Bhairahawa. The Special Economic Zone Authority (SEZ), which was brought into operation with the objective of increasing the country’s export trade and creating an industrial environment, is now becoming the center of legal complexity more than an opportunity for the industrialists. Although the state has spent billions of rupees for the establishment of industries and export , the established industries have started to leave due to lack of practical and industry-friendly policies.

Serious questions have been raised on the exit policy of Panchakanya SS Export Pvt Ltd, which has invested millions of rupees in Bhairahawa SEZ in recent period.

Panchakanya Group had started the process of operating the factory by renting four plots of Bhairahawa SEZ in July 2075. The industry had constructed a shed, a compound wall, a security guard building, toilet s and a can teen within the SEZ at a cost of around Rs 40 million.

The factory, which started its commercial production in March 2020, has expanded its production capacity to 40 tons daily with a turnover of up to Rs 150 million annually. However, due to the new provisions brought by India on the import of steel products from the international market, especially India, and the strict conditions of SEZ, the industry could not gain the desired momentum. The industry has been in crisis after the SEZ management banned the sale of the industry in the domestic market since 2080 BS for failing to meet the export target. Finally, due to market adversity and legal hurdles, the industry decided to exit SEZ completely in August 2082.

Although the machinery and equipment have been relocated elsewhere, the infrastructure worth four crores built by the industry with its own investment has now become a headache. Investors have to bear a loss of millions of rupees as the existing law of SEZ does not allow the closure of these structures to another industrialist.

According to Devendra of Panchakanya SS Export Pvt. Ltd., there is a possibility of getting at least Rs 30 million if these structures are sold to another industrialist. However, after the SEZ management stopped the sale, the situation has arisen that these structures have to be demolished. It is estimated that the cost of scrap alone will be around Rs 20 lakh due to the demolition of the structure, which will directly cause a loss of Rs 3.8 crore to the industry. “We have not been able to pay heed to the request of the investors who want to buy the structure. The moneylender complained.

Sabhut Dumre, chief of the Special Economic Zone Authority, Bhairahawa, said that although some amendments have been made in the SEZ regulations and working procedures, discussions are still going on regarding the reconstruction of industries and transfer of structures.However, due to the slow process of the government, private sector investment has become like pouring water on sand. Netra Prasad Acharya, president of Siddharthanagar Chamber of Commerce and Industry, called for immediate amendment of such impractical legal provisions.

He said, “It would have been beneficial for both sides if the new ones could use the structures built by the old industrialists, but the state’s policy is causing destruction.”’

Ujjwal Kumar Shrestha, president of the Industry Committee of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), also criticized the tendency of keeping the private sector only as a witness in policy making.He said that the Bhairahawa SEZ has been losing the trust of investors due to the lack of freight rate, mandatory percentage of export and clear exit policy.

Having an environment that cannot last even 5 years after investing 4 crores and not being able to manage one’s wealth when you leave is sure to scare new investors instead of attracting them to SEZs. Therefore, if SEZ is to be truly industry-friendly, the state needs to immediately improve the policy of investment protection and practical outlet.