IT SEZ Updates : 11/8/09

CENTRE TO CONSIDER 5 FRESH SEZ PROPOSALS
New Delhi
Deccan Herald

The government will consider five proposals for setting up special economic zones, on Tuesday —– including those of Brooke Bond Real Estates and Deccan Infrastructure.

The 19-member inter-ministerial Board of Approval (BoA), headed by Commerce Secretary Rahul Khullar, may also give formal approval to 25 developers for execution of their projects within an extended time frame.

The Board would also take a decision on requests of Lanco Solar and Cochin Airport International to set up special economic zones (SEZs).

Brooke Bond Real Estates plans to set up an IT/ITeS SEZ over 11 hectares in Karnataka, while Deccan Infrastructure has moved the BoA for permission to develop two tax-free zones in Andhra Pradesh, said the agenda document of the Board.

Of the 25 developers, including Ansal SEZ in Gurgaon (Haryana), Ranbaxy Laboratories in Mohali (Punjab) and Maytas Enterprises in Ranga Reddy (Andhra Pradesh), which have been given one-year additional time for their projects, may get formal approval for the extension, sources said.

Maytas Ventures SEZ Pvt Ltd has approached the BoA to surrender its 14.15-hectare sector-specific SEZ in Andhra Pradesh. The issue is also on the agenda of the BoA. Sanvo Resorts has also requested to de-notify its projects.

 

SMART INITIATIVES BOOST SEZ PROSPECTS
Vikram Bapat
The Financial Express

The ghost of Nandigram has not been exorcised. The steps taken by the government in the aftermath of the Nandigram debacle got back the feel good factor into the future of SEZ policy and its sustenance as a long-term growth engine. The action by the Supreme Court of quashing the plea put forward by Reliance for its Mumbai SEZ (MSEZ) evoked strong reactions and has created a false sense of uncertainty once again around the feasibility of large-scale multi-product SEZs around the country.

However, over the last two months, policymakers at the ministry of commerce have been active in issuing clarifications that have far-reaching positive consequences. Several open issues have been addressed through amendments and instructions. The pace, at which these decisions were taken and indeed auctioned, is a positive sign and the policymakers deserve a pat on the back for rising to the occasion. Some of the major initiatives are discussed here.

The first among them is that of vacant land. The connotation of ‘vacant land’ has always been a bone of contention. Though in a plain vanilla sense, vacant land has a straightforward meaning; potential investors saw this as a missed opportunity since availability of large tracts of vacant land is difficult.

A definition of ‘vacant land’ has since been inserted in the SEZ rules that defines it as the land where “there are no functional ports, manufacturing units, industrial activities or structures in which any commercial or economic activity is in progress.” To put it concisely, vacant land has an extended connotation to include land that has complete structures or non-functional ports. As long as such premise does not have any commercial or economic activity in progress, these areas are eligible to be potential SEZs. Ruins can be converted to riches.

The next issue is that of service tax exemption for services consumed wholly within the SEZ. On March 3, 2009, the ministry of finance issued notification 9/2009-Service Tax providing that all units and developers will now be eligible to claim refund of input taxes suffered. This was not well received by businesses, primarily for two reasons. One, SEZs were supposed to be tax-free zones, so why there should be a levy at all. Second, the process of getting refund is unfriendly, time consuming and mired in red tape. However, notification 15/2009-Service Tax dated May 20, 2009 was issued to provide unconditional exemption to services consumed within the SEZ without following the refund route. Thus, the requirement of first paying the tax and then claiming refunds is dispensed with.

Then there is the issue of leasing on a shift-to-shift basis and disaster management/recovery centres. IT/ITeS SEZ developers had sought clarification whether a developer can lease space in the IT/ITeS SEZ on a shift-to-shift basis. In response to this, an instruction was issued internally to the development commissioners by the ministry of commerce. This, perhaps, is the first step to address the concerns on SMEs who have always been complaining that the SEZ scheme never benefitted them. The instruction now lays down that SEZ developers can lease out space in IT/ITeS SEZ on a shift-to-shift basis subject to certain conditions. Clarifications are also to be issued to tweak procedure and the SEZ rules to enable implementation of this process.

The ministry has also recognised the reality that ITeS businesses, in particular, require a full time disaster management and business continuity mechanism. The instruction recognises this business reality and stipulates that disaster management/recovery centre of foreign companies can be set up in the IT/ITeS SEZs whether manned or not. Though there are practical issues involved here, the fact that the need is addressed is a step in the right direction.

Yet another issue is that of the movement of used/second hand assets. Perhaps the most controversial issue since the initiation of the SEZ regime is the question of whether used assets can be moved by a new unit into an SEZ or not. Instruction no 11 issued on May 27, 2009 has sought to address this question in detail.

So far the SEZ regulations have flip-flopped on the issue. The SEZ rules were amended in August 2006 to stipulate that no previously used machinery or plant could be considered for a new SEZ unit. This was coupled with a retrospective inclusion in section 10AA of the Income Tax Act of a sub-section that restricted movement of previously used machinery or plant subject to a maximum of 20% in value terms. Subsequently, the SEZ rules were again amended to remove the above stipulation on the ground that the income tax regulations had addressed this issue.

The writer is executive director, PricewaterhouseCoopers

IT SEZ News: 30/7/09

INFOSYS HYD SEZ TO BE OPERATIONAL IN 12 MONTHS
Chennai/Hyderabad
Business Standard  DNA  

Infosys Technologies, the second largest software services exporter, has said one of its two special economic zones (SEZs) in Hyderabad would become operational within 12 months. The SEZs span across 440 acre and work on both of them has already begun.

In all, the company would invest about Rs 600 crore to set up new facilities at Mangalore, Pune, Thiruvananthapuram, Chandigarh and Bhubaneswar during the current financial year, according to chief financial officer S Gopalakrishnan.

?The market now is slow. We are readying ourselves to cater to client needs when the economy revives,? he said.

Speaking to the media on the sidelines of a CII conference here on Wednesday, Gopalakrishnan said the company would hire about 18,000 employees this financial year. ?Offer letters have been issued to some of the campus recruits already and we would take some more freshers gradually.? Infosys currently employs about 10,000 people at its Hyderabad centre.

