Opportunity For Goa

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Good prospects of attracting new age industries on acquired SEZ land

A NEW opportunity has opened up for Goa to attract cutting-age investments in the state with the start of the process of the auction of the land acquired by the Goa Industrial Development Corporation (GIDC) from the promoters of the SEZ project at the cost of more than Rs 250 crore  more than a year and a half ago. The state needs land with developed infrastructure in order to compete with other states to attract new age industries. The first thing that is necessary for the state government to do is to not allow the GIDC to use the auction of the land merely to reduce their liability that they had in terms of borrowings for the acquisition. The government has to see it as a way to boost healthy industrial growth.

To begin with, the GIDC has done the right thing by not starting the process for auction of the entire 24 lakh sq metre they acquired. They will go for auction of 5 lakh sq metre first.  It is necessary to do it in phases in order to absorb any shocks that might be thrown up in the first phase. Of course, the GIDC needs to reduce its debt burden in order to carry out its own basic responsibilities for development of  infrastructure for industrial development. The auction of 5 lakh sq metre, which comes to about 20 percent of  the total SEZ land acquired, will bring the GIDC money to reduce its debt burden. However, part auction should also enable the state government to plan and approve the type of industries and the big and medium companies already operating in other states that they want to bring to the state.

In a part auction the control will be better. Often the experience of state governments in opening up huge areas of land has been riddled with problems owing to lack of discrimination in choosing the parties. Where there is opportunity to get land, investors of a different kind gather to grab it, vitiating the atmosphere. The land on offer here is not land for speculation. It is for developing land for attracting new age industries. The emphasis in this case should be on providing an ideal infrastructure for new age industries. This emphasis should be there from the very beginning, from the very process of the appointment of a consultant. Because the state government would expect the consultant to do a lot of things in order to make things work according to the standards and in line with their objectives of industrialisation.  The tender floated by the GIDC for appointment of consultants lays down that the consultant will be responsible for ‘economic planning’ and ‘development for commercialisation of land parcels’ earmarked for auctioning. The consultant will have to ‘assess the present land value’ and furnish a ‘cost-benefit analysis’ of the proposed auction after taking into consideration the likely appreciation in the land rate in future. The consultant will also have to ‘identify relevant sectors or companies’ to target as investors for the land.

Although the tender spells out the responsibilities for the consultant, there will be room for assessments, evaluations and interpretations during the process that might seem apparently fair but have a hidden text. One of the most crucial responsibilities assigned to the consulting firm will be to assess the present value of the land and to project future appreciation in the present value of the land. The state government and the GIDC should have a system in place that will collect information on its own on the present and future values of the land in order not to lose out on the earnings from the auction. The second crucial responsibility assigned to the consultant is to ‘identify relevant sectors or companies’ to target as investors for the land. The fundamental perspective on this count has to come from the state government, because much will depend on what kinds of sectors and industries the new lands are going to attract. In short, selecting an experienced and ethically guided consulting firm will only be the first step. Taking it further in accordance with the perspective of attracting new age industries will be the next steps.