CAG lens on Infocity-II project

Bhubaneswar: The comptroller and auditor general (CAG) has hauled up the state government for its implementation of the Infocity-II project, a special economic zone (SEZ) near the capital to promote trade and business in information technology (IT) and electronics.
In its report on general and social sector for the year ended March 2018 that was tabled by finance minister Niranjan Pujari in the assembly on Tuesday, the auditor said delay in land acquisition, ineffective master plan and delay in framing an SEZ policy resulted in poor performance of the IT SEZ.
The objective behind establishing the IT SEZ was to attract investment in the sector, to create 28,000 direct and indirect employment opportunities and to achieve export turnover of Rs 6,600 crore by 2019. The state government has invested Rs 150 crore for the development of the IT SEZ.
“As of March 2018, only 50.92 acres of the 262.57 acres of land could be leased out only to one business house – which is 19.39% of the total area. Against the target of registering export figure of Rs 6,600 crore, the same stood at Rs 508.18 crore, which is about 7.70%,” the CAG observed.
It said only 1,520 employment avenues could be created (both direct and indirect) against the aim of 28,000 that is just about 5.43% of the target.
Sources in the state electronics and IT department said Odisha’s total IT export is estimated to be around Rs 4,500 crore in the 2019-20 financial year.
The CAG blamed the Odisha Industrial Infrastructure Development Corporation (Idco) that was responsible for the development of the IT SEZ. Though land measuring 262.57 acres for SEZ was alienated by October 2011, private land measuring 27.282 acres for external road linkage was acquired only by July 2015, it observed. Blaming the Idco for defective master plan, the auditor said in December 2013, Idco had engaged an international company at a cost of Rs 3.24 crore to prepare a master plan by July 2014.
“The firm submitted the master plan in March 2016, with a delay of almost two years. The master plan was not accepted in view of the observation that it was not in sync with the comprehensive development plan of Bhubaneswar city. The state electronics and IT department had also observed that the master plan lacked in e-waste management plan,” the report stated.
The CAG also slammed the Idco for delaying preparation of the SEZ policy outlining the nature and extent of tax exemption and other incentives to be granted by the state government to prospective IT companies.
It said the government had brought out the SEZ policy in June 2015. The inordinate delay in framing the policy was one of the major hindrances in luring investors to the state, the report said, adding nine other states in India had already framed their SEZ policy by 2011.
In its report, the auditor also observed a loss of Rs 2.23 crore due to non-realisation of dues from tenants, who were provided space at the OCAC building. It also noticed undue favour of Rs 2.32 crore to Cybertech Software Multimedia Limited (CSM) towards licence fee, which the CAG observed as ‘irregular’.

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