To equip entry-level employees with more competencies, the company has extended the training from three to six months before putting them to the regular work.

Meanwhile, with an eye on IT products space, Infosys has started piloting a retail product in India and other countries. The product would assist retailers with stock positions and other information, which is done manually now.

On the IT industry, the CFO said most companies impacted by the slowdown would recover in the mid-2010. "This would also increase the employment opportunities and as a result most of the companies would start recruiting around January 2010."

 

INFOPARK POSTS MAJOR ACHIEVEMENT
Kochi
The Pioneer

Despite the threats of global recession, Kochi-based Infopark claimed to have clocked an 87-perent growth year-on-year by achieving a gross turnover of Rs 463 crore in fiscal 2008-09. An official release said that the total turnover from Infopark, including other ancillary units, touched an all-time high of nearly 600 crore.

It said that the IT facility was able to add 2,500 professionals taking the total number of direct employees in the centre of excellence to 9000. Besides, the financial results also showed a significant push from the SEZ units and a planned increase in capital investment of 600 percent year-on-year.

Infopark Kochi had attracted a record number of leading world class established companies like US Technologies, BlueLabs Technology Solution, UCI Technologies, Arbitron, Zerone Consulting, NHR Outsourcing, SIT Mobile and Alcatel Lucent and the Indian behemoth Tata Tele Services.

The facility also succeeded in launching new Infoparks at Cherthala, Ambalapuzha and Koratty along with ramp-up of co-developer projects including L&T, Leela Group and two IT giants, TCS and Wipro, the release said.

Accroding to Infopark Kochi CEO Siddhartha Bhattacharya, the facility was daring to experiment with right mix of domain expertise, skills and experience with Government support and policies. Within a short span of time since its inception in the year 2004, Infopark had a great record of attracting software and service companies, he claimed.

The IT park was also involved in various other initiatives as part of Kerala IT. Following the Hub and Spoke model of development strategy of the State Government for the promotion of IT/ ITES industry in the State, the extension at Cherthala, Ambalapuzha and Koratty were being planned, the release said.

IT SEZ News: 28/7/09

EXTENSION OF SUNSET CLAUSE FOR INDUSTRIAL PARKS HAILED
Ronojoy Banerjee, Saahil Anant, New Delhi
Financial Chronicle

India Inc on Monday welcomed finance minister Pranab Mukherjee’s measure to extend the sunset clause for industrial parks by 2 more years up to March 31, 2011.

Ganesh Natarajan, CEO of IT firm Zensar Technologies, said, “Exporters will get a big relief. The slowdown had made life very difficult for most of them and hence the move is welcome.”

"There was a compelling case for the extension of tax holiday for industrial parks as IT spending is going down and the industry is facing challenges. This would help the IT industry as the STPI scheme is expiring and the only alternative left was SEZs," said Jai Mavani, executive director (infrastructure and government practices), KPMG.

"There was a demand for the extension. This comes as a major stimulus for India Inc from the government," a senior commerce and industry ministry official who did not want to be named said.

IT SEZ News: 27/7/09

SHRIRAM PROPERTIES TO INVEST RS 4,900 CRORE IN 3 YEARS
T E Narasimhan, Chennai, July 27, 2009
Business Standard

Shriram Properties, part of Chennai-headquartered diversified Shriram Group, is planning to invest around Rs 4,900 crore in various residential and commercial projects.

Shriram Properties managing director M Murali said that the company had set a target to become Rs 1,000 crore company over the next three years from the present Rs 450 crore.

Speaking about commercial projects, Murali said that so far the company was promoting IT/ITeS projects and delivered one million sq.ft. currently construction is going on at eight lakh sq.ft of land near Chennai. The company also got an approval to pro-mote a special economic zone for IT/TeS in Kolkata. Total investment in the proposed project would be around Rs 1,200 crore.

HELIPADS, SKYWALKS PLANNED AT MUKESH AMBANI PROMOTED SEZS
New Delhi, July 27, 2009
The Economic Times  Business Standard  

Mukesh Ambani-promoted Navi Mumbai SEZ Private Ltd has sought government permission to set up helipads and skywalks at its Special Economic Zones on the outskirts of the metropolis.

The SEZ firm co-promoted by Ambani's close associate Anand Jain has plans to build helipad at four and skywalks at five of its Special Economic Zones at Navi Mumbai.

As per the proposals submitted before the BoA, the helipads will come up in the "non-processing" areas of the three SEZs for IT and ITES, and one for the multi-services.

Three of these are located at Ulwe, and one at Kalamboli -- both in the Navi Mumbai area.

VIDEOCON GROUP PLANS NEW INVESTMENT PUSH FOR Q2
Mona Mehta, Mumbai, July 27, 2009
The Financial Express

The Videocon Group is charting out a fresh investment outlay for Q2 2009-10 to the tune of Rs 700 crore to grow its oil business. The group is planning to infuse Rs 100 crore this year to expand its retail business, apart from Rs 500 crore in new real estate projects over the next four years.

This is to revive the company's dented bottomline to the tune of 70% for the fourth quarter ended 2008-09. "The decision comes at a time when oil prices has touched 65 dollars a barrel in Q1 2009-10, as compared to 145 dollars in October 2008," Videocon Industries chief financial officer S M Hegde said.

TWO YEARS OF WAIT FOR AN ALLOTMENT LETTER
Chandigarh, July 27, 2009
The Indian Express

For two years now, Tech Mahindra has been running from pillar to post for allotment letter for 5 acres of land the company was allotted in August 2007.

Despite several communiqués exchanged between the company and the UT Administration, the letter seems to be stuck in bureaucratic wrangles and red-tapism.

"It has been almost two years now that we are waiting for the allotment letter. Despite several reminders to the Administration, nothing seems to be moving," Ranjit Puri of Tech Mahindra said.

Puri confirmed that the company hasn't received the allotment letter yet — the company had deposited Rs 50 lakh for it on September 18, 2007.

The allotment letter was to be issued by the Estate Office on receipt of the Rs 50 lakh, but it wasn't.

