Serious Lapses CAG flags major violations by MADC in allotment of land in MIHAN-SEZ
| Date :28-Oct-2023 |
Business Reporter
THE Comptroller and Auditor General of India (CAG) auditors in their audit report in 2022 have red-flagged serious violations of the Special Economic Zone (SEZ) rules including allotment of land by Maharashtra Airport Development Company Ltd (MADC), Nagpur without issuing Letter of Approval (LoA) to units in MIHAN-SEZ. It has also pointed out the occupation of land by such units whose LoA had expired or cancelled a long time ago as they did not start operations. Reliable sources told ‘The Hitavada’, “The objections raised by CAG auditors in their report shows that there are serious violations by MADC in the allotment of land in MIHAN-SEZ.” The LoA is the basic requirement for a unit to operate in a SEZ, sources added. Sources said that in such cases the MADC needed to cancel land agreement, forfeit earnest money deposit (EMD) and take possession of land which it failed to do till date. The Development Commissioner of Multi-modal International Hub Airport of Nagpur (MIHAN) Special Economic Zone (SEZ) Dr V Sraman, while talking to ‘The Hitavada’ accepted that such objections were raised by the CAG auditors.
Dr Sraman said that the matter had been taken up on various occasions with the top officials of Maharashtra Airport Development Company Limited (MADC) Nagpur but in vain. Furthermore, the Development Commissioner’s office also issued letters repeatedly on several occasions to MADC office to provide the current status and action taken against the defaulter units for non-compliance of the SEZ rules which have to be furnished to the auditors along with the supporting documents. Till date, MADC has not given reply on this issue. “This is a serious matter as the CAG audit report exposes the negligence on part of the developer of MIHAN-SEZ,” sources felt. Dr V Sraman said, his office is the monitoring authority of MADC and in this capacity has requested the developer of MIHAN-SEZ on the plan of action being initiated against the defaulter units or companies for non-compliance of SEZ rules.
Sources having knowledge of the matter said that CAG audit report mentioned that out of 41 cases scrutinised 25 units were occupying the land in MIHAN-SEZ admeasuring 480.626 acres as they did not obtain the LoA or the LoA expired long back. Furthermore, the auditors also raised objections regarding land admeasuring 327.465 acres being held by 14 units despite expiry of LoA. Sources said that objection regarding 12 units occupying land admeasuring 153.161 acres without issuing LoA were also raised. Accordingly, sources said that objections were raised regarding allotment of land by MADC to units without obtaining LoA like in the case of M/s Vipul Karamchand, a company which is occupying 50 acres of land in SEZ.
At present, the land prices in MIHAN-SEZ are being quoted at approximately Rs 70 lakh per acre. Apart from this, MADC has taken Earnest Money Deposit (EMD) from units in MIHAN-SEZ and is required to forfeit EMD for termination of agreement with unit holders. It is required to forfeit the EMD deposited by 20 entities with cancelled LoA amounting to about Rs 235 crore. Sources had disclosed that the Development Commissioner’s office has directed MADC to submit responses on the above issues raised by the auditors. However, so far no response has been furnished for the same and the said information needs to be forwarded to the CAG Audit Department.
