Mumbai: In a major policy bailout to long-stuck Navi Mumbai Special Economic Zone Pvt. Ltd (NMSEZ), the Maharashtra government on Tuesday allowed the promoters to convert the SEZ into an ‘integrated industrial township’.

Reliance Industries Ltd chairman Mukesh Ambani is one of the promoters of this SEZ, initially proposed to be developed in partnership with the Maharashtra government agency, City and Industrial Development Corporation (CIDCO).

The decision will help the promoters use 15% of the total leased land—1,842 hectares—for residential purposes as part of the Maharashtra government’s integrated industrial township policy introduced in 2013. The remaining 85% project area would have to be used for industrial purposes only, according to a press release issued by the chief minister’s office after the cabinet meeting.

The Navi Mumbai SEZ, proposed to be developed over 2,140 hectares in Dronagiri, Ulwe and Kalamboli nodes in Navi Mumbai on the periphery of Mumbai, has been a non-starter since it was proposed more than 10 years ago. Ambani has invested in this project in his personal capacity. CIDCO and promoters have so far been able to purchase 1,842 hectares which will be leased out now as part of this policy bailout for the industrial township project and 15% of it can be used for residential purposes.

CIDCO managing director Bhushan Gagrani said that the Navi Mumbai SEZ will now be denotified as an SEZ. “The Union government had already started the process to denotify this SEZ but the state’s industry department has been in correspondence with the Centre for the last three months to put this on hold. We told the Centre that this project is under our own consideration. Had it been denotified by the Centre, it would have led to a lot of complicated litigations. Now with this conversion into an industrial township, it stands to get denotified as an SEZ but we are on a firm legal footing," Gagrani said in an interview.

An industry department official, who did not wish to be named, said CIDCO had moved a formal proposal before the government to allow the conversion of the SEZ into an integrated industrial township. “The SEZ has failed to keep the timeline agreed to in the original agreement between the promoters and CIDCO around 10 years back. The promoters themselves wanted a bailout option from CIDCO but it has been legally difficult to do so. But in 2013, the government came up with an integrated industrial township policy that specifically addresses the issue of stuck SEZs. Last year, CIDCO submitted a proposal to the state government to apply this policy to the Navi Mumbai SEZ," said the official.

He said the policy relief would also be available to other SEZs that have proved non-starters.