After two years, the 'tech-savvy' Administration, which boasts of promoting IT companies in Rajiv Gandhi Chandigarh Technology Park, says the letter is "under process".

There was some confusion in the Finance department, which has been cleared now. The letter is under process and should be issued soon," Director (IT) Manjit Singh Brar said.

The land in question is next to the 10 acres of land allotted to the company on May 26, 2006. The company had requested for this additional 5 acres, as it considered it useful for its operations.

And as the 10 acres was allotted under the Special Economic Zone, the company exercised the option to get the plot converted into leasehold on November 13, 2006. The lease deed for the plot was signed on April 15, 2009.

Also, despite the company submitting its building plans for the 10 acres of land in October 2006, they were approved after around seven months — on May 17, 2007 — by a committee chaired by the UT Finance Secretary.

INFRASTRUCTURE WORK AT SIPCOT IT PARK PROGRESSING: STALIN
Chennai, July 27, 2009
The Hindu

Work on the creation of infrastructure at the SIPCOT (State Industries Promotion Corporation of Tamil Nadu) Information Technology Park in Siruseri is progressing at a brisk pace.

In 1998, the SIPCOT had established the park in Siruseri on the Rajiv Gandhi Road on 782 acres of land, said Deputy Chief Minister M.K. Stalin, speaking at the inauguration of a 9-km arterial road in the park here on Sunday. So far, 490 acres of land had been allotted to 70 units, he said. Twenty units had formed their facilities with an investment of Rs. 10,000 crore and had begun their operations. About 30,000 persons had been provided direct employment in these units, and about 70,000 persons got indirect employment, he said. Construction work on 34 units was going on, he said.

The economic downturn had a lesser impact on India compared to the rest of the world, and on Tamil Nadu it did not have too much impact. The industrial progress was on track, he said. In the IT Park, five industrial houses, including Tata Consultancy Services, Xansa and Cognizant, had formed special economic zones and created facilities with an investment of Rs. 7,000 crore, he said. Tata Consultancy Services had created the biggest IT Park in Asia with an investment of Rs. 2,000 crore, he added.

TECH TURF
Nageshwar Patnaik & Sutanuka Ghosal, July 27, 2009
The Economic Times (Kolkata edition)

These days AK Panda, Orissa's head of IT promotion, leads a supercharged team specially created to get NRIs, particularly non-resident Oriyas (NROs), to invest in the state. Not only does he maintain a fat logbook of prospective investors, his colleagues are forever exhorting rich NROs living in some of the world's IT meccas to look homeward. Chasing NRIs and NROs, especially those in Silicon Valley, to hardsell Orissa as an IT investment destination is top priority for Panda & Co.

Their unalloyed mission — bringing in as many investors as possible for charging up Orissa's IT/ITeS turf. Panda's immediate target is ensuring the state achieves $1 billion in IT exports by calender 2012. At present, Orissa's software exports are a shade over Rs 1000 crore.

And playing lead IT evangelist is Orissa CM Naveen Patnaik, who has urged his IT department to leave no stone unturned in bolstering the state's IT infrastructure. If anything, the sense of optimism is instantly palpable the minute you step inside the state IT department.

Not only is Orissa's IT secretary PK Mohapatra gung ho on Bhubaneswar's prospects as a future IT hotspot, even World Bank sees Orissa as a top investment destination in eastern India.

Evidently, the Orissa government has realised the crying need to market Bhubaneswar as an IT hub. Which is why, it is participating in all high-profile tech events. From the CeBIT fair in Germany in March 2009, the Orissa government will next showcase the state's strenghts in IT/ITeS realm at the GITEX mega technology event in Dubai this October.

Orissa is also poised to unveil its new Information & Communication Technology (ICT) Policy, 2009. "We've set up a committee with representatives from the state government, IT industry and the academia who are going through the ICT policy of other states before finalising Orissa's own IT policy. Our officials are also interacting with US-based software firms to get a fix on IT proliferation there," says Panda.

Suparno Moitra, Nasscom regional manager (East) feels the Orissa government should continue working towards increasing the visibility of the location as a potential IT-BPO destination. Fostering IT entrepreneurship is another area, which is being strongly pursued by the Orissa government to attract small and medium sized investors. "Mentoring is crucial to attract SME players into the state IT sector. We are organising seminars across the state to attract local entrepreneurs," notes Panda.

Initiatives taken by the Naveen Patnaik government are already bearing fruit. Orissa's IT/ITeS units have collectively posted an impressive growth in software and IT services exports in 2008-09. Exports grew by 39.05 percent over the earlier year's exports (Rs 840 crore). In fact, software exports from Orissa for the first time raced past the Rs 1,000 crore-mark even amid one of the worst recessions in recent memory. Orissa achieved gross software exports of Rs 1,168 crore and now finds a place in the country's Top 10 software exporter pack. "We will witness a similar growth in the current fiscal this year too," says a beaming Panda.

Kerala and Gujarat are the only other states in the Rs 1,000 crore-plus software exports category, which have higher growth levels than Orissa in 2008-09. The national average growth in 2008-09 stood at nearly 21 percent.

Over 70 IT/ITeS units registered under the Software Technology Parks of India (STPI) in Bhubaneswar are operating in the vicinity of the temple town from various IT zones. And another 20 are in the process of setting up new campuses at various IT zones in the city.

Other IT/BPO firms operate either from the STPI incubation space or from rented premises. Among the biggies operational are Infosys, TCS, Mahindra Satyam and Wipro. Companies which aspire to expand and are doing well are Mindfire Solutions, ESS, CSM Technology, Aabsys, JSS, Medwrite and many more.

Those planning to take big strides in the state include MindTree Consulting, Genpact, Zensar, STG Chips, Perfectus Technology and ICICI.

Interestingly, Infocity II, which has been rechristened Infovalley, and is spread over 400 acres-plus, will be the largest IT SEZ in the eastern region. Infrastructure linkages like road, electricity and water-supply are now being worked out at an estimated Rs 150 crore to make it an integrated knowledge township.

