estates set up by the State Government along the 450-km Vapi-Mehasana Highway that took Gujarat to its glory days from the late 1980s up to the mid-90s. Gujarat, having lost out in recent years as the preferred industrial destination to States such as Tamil Nadu and Karnataka in sectors such as automobiles and IT, will be in trouble if it misses the SEZ bus this time," said a senior official of the Gujarat Government. With industry heavyweights such as Reliance and Essar choosing Gujarat for setting up SEZs, given their presence in the State, no such danger seems likely. However, the State is in no mood to take chances as it has decided to set up SEZs in sectors where it has a distinct advantage — petrochemicals, pharmaceuticals, ceramics, diamonds, auto components and garments.