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SEZs
Poised To Boost
Maharashtra Industrial
Growth
In a major path-breaking
initiative, the
Maharashtra Industrial
Development Corporation
(MIDC), along with
Infrastructure Leasing
& Financial
Services Limited
(IL&FS), has
forged partnerships
with four large
private parties
for the development
of four Special
Economic Zones (SEZs)
across the State.
MIDC and IL&FC
have jointly signed
a Memorandum of
Understanding (MoU)
with Eldeco Infrastructure
& Properties,
Parsvnath SEZ, Ramky
Infrastructure,
Soma Enterprises
and Ajanta Projects,
on 6th August 2008
to develop the four
SEZs to build infrastructure
at an estimated
total cost of Rs.863
crore to attract
export-oriented
industries from
across the country
to set up units
in Maharashtra.
Of these four SEZs,
a Pharmaceutical
SEZ is to be developed
by Parsvnath SEZ
Pvt Ltd at Nanded
in Marathwada region.
The development
cost for this SEZ
will be around Rs
47 crore, and it
will come up on
150 hectares. The
investment expected
to be attracted
by the project is
Rs 5,000 crore.
It will provide
job opportunities
to about 8,000 people.
The second, a Textile
SEZ, will be developed
by Ajanta Projects
India Ltd at Butibori
in Nagpur. The development
cost is around Rs
73 crore. This SEZ
project will attract
an investment of
Rs 5,000 crore,
and will create
employment for 8,000
to 10,000 people.
The third SEZ -
an Integrated Textile
SEZ will be set
up at Kagal in Kolhapur
over 104 hactares
at a cost of Rs.143
crore. The project
will be executed
by Soma Enterprises.
This project is
expected to bring
in an investment
of Rs 5,000 crore
and provide employment
for 10,000 people.
The fourth, a multi-product
SEZ, will be set
up at Nandgaonpeth
in Amravati over
1,010 hactares at
a cost of Rs.600
crore. Eldeco Infrastructure
and Properties will
be executing the
project. The project
is expected to attract
investment of Rs
2,000 crore and
Rs 45,000 crores
in the short and
long-run respectively.
In addition it is
also expected to
provide employment
both direct and
indirect of 25,000
and 50,000 in the
short and long-run
respectively.
The Ministry of
Commerce and Industry
in the Government
of India, in a policy
initiative to boost
exports has been
encouraging the
setting up of Special
Economic Zones across
the country.
In order to enhance
foreign investment
and promote exports
from the country
and to provide a
level playing field
to the domestic
enterprises and
manufacturers to
be competitive globally,
the Government of
India announced
the introduction
of the SEZ policy
in April 2000. A
Special Economic
Zone (SEZ) is a
geographical region
that has economic
laws that are more
liberal than a country's
typical economic
laws. The category
'SEZ' covers a broad
range of more specific
zone types, including
Export Processing
Zones, Free Trade
Zones, Industrial
Estates, Free Zones
and Free Ports.
As of 2007, more
than 500 SEZs have
been proposed, 220
of which have been
created, in spite
of concerns over
the sustainability
of such a large
number of SEZs.
The SEZs in India
closely follow the
China model. India
passed the Special
Economic Zone Act
in 2005.
Under this initiative,
industrial units
coming up in these
SEZs have been given
incentives such
as income tax exemption
from the start-up
date. The incentive
includes 100 per
cent tax exemption
for the first five
years, 50 percent
exemption for the
next five years
and 50 percent exemption
on reinvestment
profits during the
next five years.
Currently, India
has 1,022 units
in operation in
nine functional
SEZs, each with
an average size
of 200 acres. Eight
Export Processing
Zones have been
converted into SEZs.
The states in which
the SEZs have been
approved are being
faced with intense
protests, from the
farming community.
The protesters have
accused the government
of forcibly snatching
fertile land, at
heavily discounted
prices as against
the prevailing prices
in the commercial
real estate industry.