Three other IT SEZs in Orissa have received central approval. Though one of these, the DLF Infopark, has sought a de-notification, it is anticipated to come up soon with a proposal of setting up a world-class IT Park under the STPI scheme.

Thirty acres have been identified for Mindspace IT SEZ close to the Mancheswar Industrial Estate, Bhubaneswar. The state government is also considering setting up the first IT Investment Region (ITIR) in Orissa and IL&FS has been engaged for conducting the techno economic feasibility survey.

 

IT SEZ News: 24/7/09

MAYTAS VENTURES APPROACHES GOVT TO SURRENDER ITS SEZ
New Delhi
The Economic Times  The Statesman  The Financial Express  The Hindu  The Hindu Business Line  

Financially "poor" Maytas Ventures has approached the Centre to surrender its SEZ in Andhra Pradesh, citing economic slowdown and also requested for waiver of over Rs 31 lakh benefit it had availed during the setting up of the project.

Maytas Ventures SEZ Pvt Ltd has approached the Commerce Ministry for surrendering its 14.15 hectare sector-specific SEZ in Ranga Reddy district in Andhra Pradesh.

"The developer has submitted that due to financial recession they have decided to get their SEZ denotified," a source said, adding that the case would be take up by the Board of Approval (BoA) meeting on August 11.

Though the developer has not availed any exemption towards customs duty, excise duty and sales tax for their SEZ but has availed service tax exemption.

"They have availed service tax exemption for Rs 31,46,550 ... requested to waive off (need) to refund the said service tax.. in view of poor financial position," the source said.

Maytas, promoted by kin of B Ramalinga Raju - founder of Satayam Computer, has plans to set up six IT/ITeS SEZs in Andhra Pradesh of which three zones have already been notified by the government and rest are in the process of being granted formal approvals.

The developers of these SEZs are Maytas Enterprises, Maytas Ventures and Maytas Hill Country SEZ. Maytas Enterprises has also been granted one year extension to set up its IT/ITeS SEZ in the Ranaga Reddy district.

 

BOA TO MULL 5 SEZ PROPOSALS ON AUGUST 11
New Delhi
Business Standard  The Economic Times (Delhi edition)  

The Commerce Ministry will consider on August 11 five proposals for setting up SEZs, including those of Brooke Bond Real Estates and Deccan Infrastructure.

The 19-member inter-ministerial Board of Approval (BoA) headed by Commerce Secretary Rahul Khullar may also give formal approval to 25 developers who have been given more time to execute their projects.

The Board would also take a decision on requests of Lanco Solar and Cochin Airport International to set up special economic zones (SEZs), a source said.

Brooke Bond Real Estates plans to set up an IT\ITeS SEZ over 11 hectare in Karnataka, while Deccan Infrastructure has moved the BoA for permission to develop two tax-free zones in Andhra Pradesh.

The developers, including Ansal SEZ in Gurgaon (Haryana), Ranbaxy Laboratories in Mohali (Punjab) and Maytas Enterprises in Ranga Reddy (Andhra Pradesh), who have been given one-year additional time to go ahead with their projects, may get formal approval for the extension, sources said.

Two developers - Maytas Ventures and Sanvo Resorts - have requested the BoA to de-notify their projects.

So far 576 formal approvals have been given for setting up SEZs, of which 319 have been notified. Exports from SEZs grew by 36 percent to Rs 90,416 crore in 2008-09.

 

IT COMPANIES RECONCILING TO PAY MORE TAX AS STP EXEMPTION ENDS
Shamik Paul/Adith Charlie, Bangalore/Mumbai
The Hindu Business Line

IT firms such as TCS, Infosys and Wipro expect their effective tax rates to go up in the coming years as more of their delivery units come out of Software Technology Parks of India.

This would further impact the net profit of these companies, already under pressure because of the global economic crisis.

The actual taxes paid by a corporate divided by the net taxable income expressed as a percentage, gives the effective tax rates.

The vendors setting up delivery units in Software Technology Parks (STPs) enjoy a tax holiday for 10 consecutive years. However, after that period, they are no longer eligible for the exemption. The latest Budget gave the STPI scheme an extension of one more year; it will now end in March 2011. The extension will not benefit units that are more than 10 years old.

Infosys Technologies, which had an effective tax rate (ETR) of 17 percent last fiscal, expects the ETR to touch 20 percent this financial year.

“It is a natural conclusion that the ETR will go up in the next few years as more of our units come out of STPI,” said V. Balakrishnan, Chief Financial Officer, Infosys.

The company estimates its ETR at 24-25 percent in the next fiscal. “However, it is difficult to say because the tax rate would depend on how much of our growth will go into the SEZs,” Balakrishnan added.

For many companies, most expansion is happening in SEZs, which provide tax benefits on all profits from export for the first five years, and tax breaks for 50 percent of profits from exports in the next five years.

However, some companies might find it difficult to start work in an SEZ because it is more cost-intensive. Country’s largest software exporter TCS also expects its ETR for the fiscal to rise from 14.34 percent in 2008-09.

“We expect it to go up to 17 percent by the end of the current fiscal. Apart from this (the STPI ceiling), we do not see any other reason for the effective tax rates to go up,” S. Mahalingam, CFO and Executive Director, TCS, said.

For the quarter ended June 2009, Wipro had an ETR of 15.5 percent.

“We expect the ETR to be in the range of 15.5 percent for the remaining quarters. For fiscal 2011, we expect it to increase 100-200 basis points,” said a Wipro spokesperson.

Apart from the top companies, the small and mid-size firms also expect their ETR to go up. MindTree Ltd, which had an ETR of 12-13 percent in fiscal 2009, expects it to go up by two percentage points to about 15 percent this fiscal.

Sonata Software also expects its ETR to go up, but marginally. "We have some of the units coming out of STPI. But for us many are still within STPI," said B. Ramaswamy, Managing Director, Sonata. The effective tax rate currently is about 8-9 percent, he added.

IT SEZ News: 23/7/09

BUILDER'S NOVEL WAY TO DELIVER IT SPACE
D Govardan
Financial Chronicle

At a time, when several property developers across the country are sitting on large stock of unoccupied built-in IT space, Chennai-based India Land and Properties, part of Americorp Group, is going ahead with its Rs 320 crore, 1.8 million sq ft, IT special economic zone (SEZ) at Saravanampatti in Coimbatore.

