Vizag SEZ is making slow progress

Visakhapatnam: The Visakhapatnam Special Economic Zone (VSEZ), under the Union Ministry of Commerce, has been making slow progress in the past two years.

The zone was able to record Rs 746.77-crore export turnover during 2007-08 and during the year before the turnover was Rs 714 crore.

During the current financial year, the VSEZ may in all probability touch, or cross, the Rs 800-crore mark and the target of Rs 1,000 crore seems a long way ahead.

The VSEZ relies mainly on diamond and jewellery units, which account for the bulk of the export turnover, and two major units Worldwide Diamonds and LID are located in the zone. Besides, there are a few small software units, the R&D unit of Dr Reddy’s Labs, bio-diesel units under construction and a few more units.

Synergies Castings, formerly Synergies-Dooray, was a major unit which initially started operations in the VSEZ and later moved out, making a dent in the turnover.

Though software exports from Vizag started on a modest scale from the VSEZ in 1999 (from a level of Rs 5 crore a year), as infrastructural facilities were first created in the zone, only a few small software units are left in the zone now.

The State Government allocated land for the major IT companies Satyam, the HSBC, and Wipro in the city itself. The first two have started operations and the third is in the construction stage.

For the other IT companies, work is in progress on two hillocks near Rushikonda, declared as special economic zones. Consequently, the VSEZ’s importance has eroded.

The VSEZ also faces the problem of paucity of land, sources say, and the State Government, which is allocating land liberally for private special economic zones, does not seem to be inclined to allocate any more land to VSEZ.

These constraints are hampering the growth of VSEZ and the going seems to be tough in the days to come.