Industries Exiting SEZ Must Scrap Structures Instead of Selling Them, Creating Financial Burden

According to reports, Panchakanya SS Export, which exited the Bhairahawa Special Economic Zone (SEZ), has been unable to sell structures worth approximately NPR 40 million. As a result, the company is compelled to dismantle these structures and sell them as scrap metal. The Panchakanya Group has demanded that the government make provisions to allow the sale or transfer of such structures, citing impracticalities within the SEZ Act provisions. SEZ management has stated that the SEZ Executive Committee will decide on the matter, with a resolution expected by mid-September (Bhadra 18).

The land lease provisions within the SEZ framework prohibit industries exiting the SEZ from selling their structures to other SEZ businesses. This has forced companies to demolish valuable constructions that cost millions of rupees and sell them at scrap value. Panchakanya SS Export is facing this issue because it cannot sell its industrial sheds and physical structures. The company had decided to exit the SEZ due to various policy obstacles from the Indian government concerning steel tank exports and because the SEZ Act provisions were unfavorable at that time.

Devendra Sah, General Manager of the Panchakanya Group, described the requirement that industries demolish their own structures and sell them as scrap as unjust. He stated, “The structures we built with millions of rupees could have been used by another industry, but since selling them is prohibited, we are forced to dismantle and sell them for scrap.” Panchakanya has already proposed to SEZ management that these structures be allowed to be sold to other businesses, but no clear decision has yet been made.

The industry representatives warn that if the government does not make a supportive decision by September 18 (Bhadra 18), they will have no choice but to dismantle and sell the NPR 40 million worth of infrastructure as scrap. Panchakanya has called on the government to urgently formulate clear policies for structure management, enable the sale or transfer of sheds and other infrastructure built by industries, and establish legal frameworks that protect their investments.