Thursday, July 29, 2010

“First City for SEZ employees/staffers” -not for outside purchasers

“First City for SEZ employees/staffers” 
 MADC’s affidavit before HC confirms that residential project is meant for people working in SEZ and not for outside purchasers

Staff Reporter 

“Out of the area that is being utilised for establishing Special Economic Zone, an area admeasuring 31 acres of land is being developed by M/s Reatox Builder and Developers, under power of attorney executed by the respondent no 1 (MADC) for construction of residential complex to accommodate employees/officers working in Special Economic Zone.” 
This is what the Maharashtra Airport Development Company (MADC) had told Nagpur bench of Bombay High Court on an affidavit, duly sworn by a senior officer of MADC in 2008. This candid statement has once again raised a big question-mark over legality of offer extended to general public to purchase these residential dwellings. 
The affidavit was filed by MADC in response to a petition filed by M/s Suretech Hospital questioning the motive of MADC to acquire its land at Mouza Chinchbhuvan for rehabilitation of project-affected persons of MIHAN. Incidentally, the rehabilitation work over 58 hectare land, too, has been entrusted to M/s Reatox Builders- the firm which is coming up with ‘First City’ project in MIHAN-SEZ area. 
In the instant case, M/s Suretech had claimed that its land was required for constructing a hospital and research centre and that MADC had ample land already acquired and same could be used for rehabilitation of MIHAN PAPs. It was suggested that land allotted to M/s Reatox Builders within MIHAN-SEZ can be utilised to construct houses for villagers displaced by MIHAN-SEZ. 
However, the MADC opposed the prayer stating that “a policy decision has been taken to rehabilitate project affected persons from the area falling in NMC limits in Chinchbhuvan village which is situated within NMC limit. Regarding the project-affected persons falling outside NMC limits, the respondent no 1 (MADC) has decided to resettle them in village Khapri Rly which is situated beyond the NMC limits.” Against this backdrop, the MADC had informed the High Court that land developed by M/s Reatox Builders inside SEZ area (First City Project) is essentially to create residential complex to accommodate employees/officers working in the Special Economic Zone. 
The ‘First City’ project was launched on November 4, 2007 and was expected to be completed within 27 months as per the term of lease. Initially, ‘First City’ was to have 12 building of 18 floors each. However, the Airports Authority of India raised objection to such a height stating that project was situated in funnel area of airport and would pose danger to aircraft’s landing at Nagpur airport. This forced M/s Reatox to lower the height by five floors and redesign the project. 
Apart from objections raised by Airports Authority of India (AAI), the First City Project is also facing another hurdle, since the Board of Approvals (BoA) has directed the MADC which is developer of SEZ and M/s Reatox Builders which has received approval as co-developer to remove condition of sale from its agreement and power of attorney granted by MADC in favour of M/s Reatox Builders. 
Ironically, the BoA stand which is based on provisions of SEZ Act and Rules was also adopted by MADC before the High Court in which it categorically stated that First City Project was meant to house people directly connected with SEZ. The SEZ Act clearly states, “The Developer shall not sell the land in a Special Economic Zone..” and rules also stipulate that residential units should be primarily sold to persons connected with SEZ activities. Therefore, the Board of Approvals (BoA), the apex decision making body for SEZ has consistently maintained that no developer or co-developer can sell the land or residential dwelling to general public and extended this principle to ‘First City’ coming up at multi product MIHAN-SEZ promoted by MADC, during its recent meeting held on July 13. 
The minutes of the meeting clearly mentioned that BoA raised objection over “agreement of MADC with all its co-developers which contained the condition that the flats built by such co-developers would be sold by them to public and MADC has issued Power of Attorney to such co-developers for such sale.” The BoA has directed the MADC remove condition of sale from its agreement with co-developers (in the instant case M/s Reatox Builders).

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