But, instead of following the trodden path of getting the building ready and waiting for occupants, India Land adds space as and when it gets a client. Helping it to achieve this unique concept is the pre-cast concrete technology that ensures that the company gets the required space ready in record time.

Use of pre-cast concrete technology enables it to deliver the space, complete with glazing and air-conditioning, within three months after signing up a client.

"Normally, this technology is used in construction of bridges. For the first time, it is being used in buildings in a big way," said S Salai Kumaran, director, India Land.

The IT SEZ is being developed jointly with Coimbatore-based KGISL. According to him, pre-cast concrete technology is being increasingly used in countries such as Singapore, Dubai and Indonesia.

"The method not only ensures zero wastage, but also offers better quality and saves cost," he added.

Slabs are produced at the site using steel moulds. These are then lifted and fixed using high capacity cranes. "We have signed up contractors from Singapore and they have already completed 5 lakh sq ft of pre-cast concrete slabs," Kumaran said.

Using the pre-cast concrete technology, the builder is able to complete one floor in about seven to eight days, against 12­20 days taken in conventional method, where quality could be comparatively inferior and there's more wastage.

"We have used this technology for beams and floors. It can even be used for columns and pillars," he pointed out. In fact, impressed by the delivery standards of the contractors, Americorp Construction, the parent company of India Land, has taken them on its rolls.

Kumaran said the use of precast concrete technology has helped the company save up to 15 percent of the estimated Rs 320 crore project cost.

"Though the economic slowdown has delayed the completion of the project and the resultant interest charges may gobble up the purported savings from use of this technology, we expect to complete the project within the estimated budget. Had we opted for traditional construction method, the project would have cost us Rs 350 crore due to delay and interest burden," he explained. Of 1.8 million sq ft, about 1.3 million sq ft will be office space, with the rest would be reserved for basement parking and other facilities.

 

APOLLO TYRES MULLS RS 1,000 CRORE INVESTMENT IN KERALA
Kochi
Business Standard  The Economic Times  

Apollo Tyres was planning to invest about Rs 1,000 crore for setting up an IT park and a hotel complex in Kerala, Apollo Group Chairman Onkar S Kanwar today said.

There were plans to set up a five star hotel and IT park at the 30 acres land at nearby Kalamassery where it has a tyre unit, Kanwar said.

The company had decided to shift the unit to the Rubber Park at nearby Irapuram. But due to strong objection from the trade unions, it had been held up.

Kanwar said the unions have more or less agreed for shifting the factory.

Apollo Tyres is planning to double the capacity of the unit from 100 tonnes per day to 200 tonnes per day after it was shifted to the rubber park.

On the company's revenues, Kanwar said from the India operations, the total business revenue was Rs 4,100 crore and it was expected to grow to Rs 6,000 crore by 2011 fiscal.

Apollo's 60 percent turnover was from Indian operations and the target was to raise it to 70 percent, he said.

A Rs 2,000 crore new plant was coming up in Tamil Nadu and it was expected to be completed in another 11 months time where truck and bus radial tyres would be manufactured.

The company was planning to put in Rs 100 crore investments in its Perambra unit.

35 percent of the total tyre production was from Kerala. The company had invested about Rs 300 crore in the last two years for production, he said.

 

GREEN NOD FOR EFFLUENT PLANT AT FAB CITY SEZ
Hyderabad
The Hindu Business Line

The Andhra Pradesh Environment Impact Assessment Authority has issued environmental clearance for the proposed common effluent treatment plant (CETP) planned at the Fab City Special Economic Zone at Maheswaram near Hyderabad.

The Fab City SPV (India), a subsidiary of Andhra Pradesh Industrial Infrastructure Corporation (APIIC) and IL&FS, has established a CETP on build-own-operate basis through IL&FS Waste Management and Urban Services Ltd.

According to an IL&FS statement, the initial capacity of the CETP at the Fab City would be 1.1 million litres a day which would be scaled up to meet the future demand. . The first module would facilitate the photovoltaic cells manufacturing units being established in the initial phase.

 

IT PARK LOOKS FOR ‘ANCHOR PLAYER’
Vijayawada
The Hindu

Though recession is proving to be a little dampener, officials of the L&T Hitech City project at Kesarapalli near here are confident that a major software company will be attracted to fill the space of “anchor player” in the project.

Total space
So far, only two companies have come forward to occupy some space at the IT Park’s first tower, which will have a total space of nearly 2 lakh sq.ft. on completion of all works soon. The Extranet Software Solutions and the Tektraks Technologies have booked space here and they are going to occupy the same after the tower is inaugurated next month.

For giving a kick-start to the project’s entire operations, it will need at least one major software company initially and its role will be pivotal in enhancing the image of the IT Park as a potential software hub in the region.

The officials are also looking at the possibility of attracting small and medium players by offering space in blocks of 3,500 sq. ft. each.

The IT tower will have five floors, including the ground floor, each having 40,000 sq. ft. and providing the best infrastructure needed for software companies. A major company having the potential to occupy one entire floor of 40,000 sq. ft. should come to give the much-needed initial boost to the prospects of the IT Park.

At the recently conducted roundtable on ‘Industrial development in Vijayawada and surrounding areas’, Vijayawada MP Lagadapati Rajagopal cited the example of IT Park project in response to the concern expressed by some speakers over lack of industrial development in the district.

The MP said that a good IT Park was ready for occupation at Kesarapalli, but only two companies expressed interest so far. He said that the first priority should be to attract software companies and develop the city as a software hub, as it would not require huge tracts of land.

The officials of the IT Park say even big companies will slowly turn their attention to tier-two cities like Vijayawada in due course of time. They maintain that the companies can reduce costs significantly as space will be offered to them for a rental that is 40 percent cheaper than the same in metro cities. This is available with the same quality of infrastructure, says IT Park chief operating officer V. Udaya Bhasker.

He says consultations are on with three to four companies as of now, while enough space will be offered to attract small and medium players too.

