Nagpur: In a startling revelation, the Comptroller and Auditor General of India (CAG) has issued a damning audit report, exposing significant breaches of Special Economic Zone (SEZ) regulations. The report, which pertains to the year 2022, has highlighted multiple irregularities concerning land allotments by the Maharashtra Airport Development Company Ltd (MADC) in Nagpur, particularly in the Multi-modal International Hub Airport of Nagpur (MIHAN) SEZ, a report in a local English daily said.
The CAG audit report indicates that MADC had allocated land within MIHAN-SEZ without issuing the necessary Letter of Approval (LoA) to the respective units. The LoA is an essential prerequisite for any unit to operate within a SEZ. This oversight points to a fundamental violation of SEZ rules and regulations. Furthermore, the report identifies instances where land within MIHAN-SEZ has been occupied by units despite their LoAs having either expired or been canceled long ago due to their failure to commence operations. Such occurrences represent a clear disregard for SEZ guidelines.
The objections raised by the CAG auditors underscore the gravity of the situation, shedding light on the extent of non-compliance by MADC in the process of land allocation within MIHAN-SEZ. These findings have raised serious concerns about the management and oversight of SEZ operations in Nagpur.
One critical aspect highlighted in the report is the failure of MADC to take appropriate action in cases where the LoAs had expired or been cancelled. According to SEZ regulations, in such scenarios, it is imperative for MADC to nullify the land agreements, forfeit earnest money deposits (EMD), and repossess the land. However, this corrective action has not been implemented as of the present date.
According to Dr Sraman, 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 a reply on this issue.
The report further said that this is a serious matter as the CAG audit report exposes the negligence on part of the developer of MIHAN-SEZ. The 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.
According to the report, objections regarding 12 units occupying land measuring 153.161 acres without issuing LoA were also raised. Accordingly, the 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, the report stated.
