Nearly ₹ 400 crore investments in eight SEZs in Tamil Nadu are idle as they were implemented without adequate ground work in small towns and cities, according to a report by the Comptroller and Auditor General of India.

According to the CAG report on public sector undertakings for 2012-13 tabled in the Assembly on Tuesday, the SEZs set up by the Electronics Corporation of Tamil Nadu in various locations in the State failed to attract adequate investments with occupancy in these projects ranged from six per cent to 42 per cent.

The CAG has said the issue was deficient planning as these projects were implemented without feasibility studies, proper assessment of market potential or at inappropriate locations.

The SEZ schemes were expected to attract foreign investments and generate jobs. The State Government permitted the Electronics Corporation to set up IT SEZs in Chennai and small towns and cities including Madurai, Tiruchi, Coimbatore, Tirunelveli and Salem. As of March 2013 Elcot spent ₹ 399.27 crore which included ₹ 65.03 crore central assistance under the Assistance to States for Development of Export Infrastructure and Allied Activities scheme.

Feasibility studies had not been conducted for the SEZs in Madurai, Salem and Tirunelveli in South Tamil Nadu. Feasibility study conducted for the project in Tiruchi indicated that the city was not an ideal IT location.

In six of the seven projects the Electronics Corporation issued tender notices between July 2007 and August 2009 and awarded contracts for common infrastructure and buildings without a Detailed Project Report. It issued work orders later for the DPR between April and October 2009. As of December 2013 government clearance for project investments had also not been obtained for seven projects involving investments of ₹ 390 crore, the report said.

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