IT SEZ Updates: 22/7/09

HIMACHAL CABINET NOD TO GREEN IT HUB
Charanjit Ahuja, Chandigarh
The Financial Express

The Himachal Pradesh cabinet has cleared setting up of the state’s first information technology park, green IT hub. The state government plans to set up five IT parks -- at Waknaghat and Nalagarh in Solan district, Palampur and Nurpur in Kangra district and Dalhousie in Chamba district. The cabinet note said, “The Himachal Pradesh cabinet has decided to float tenders to invite open bids from private players to design, develop, build an information technology park as Green IT Hub of world-class standards.”

The proposed Green IT Hub would be set up over 65 acres of government land at Waknaghat with an estimated investment of Rs 460 crore. The cabinet note claimed that the proposed IT hub would provide jobs to about 25,000 educated, unemployed youth of the state. It said financial capability and experience would be the criteria for determining the eligibility of the bidder, while the state government shall act as facilitator and provide external infrastructural facilities only.

Officials at the Himachal chief minister’s office told FE that at least 12 companies have shown interest in preparing a plan and determine the costs for setting up the state’s first IT hub. These include DLF Universal, Parsvanath Developers, SKIL Infrastructure, RVRCL Infrastructure, Uppal Housing, Maheshwari Mega Ventures and Omaxe Infrastructure City Development, among others

The proposed IT hubs would be in addition to a nano biosystem technology park to be set up at Aduwal near Nalagarh in Solan district.

 

RIL PLANS SEZ AT MOHALI
Chandigarh
The Tribune

Reliance Industries (RIL) and YellowStone Infra is coming up with an IT SEZ in Mohali. The SEZ will have Satyam Computers as its anchor company.

An official press release said they were in the process of land acquisition for the company, and the project will be launched by October this year. “The SEZ will be spread across 125 acres. We have already got the change in land use (CLU) and have acquired more than 50 percent of the land needed for the SEZ,” it said. The release further said that they were in talks with other IT majors like US-based ETech and CM Software, Amadeus Software and Moksha BPO for setting base in the SEZ. The total investment in the SEZ will be around Rs 940 crore. The promoters are also in talks with a leading hospitality chain to set up a five-star hotel in the SEZ.

 

S K BIRLA CO PICKS UP SPACE AT RMZ FACILITY
Sumali Moitra, Kolkata
The Times of India (Kolkata edition)

Commercial real estate major RMZ Corp on Tuesday said it has signed up S K Birla Group firm VXL Technologies as a client for its upcoming IT park project at Rajarhat and added that it stayed committed to put up 10 lakh sq ft of office space at the chosen site by next year.

“VXL Technologies has picked up 10,000 sq ft at our Kolkata facility. The deal happened very recently,” RMZ vice-president (leasing) Juggy Marwaha said from Bangalore, while not elaborating on the deal terms.

Incorporated in 1966, VXL Technologies is an active player in the networking and communications arena. While its design centre is based in Birla Buildings in Kolkata, manufacturing operations are undertaken from Faridabad. “We will move part of the Faridabad operations to the RMZ facility so that there is better coordination between the design centre and the manufacturing function,” Birla Eastern president B D Bose said.

“At a time when a lot of companies are moving out of Kolkata, the move is a demonstration of our faith in the city,” Bose added. Birla Eastern is one of the holding entities of the S K Birla Group.

“We will be ready with our first building of 1.8 lakh sq ft by September, of which 1.3 lakh sq ft has been already booked by McNally Bharat Engineering (jointly owned by the B M Khaitan and GP-C K Birla groups), and 30,000 sq ft has been earmarked for an incubation centre,” Marwaha said. “Construction is already on at another building of 2 lakh sq ft, which should be in place by November,” he added.

IT SEZ Real Estate: 20/7/09

DLF LOOKS FOR A WAY OUT OF RS 1,500 CRORE CHENNAI SEZ
D Govardan, Chennai, July 20, 2009
Financial Chronicle

DLF wants to get out of the Rs 1,500 crore IT SEZ project at Taramani in Chennai.

The company has asked the state government and Tidco to either call a re-tender at the original base price fixed for non-SEZ commercial activity, or refund the Rs 725 crore it had paid last year while taking possession of 26.64 acres on a 99-year lease.

DLF had planned to develop 4.5 million sq ft space along with the state-owned Tidco. The first phase of 2.5 million sq ft of processing area was to be ready by the end of 2009.

Among the reasons listed by the company for its demand is the delay in getting SEZ status for the special purpose vehicle, DLF Info Park Chennai (Developers), due to lack of contiguity of the land parcel.

The Tamil Nadu development commissioner for SEZs had cited the presence of a mass rapid transport system (MRTS) railway line that divides about a 3-acre chunk from the main land parcel for not recommending the SEZ status.

“Tidco had obtained the SEZ approval for the site even before it opened the price bids. The MRTS line existed even then. If Tidco could get the approval, how come DLF is now harping on the issue of non-contiguity of the land parcel,” a senior state government official said, when contacted by Financial Chronicle

He was skeptic about DLF being refunded Rs 725 crore.

“The company may have changed its plans due to the economic slowdown and the need to preserve or get back the cash,” the official added.

Tidco had invited bids for the IT SEZ project at Taramani in September 2007. DLF bagged the bid and signed a formal agreement with Tidco on April 23, 2008. It paid Rs 725 crore ahead of the July 31, 2008 deadline.

Other reasons cited by DLF include the refusal of the Chennai Metropolitan Development Authority (CMDA) to entertain DLF’s project plan and also a right-of-way claim by Ascendas IT Park for an 18-metre road.

According to the company, the land and the board of approval’s clearance have not been transferred to the SPV and remain in Tidco’s name. Several other approvals, including environment and airport height restriction clearances had been taken in the SPV’s name.

A way out now for DLF could be to seek extension of deadline for implementing the project.

“The 99-year lease period offers enough cushion for any level of commercial activity and viability,” the official said.