In order to minimise
such protests, which
have taken violent
turns in some places,
the government imposed
a ceiling of 5000
hectares on the
size of SEZs. Although
there has been some
speculation recently
that this ceiling
will be relaxed,
the empowered group
of ministers (eGoM)
on SEZs on 8 August
has decided to continue
with the 5,000-hectares
land ceiling on
the zones.
MIDC, which has
been spearheading
industrial development
across Maharashtra
by providing the
much-needed infrastructure,
comprising land,
water supply, roads,
etc., has roped
in IL & FS as
partner to expedite
the setting up of
SEZs.
Studies and surveys
conducted by IL
& FS have shown
that the four SEZs
together are expected
to attract a whopping
total investment
of around Rs 17,000
crore, creating
more than 50,000
jobs. The private
partners who have
been selected through
a transparent bidding
process will implement
the four projects
along with MIDC.
On its part, IL&FS
prepared the detailed
project report for
each SEZ, and also
helped MIDC in the
bidding process
to select the developer
with the right credentials
for each SEZ.
MIDC was formed
on 1 August 1962,
with the objective
of spreading industrial
culture and help
create employment
at various places
across Maharashtra.
In the very first
year of its establishment,
MIDC came up with
plans to develop
14 industrial areas
to help entrepreneurs
set up their units
in those areas.
The faster growth
of the Kalyan and
Pimpri-Chinchwad
industrial complexes
is the results of
MIDC's vision and
the ability to implement
both the projects
on time. MIDC's
main activities
include acquisition
and disposal of
land. Provision
and maintenance
of infrastructure
facilities, especially
an assured supply
of pure water to
the industrial units
and the surrounding
areas. In fact,
one of the most
important objectives
of the MIDC has
been to set up independent
filtered/potable
water supply systems
of adequate capacity.
It has helped stabilize
the population bases
near the industrial
areas.
Now, MIDC's association
with IL & FS
is expected to give
a fillip to industrial
development and
growth in Maharashtra.
IL&FS is one
of India's leading
infrastructure development
and finance companies.
IL&FS is promoted
by the Housing Development
Finance Corporation
Limited (HDFC),
Central Bank of
India (CBI) and
Unit Trust of India
(UTI). The organization
has focused on the
development and
commercialization
of infrastructure
projects. The company
provides various
types of services
necessary for successful
project completion.
These include visioning,
documentation, development,
finance, management,
technology and execution.
Some of the projects
covered by IL&FS
in Maharashtra are
Maharashtra State
Electricity Board,
Rehabilitation &
Resettlement Programme
for Mumbai Urban
Transport Project,
Integrated Urban
Infrastructure Development
in Nanded, and Maha
Mumbai Integrated
SEZ Project.
The association
of IL&FS with
MIDC dates back
to 22 June 2006,
when it signed a
Project Development
and Promotion Partnership
agreement with the
latter for development
of the proposed
four SEZs in Maharashtra
through the unique
Public-Private Partnership
model. IL&FS
is fully involved
in the project starting
from concept to
completion of the
SEZ, including selection
of private partners
for the implementation
of the SEZs. Some
of these roles include
site visits and
site analysis, industry
analysis, infrastructure
analysis, demand
assessment, master
planning, marketing
strategy and plan,
business plan financial
modelling, feasibility
report, bid process
management, selection
of developer and
execution of various
agreements.
The future of some
blue-chip SEZ projects,
including the Maha
Mumbai project of
Reliance Industries
and that of DLF
in Haryana, besides
others, is at stake
because of the continuation
of the ceiling.
The delay in raising
the ceiling means
these promoters
will have to wait
for a while longer
before taking a
final call on their
projects.
Meanwhile, a decision
to introduce a minimum
alternate tax (MAT)
on units in SEZs,
as proposed by the
finance ministry
has been postponed.
The Commerce Ministry
is strongly opposed
to the move as it
feels the tax would
dilute the comparative
advantage of the
SEZs. The Finance
Ministry, on the
other hand, has
claimed that the
Minimum Alternate
Tax was essential
in the new fiscal
regime that shuns
blanket exemptions
for any sector.
The postponement
of the decision
on MAT is expectedly
a major relief for
developers, as SEZs
are perceived as
tax-free zones.
