Gujarat loses projects worth Rs 20,000 cr

Joydeep Ray in Ahmedabad | June 16, 2004 09:18 IST

India Inc and state enterprises have abandoned 17 proposed projects worth Rs 20,000 crore (Rs 200 billion) in the state between April 2003 and 2004, according to a report by the Centre for Monitoring Indian Economy.

Even foreign direct investment in the state has been witnessing a steady fall after the devastating earthquake in 2000 and post-Godhra riots in 2002, contrary to the claims made by the state government.

The CMIE report said, "During April 2003-2004, around 212 new projects with a total investment of Rs 21,848 crore (Rs 218.48 billion) were announced.

Of these, 45 projects with a total investment of Rs 6,609 crore (Rs 66.09 billion) were completed and around 14 projects entailing an investment of Rs 19,923 crore (Rs 199.23 billion) were abandoned."

The cost of the completed projects is calculated taking the cost escalation also into consideration.

The total worth of projects abandoned is 300 per cent higher than that of the projects completed during the period.

The CMIE report said among the major industrial projects abandoned during the last one year, the biggest one was the special economic zone project at Poshitra in Jamnagar district. This project of Poshitra SEZ Estates had envisaged an investment of Rs 5,700 crore (Rs 57 billion).

The project was moved to neighbouring Maharashtra by its promoter, Nikhil Gandhi, a few months back. However, this project in Maharashtra is yet to be completed.

"The other important projects that were abandoned include the port-based SEZ project by Gujarat Poshitra Port Infrastructure which was worth Rs 5,652 crore (Rs 56.5 billion).

Another project by the Gujarat Maritime Board, a state government enterprise, to develop a port at Simar with an investment of Rs 2,785 crore (Rs 27.85 billion) was also abandoned," said a state government official.

Gujarat also lost the proposed power project at Moti Khavdi in Jamnagar district. The project was to be taken up by Reliance Jamnagar Power with an investment of Rs 2,550 crore (Rs 25.5 billion).

During the quarter started April 2003, three projects totally were shelved.

In the September quarter, three other projects totally worth Rs 13,152 crore (Rs 131.5 billion) were abandoned.

In the December quarter, seven projects together worth Rs 6,621 crore (Rs 66.21 billion) were dumped and in the quarter starting January, 2004, three projects worth Rs 150 crore (Rs 1.5 billion) were shelved. The next quarter saw one more project vanishing.

The report said, "At the end of the April 2003 quarter, 300 projects worth Rs 36,916 crore (Rs 369.16 billion) were announced. A total of 166 projects worth Rs 67,522 crore (Rs 675.22 billion) were under implementation then. At the end of the quarter April, 2004, 329 projects worth Rs 44,038 crore (Rs 440.38 billion) were announced and 203 projects at a total cost of Rs 66,091 crore (Rs 660.91 billion) were under implementation in the quarter," the report said.

The state government had claimed that projects worth Rs 66,000 crore (Rs 660 billion) have been promised by various industry houses including Reliance Industries Ltd and Essar Group.

However, facts and figures do not bare out the state's claims.

The government is faring equally bad on the foreign direct investment front.

During April 2002-February 2003, the state received FDI approvals for projects worth Rs 411.42 crore (Rs 4.11 billion). But during April 2003-February 2004. the figure declined sharply to Rs 155.32 crore (Rs 1.55 billion).

Officials of the state industry department were not available for comments.