VEGA KEEN TO DEVELOP INNOVATION PARK
Rahul Wadke, Mumbai, July 20, 2009
The Hindu Business Line

The Mumbai Metropolitan Region Development Authority’s vision for an innovation park could be made a reality thanks to an Italian company.

Venice Gateway for Science and Technologies (Vega), which undertakes industrial research for companies back home, is keen on developing a similar one in Maharashtra. MMRDA’s model would typically involve an investment of Rs 1,000 crore across 2,000-3,000 acres near Mumbai.

Vega has linked universities, centres of excellence and the manufacturing sector to sharpen the competitive edge of Italian companies in the global market. Over 200 companies have established their offices in the park.

The park will serve as an incubation zone for nanotechnology and biotechnology. “Our talks are at a nascent stage, but such parks could come up near Panvel or Lavasa near Pune. MMRDA could enter a joint venture with the Maharashtra Industrial Development Corporation and other private sector companies for this exercise. It is now working on the techno-economic feasibility study,” said Ratnakar Gaikwad, Commissioner of MMRDA.

Giorgio Mattiello, International Projects Advisor (Innovation Area), Vega said, “We want to build on the experience of the Venice park and create a similar model that can meet local requirements.”

 

IT SEZ News: 16/7/09

INFOPARK BOARD’S NOD FOR CONSTRUCTION AT CHERTHALA
Kochi
The Hindu

A two-lakh sq.ft capacity building will be constructed in the first phase of the proposed IT park at Cherthala. This was decided at the meeting of the Board of Governors of Infopark, which met here on Wednesday.

The meeting evaluated the progress of the preliminary works of the proposed Information Technology parks in Cherthala, Ambalapuzha and Koratty being set up under the aegis of Infopark.

The meeting evaluated the construction of Athulya, the new building complex coming up on the Kochi campus of Infopark, and expressed satisfaction about its progress.

Commercial Real Estate: 15/7/09

OF AIRPORTS AND IT PARKS…
Hyderabad
The Hindu Business Line

The proposed airport at Gulbarga remains on paper only. There is considerable interest in an Information Technology (IT) Park but does the potential exist? Is the Budget benefiting small businesses?

These were some of the issues that cropped up at an interactive session on ‘Union Budget-2009’, jointly organised by the Hyderabad Karnataka Chamber of Commerce & Industry (HKCCI) and The Hindu Group.

There is considerable interest for the development of an IT Park. What are the requirements and does Gulbarga have the potential, members of the HKCCI wanted to know.

PRIVATE FIRMS PUT SEZ PLANS ON HOLD
New Delhi
Financial Chronicle  The Economic Times (Delhi edition)  

In view of the slowdown, the credit-crunched private firms have put on hold their plans for setting up special economic zones (SEZ) in the national capital

At a recent meeting with Delhi chief secretary Rakesh Mehta besides other industries department officials, private developers such as DLF Commercial Developers and Consolidate Finvest and Holdings expressed their inability to invest in the project.

“All the private developers who were keen to set up the special zones were not keen to invest at this time, citing financial crunch,” the chief secretary said.

He said only two projects of the state government's own DSIIDC (Delhi State Industrial and Infrastructure Development Corporation) have been given approval for development of IT park and gems and jewels SEZ. The DSIIDC SEZ projects will now be reviewed by the commerce ministry for final approval, Mehta added.

Since the notification of the Delhi SEZ policy in February, the state government had received eight proposals from the developers with some of them even identifying the location for their projects. While Sweet Home Estate has identified land in Vasant Kunj, both Sumit Apartments and Consolidate Finvest and Holdings planned SEZ in Nazafgarh and DLF Commercial Developers in Jasola.

As per SEZ policy endorsed by Delhi Cabinet in 2006, no polluting industries will be allowed to be set up inside SEZs and environmental clearance will be a must for all projects except those dealing with ITES.

 

Commercial Real Estate: 13/7/09

PUNJAB CLEARS MUCH-AWAITED SEZ BILL
Rahul Kumar, Chandigarh, July 13, 2009
The Economic Times (Delhi edition)  Business Standard  

With the SAD-BJP government clearing the much-awaited Punjab Special Economic Zones Bill, 2009, on Saturday, the decks have been cleared for developers to give a major boost to the development of the SEZ's in the state.

As per the norms laid down in the policy, the requirement of areas for setting up SEZs in case of a multi product SEZ is 1,000 hectare, product-specific 100 hectare, IT-specific 10 hectare and warehousing 40 hectare. Speaking about the policy, state industries & commerce minister Manoranjan Kalia said due to paucity of land and high cost in the state, the government has asked the Centre for relaxation in the aforementioned norms and has also sought permission for development of SEZs as per viability of the project, to be determined by the developer.

 

MOHALI TO BE DEVELOPED IN PHASES UNDER MASTER PLAN
Nitin Jain, Mohali, July 13, 2009
The Indian Express

According to the final master plan of the state Government, Mohali will be developed in phases. Reason: simultaneous treatment of the entire 16674-hectare area, marked for development, will be neither feasible nor desirable.

The phasing plan, the copy of the master plan says, has been designed to ensure that the development of land within the local planning area is well-coordinated and involves minimum investments on the provision of infrastructure.

Considering their potential to spearhead IT growth, education and business tourism in the region, the Airport City, Knowledge City, Business and Hi-tech Parks have been earmarked for the first phase of development.

IT SEZ Updates: 9/7/09

BOA TO TAKE UP FRESH SEZ PROPOSALS ON AUGUST 11
New Delhi
The Economic Times  The Financial Express  

The Board of Approval, the apex body which clears Special Economic Zone projects, will meet next month to approve fresh proposals.

"The Board of Approval chaired by Commerce Secretary Rahul Khullar will take up fresh proposals for setting up SEZs on August 11," a senior Commerce Ministry official said.

The last BOA held on June 19 had approved two fresh proposals, ratified extension of time to 23 developers, including Satyam Computer Services, for implementing tax-free enclaves.

Senior officials from different ministries, including Finance, Home Affairs and Defence, would be attending the meeting, a Commerce Ministry official said.

So far 576 formal approvals have been granted for setting up of SEZs, out of which 319 have been notified.