Even as new SEZs
are being announced,
such as the four
projects by the
MIDC, it is clear
that the government
has to bring about
clarity in the various
issues haunting
the SEZ policy.
These developers
of the four SEZs
in the state are
set to play the
same role as municipal
corporations in
planning their areas.
The state government
has decided to appoint
developers as the
Special Planning
Authority in SEZs
in Maharashtra.
In a government
resolution that
was sent to all
municipal corporations
and councils in
the State recently,
the State Urban
Development Department
has stated: "For
planned and orderly
development of the
entire area falling
within the jurisdiction
of a notified SEZ
area, it appears
necessary to appoint
SEZ company as the
Special Planning
Authority.”
"The developer
of the SEZ would
be like the MIDC,
which is the planning
authority for industrial
areas. As in the
case of all planning
authorities, here
too, the Urban Development
department will
be in charge of
supervision and
sanctioning of the
master plan,"
said Principal Secretary
(Industries) A M
Khan.
This would in effect
mean that developers
can sanction building
and other construction
plans instead of
getting it approved
by the municipal
corporation. They
would have the same
powers in planning
as Mumbai Metropolitan
and Regional Development
Authority (MMRDA)
in its areas or
City and Industrial
Development Corporation
(CIDCO) in Navi
Mumbai, the only
difference being
that the planning
authority here is
a private body.
A representative
of the municipal
commissioner will
be a member of the
Special Planning
Authority. "The
BMC will not get
to scrutinise the
plans of SEZs coming
up in Mumbai before
the construction
starts. All such
sanctioning powers
that are currently
vested with the
BMC will now rest
with the developer
himself," said
a civic official
from the BMC's Development
Plan department.
There are in all
27 notified SEZs
in Maharashtra.
Of these, three
SEZs are to be set
up in Mumbai and
are meant for IT-ITES.
These include a
12.58-hectare SEZ
by Hiranandani Builders
in Powai, a 218-hectare
SEZ by Royal Palms
Private Limited
at Aarey Colony
in Goregaon East
and a 57-hectare
SEZ by Zeus Infrastructure
Private Limited
in Mulund and Thane.
Others waiting to
be notified include
Ferrani Hotels Private
Limited/ Ozone Developers
at Malad East, Bombay
Industrial Corporation
at Mahul in Chembur,
a 10-hectare gem
and jewellery SEZ
by Royal Palms and
the 1,000-hectare
entertainment and
tourism SEZ in the
Gorai-Uttan belt
by Essel Group Company's
Pan India Paryatan
Limited.
The developer has
to only submit his
sanctioned plans
to the BMC or the
municipal corporation/
council concerned
within three months
of starting the
work, failing which
the civic body can
stop the development.
The BMC's role also
includes shifting
reservations like
gardens or schools
to suitable places
on the periphery
of the SEZ areas.
The role and powers
of the Special Planning
Authority is detailed
in Section 40 of
the Maharashtra
Region and Town
Planning (MRTP)
Act.
Developers of Special
Economic Zones (SEZs)
are set to play
the same role as
municipal corporations
in planning their
areas. The state
government has decided
to appoint developers
as the Special Planning
Authority in SEZs
in Maharashtra.
In a government
resolution that
was sent to all
municipal corporations
and councils in
the state last month,
the state urban
development department
has stated: "For
planned and orderly
development of the
entire area falling
within the jurisdiction
of a notified SEZ
area, it appears
necessary to appoint
SEZ company as the
Special Planning
Authority.”
"The developer
of the SEZ would
be like the MIDC,
which is the planning
authority for industrial
areas. As in the
case of all planning
authorities, here
too, the Urban Development
department will
be in charge of
supervision and
sanctioning of the
master plan,"
said Principal Secretary
(Industries) A M
Khan.
This would in effect
mean that developers
can sanction building
and other construction
plans instead of
getting it approved
by the municipal
corporation. They
would have the same
powers in planning
as Mumbai Metropolitan
and Regional Development
Authority (MMRDA)
in its areas or
City and Industrial
Development Corporation
(CIDCO) in Navi
Mumbai, the only
difference being
that the planning
authority here is
a private body.
