Problem of land acquisition forces Essar to reduce SEZ size

October 13, 2008	(Be the first to rate this story!)  Loading ...
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Facing problems in land acquisition and on some other fronts has forced Essar Oil Ltd, a $50 billion Essar Group company to give up the idea of setting up a multi-product SEZ in Jamnagar. The company has sought Centre’s approval to reduce the size of the SEZ to around 200 hectare (less than one-fifth) from 1,125 hectare. The company also wants to reclassify the proposed project as petrochemical SEZ. According to the official, the company has been

Essar Jamnagar SEZ, being set up by group company Essar SEZ Jamnagar Ltd, was formally approved as a multi-product zone spread over 1,125 hectare. Initially, the Essar Group had decided to set up a 16-20 million tonne greenfield refinery in its proposed SEZ with an investment of around Rs15,000 crore. With reduction in the size of the special zone, the investment in the project will also go down considerably. When contacted, the company officials neither denied nor confirmed the development. The company officials, however, reiterated that the capacity of their exiting 10.5 million tonne per annum (mtpa) refinery in Vadinar, Jamnagar - which is expected to start commercial production this month - will be increased to 34 mtpa. “The proposed investment for refinery expansion is $6 billion,” they said adding, the capacity expansion is scheduled to be completed by December 2010.

A 1,200 mw power plant is also under construction at Vadinar, which will supply power and steam to the expanded refinery. The ’so-far’ multi-product zone is third tax-free region of Essar in Gujarat. The group has proposed two other SEZs in Surat district. The first one Essar Hazira SEZ at Hazira has been already notified. This spread over 267 hectare and is dedicated to engineering sector. Another one - Essar Power SEZ has received in-principal approved by the Centre. This SEZ is located at Suvali and spread over 180 hectares. This is the second multi-product SEZ at Jamnagar after the first one proposed by Reliance Industries Ltd. (RIL). RPL, a subsidiary of RIL, is setting up a refinery and polypropylene plant in the proposed SEZ. The entire cost of this SEZ project is estimated to be around Rs27,000 crore. RIL already operates world’s third largest refinery in Jamnagar, which is located near the new project. Once completed the entire refinery complex including the

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