The implications are obvious against the background of DLF Ltd, India’s largest real estate developer, successfully getting its IT SEZ in Delhi de-notified by the government even after its in-principle approval as an IT SEZ project. This would now enable the company to use 25 acres of land that the government provided for the IT SEZ, for real estate development.

With 16 already approved, IT SEZs will corner the largest chunk of the total 60 to come up in Gujarat.

Some instances: One of the IT SEZs is to be set up by the Raheja Group on an area of 27.85 hectares at Koba, Gandhinagar through its developer company Aqualine Properties Pvt Ltd. This is how the group describes itself on its website: “K Raheja Corp is a success story spanned across decades and continues to achieve higher targets relentlessly for quality performance and service in diverse fields of real realty business, hospitality sector and retailing outfits…”’

The group's vice president A D Prabhu declined to comment on the issue when contacted and suggested talking to its marketing director, who remained unavailable.

Bhavin Mehta, Head (Business Department) of Ganesh Infrastructure Pvt. Ltd., which is the developer company for a 54-hectare IT/ITES SEZ at Dascroi, Ahmedabad also declined to comment on the issue.

Three IT/ITES SEZ developer companies — City Gold Realties Pvt ltd, Calica Construction and Impex Pvt. Ltd., and Gaurinandan Property Holders Pvt. Ltd — with notified area of 10.72 Ha, 52.60 Ha and 16.11 Ha respectively, are subsidiaries of one parent company — City Gold Group. The group's representative, Sanjay Agarwal, said of the three, City Gold Realties have tied up with a Pune-based IT company, Vascon Engineering Ltd, for accessing the needed IT expertise.

But Vascon Engineering Ltd itself makes no claim about having anything to do with IT. On the other hand, its Website says it is among the top 14 builders in India “Vascon Engineering Ltd. is a construction company guided by Mother nature and makes optimum use of the basic elements of Nature…”, the website maintained.

This is though the prospects of SEZ approvals being utilised for real estate using loopholes in the regulations was one of the major concerns aired even at the 'India SEZ Summit 2006' organized by the Confederation of Indian Industry (CII), soon after the enactment of the SEZ Act 2005.

The benefits from getting a SEZ proposal approved begins with the developer enjoying hefty tax and custom duty once the government issues the ‘notification’ of the SEZ. The condition is that a specified portion of the SEZ territory will only house export-oriented units.

But once the whole SEZ or a portion of it is ‘de-notified’ by the government, the developer can turn that holdings into real estate projects. This is possible even though the SEZ Act 2005 has no exit clause, obviously not foreseeing such an eventuality.

Gujarat's secretary for Science and Technology, Raj Kumar, admitted to this newspaper that ``some parties might have some malicious intentions while proposing an IT/ITES SEZ.” He, however, maintained that what happened in Delhi will not be allowed to happen in Gujarat.