A representative
of the municipal
commissioner will
be a member of the
Special Planning
Authority. "The
BMC will not get
to scrutinise the
plans of SEZs coming
up in Mumbai before
the construction
starts. All such
sanctioning powers
that are currently
vested with the
BMC will now rest
with the developer
himself," said
a civic official
from the BMC's Development
Plan department.
There are in all
27 notified SEZs
in Maharashtra.
All three SEZs in
Mumbai are meant
for IT-ITES. These
include a 12.58-hectare
SEZ by Hiranandani
Builders in Powai,
a 218-hectare SEZ
by Royal Palms Private
Limited at Aarey
Colony in Goregaon
East and a 57-hectare
SEZ by Zeus Infrastructure
Private Limited
in Mulund and Thane.
Others waiting to
be notified include
Ferrani Hotels Private
Limited/ Ozone Developers
at Malad East, Bombay
Industrial Corporation
at Mahul in Chembur,
a 10-hectare gem
and jewellery SEZ
by Royal Palms and
the 1,000-hectare
entertainment and
tourism SEZ in the
Gorai-Uttan belt
by Essel Group Company's
Pan India Paryatan
Limited.
The developer has
to only submit his
sanctioned plans
to the BMC or the
municipal corporation/
council concerned
within three months
of starting the
work, failing which
the civic body can
stop the development.
The BMC's role also
includes shifting
reservations like
gardens or schools
to suitable places
on the periphery
of the SEZ areas.
The role and powers
of the Special Planning
Authority is detailed
in Section 40 of
the Maharashtra
Region and Town
Planning (MRTP)
Act.
Following are the
details of the four
SEZs.
• Butibori
Textile SEZ
• Pharmaceutical
SEZ at Krushnoor
in Nanded
• Multi-product
SEZ at Nandgaonpeth
in Amravati
• Agro-Processing
SEZ at Additional
Latur Industrial
Estate in Latur
District
All the four SEZs
have received a
formal approval
from the Ministry
of Commerce and
Industries.
Butibori Textile
SEZ
The following objectives
have been considered
for development
of Butibori Textile
SEZ:
• Creation
of world-class infrastructure
for Textile related
industry at an affordable
cost
• Provide
a package of incentives
to attract foreign
and domestic investments
for promoting export
led growth
• Creation
of new entrepreneurs
and employment opportunities
• Boost Textile-based
exports
Project
Features
• SEZ at Butibori
Industrial is spread
over an area of
147 Ha.
• The SEZ
is situated at National
Highway No. 7
• The SEZ
is just 28 kms from
Nagpur city
• Nearly 1500
hectares of land
in the Butibori
Industrial area
is developed and
brought under infrastructure
• Core infrastructure
including power
and water supply
has been provided
by MIDC.
• The cost
of the project has
been estimated at
around Rs. 73 crores.
Project
Milestones
From the signing
of the PDPP between
MIDC and IL&FS,
the Butibori SEZ
project has reached
a very advanced
stage. IL&FS
IDC is the project
development advisor
for the project
and the following
project development
activities has been
completed:
Following Project
Development Activities
completed:
• Sector Identification
and Demand Assessment
• Concept
Master planning
• Techno-
Economic Feasibility
Study
Bid Process
Management
Project structured
on a PPP format
wherein MIDC invited
bids from 23 prospective
developer/ consortium
with the issue of
the Expression of
Interest (EOI),
post financial screening
to carry out the
following scope
of work for Butibori
Textile SEZ:
• Procurement
of Land
• Plan, design,
construction / development
of SEZ as per the
guidelines stipulated
by Department of
Commerce, Ministry
of commerce &
Industries, Govt.
of India/ Govt.
of Maharashtra,
from
time to time.
• Market the
developed area/
spaces
• Operate
and maintain the
common facilities
and infrastructure
within the said
SEZ
• Other activities
related to the development,
operation and maintenance
of the said SEZ.
Based on initial
analysis the 23
bidders were short
listed for Butibori
Textile SEZ. After
subsequent evaluation
of both technical
and price bids,
Ajanta Projects
(I) Limited was
issued a letter
of Intent to develop
the Butibori Textile
SEZ in January 2008.
Amravati
Multi-product SEZ
The following objectives
have been considered
for development
of Multi-product
SEZ:
• Creation
of world-class infrastructure
at an affordable
cost
• Provide
a package of incentives
to attract foreign
and domestic investments
for promoting export
led growth
• Creation
of new entrepreneurs
and employment opportunities
• Boost exports
Project
Features
• SEZ at Nandgaonpeth
Industrial Estate
is spread over an
area of 1010 Ha.
• The SEZ
is just 15 kms away
from Amravati City
• The nearest
airport at Nagpur,
which is about 140
km from the site.
Nagpur Airport is
being upgraded into
an international
multi modal passenger
and cargo hub airport.
Belora, another
airstrip, lies just
20 km south of the
site and is in possession
of MIDC.
• Excellent
availability of
Cotton, Horticulture/Agro
based raw materials,
Live stock and forestry
products
• Strong educational
base due to presence
of engineering colleges,
medical college,
agricultural universities.
Availability of
skilled resources.
• Core infrastructure
including power
and water supply
has been provided
by MIDC.
• The cost
of the project has
been estimated at
around Rs. 600 crores.
Project
Milestones
From the signing
of the PDPP between
MIDC and IL&FS,
the Amravati SEZ
project has reached
a very advanced
stage. IL&FS
IDC is the project
development advisor
for the project
and the following
project development
activities has been
completed:
Bid Process Management
After an along process
of calling for bids
and their technical
and price evaluation,
Eldeco Infrastructure
& Properties
Ltd was selected
for development
of Amravati Multi-product
SEZ.
Nanded
Pharmaceutical SEZ
Objectives
The following objectives
have been considered
for development
of Nanded Pharmaceutical
SEZ:
• Creation
of world-class infrastructure
for Pharmaceutical
Industry at an affordable
cost
• Provide
a package of incentives
to attract foreign
and domestic investments
for promoting export
led growth
• Creation
of new entrepreneurs
and employment opportunities
• Boost Pharma-based
exports
Project Features
• Krushnoor
Industrial Estate
spread over 150
Ha
• 28 kms from
Nanded city and
35 kms from Nanded
Airport
• 225 kms
from Aurangabad
and 585 kms from
Mumbai
• Excellent
Road and Rail connectivity
• Core infrastructure
including power
and water supply
has been provided
by MIDC.
• The cost
of the project has
been estimated at
around Rs. 47 crores.
Project Milestones
MIDC invited bids
from 19 prospective
developer/ consortium
and based on the
evaluation Parsvnath
SEZ Limited was
selected for development
of Nanded Pharmaceutical
SEZ in January 2008..
Latur
Agro-processing
SEZ
The following objectives
have been considered
for development
of Latur Agro-processing
SEZ:
• Creation
of world-class infrastructure
for Agro-Processing
Industry at an affordable
cost
• Provide
a package of incentives
to attract foreign
and domestic investments
for promoting export
led growth
• Creation
of new entrepreneurs
and employment opportunities
• Boost agro-based
exports
Project
Features
• SEZ at Additional
Latur Industrial
Estate is spread
over an area of
139 Ha.
• The SEZ
is just 9 kms away
from Latur city
and 3 kms away from
Latur Airstrip.
• 167 kms
from Nanded and
550 kms from Mumbai.
• Excellent
Road and Rail connectivity
to the project site.
• Presently
gauge conversion
work for linking
Latur Station, 4
Km from the SEZ
site is underway.
• Core infrastructure
including power
and water supply
has been provided
by MIDC.
• The cost
of the project has
been estimated at
around Rs. 60 crores.
Project
Milestones
From the signing
of the PDPP between
MIDC and IL&FS,
the Latur SEZ project
has reached a very
advanced stage.
MIDC invited bids
from 22 prospective
developer/ consortium
and based on the
evaluation Ramky
Infrastructure Limited
was selected as
preferred bidder
for development
of Latur Agro-processing
SEZ in December
2007. |