Exports from SEZs grew by 36 percent to Rs 90,416 crore in 2008-09 from Rs 66,638 crore in the previous fiscal.

COMING SOON, CHEAPER LOANS FOR SEZ DEVELOPERS
Amiti Sen, New Delhi
The Economic Times

The government may soon release a new set of rules that will make domestic borrowing cheaper for developers of special economic zones (SEZs), thereby boosting investment in these tax-free manufacturing hubs.

The Reserve Bank of India (RBI) recently granted infrastructure status to projects in these SEZs that will let them access cheaper funds. The central bank will now release revised commercial real estate exposure (CREE) guidelines for banks to identify activities that can be classified as infrastructure.

The draft norms have been circulated for comments to banks and general public, and once they are finalised, SEZ developers will be able to source funds at about 2 percent cheaper rates for most activities in the processing areas that are likely to be classified as infrastructure, a government official said.

The move will benefit both small and big SEZ developers such as Reliance, Adani and Essar, and IT companies such as Infosys and Wipro.

IT FIRM IN ARYABHATTA PARK TO TAKE OFF IN AUG
Hubli
The Times of India

The IT dreams of the twin-cities may be a reality soon. The first ever IT company to occupy space in the Aryabhatta Tech Park is set to take off in one month's time. Thanks to the infrastructure development taking place in the park and in the city.

A software development and BPO firm N S Infotech Pvt Ltd took up construction work on the 40,000-sqft area it had been allotted. Company promoter Santosh Huralikoppi said here on Monday that the firm will start functioning from the second week of August.

The Hubli-Dharwad Municipal Corporation, that is in charge of infrastructure development in the 26-acre park, has completed building a one-kilometre-long road inside the park and begun work on other facilities.

Assembly Speaker Jagadeesh Shettar who inspected the area on Monday, said facilities like fixing boundary line and constructing compound walls, landscaping and other amenities will be provided soon. He said, the IT department officials had promised more funds for these works.

The state government is trying to get SEZ status for the IT park. For this, we need to have a large tract of contagious land. We need to shift the KSRP building that is situated inside the park area. "I will take up the matter with the state law minister Suresh Kumar," he said.

The Karnataka State Law University authorities are using portions of the KSRP building and they will be asked to move out too. Shettar hoped that more IT and ITES companies will start functioning from here. "I am sure these companies will start work once all infrastructure is ready. However, the state government will take back the land if the companies don't start work in two years," he said.

 

IT Sez Real Estate News: 2/7/09

INFRASTRUCTURE DEVELOPMENT APACE IN MADURAI IT PARKS
Madurai
The Hindu

The Electronics Corporation of Tamil Nadu (ELCOT) has decided to start construction on an area of 50, 000 square feet in the proposed information technology parks at Ilanthaikulam and Vadapalanji on the outskirts of the city.

Addressing a meeting organised by the Madurai zone of Confederation of Indian Industry (CII) here on Wednesday, Santhosh Babu, Managing Director, ELCOT, said that tenders had been finalised for construction work and built up space would be offered for local entrepreneurs in the special economic zones.

The space to be provided by the ELCOT could also serve as an incubation centre for big companies.

The Vadapalanji IT park, where land had already been apportioned for IT majors, would have space for both SEZ and non-SEZ companies. On the plea of CII members that small IT companies which concentrated only in the local market should be given space in the SEZ, he promised to take it up with higher officials.

Development of infrastructure in the Madurai IT parks had gathered momentum, the MD said. Now compound walls, roads and ducts were being put in place. This would be completed by September at Ilanthaikulam and November at Vadapalanji, where the available land was yet to be leased out fully. Dr. Santhosh Babu, who had earlier inspected the ongoing work at both places, said that infrastructure development was taken up at a cost of Rs 22.43 crore. Provision had also been made to apportion small areas, starting from two acres, for small companies.

Replying to members’ questions, Dr. Santhosh Babu encouraged them to present their products to ELCOT, which, in turn, would recommend them for use by other government departments and agencies.

On the rate the ELCOT would fix for space in the IT park, he said that the organisation was not looking at profits but was keen to develop the IT industry in a tier two city like Madurai. He also welcomed the idea of having common infrastructure facilities for small and medium IT companies.

IT SEZ News: 1/7/09

GOVT MAY EXTEND STPI TAX BENEFIT FOR ONE YEAR
Prabhakar Sinha, New Delhi
The Times of India

The government is likely to extend the tax benefits on exports earnings of the information technology (IT) units, operating from the Software Technology Parks of India (STPI), to March 31, 2010 in Budget. The scheme was expired in March 2009.

Under the STPI scheme, export incomes are exempted from tax under Section 10(A) for the first 10 years of operations. But as the clause is effective only till March 31, 2009, those units, which were set up after 1999-2000, are not able to avail this benefit.

As India's export is down in February, March and April 2009 by around 33% (year-on-year), the commerce ministry fears that withdrawal of the tax incentives on exports earnings will affect the sector badly.

Total exports achieved by the units from STPI were Rs 2,02,580 crore in 2008-09 as against Rs 1,80,155 crore in 2007-08, showing a growth of over 12 percent.

A senior commerce ministry official said the extension of tax break to STPI units is very crucial. He said the ministry has recommended extending the benefit by three years till 2011-12. But, as the finance ministry wanted to discontinue the tax concession to STPI units and extend the same to units operating from Special Economic Zones, he said that ultimately, the extension might be realized for only one year till 2009-10.

The finance ministry and commerce ministry are divided on the issue. The commerce ministry wants tax break on exports from STPI should continue andsuch facility should not be allowed for software companies in SEZ. But, the finance ministry wanted to discontinue the STPI facility and allow the same in the SEZ.

But, the official said if the facility is discontinued before a company completing 10 years of operations with tax concessions, their profitability would be affected. This will make their export pricing uncompetitive. The government had announced its policy in 1997 to discontinue it from 2007-08. As many companies opened their units in STPI for tax benefits, the benefit was extended to 2008-09.

As government has allowed 15 years tax holiday in SEZ, software companies have shifted their focus to start operations from SEZ only. Therefore, the IT industry wants that till a large number of SEZ facilities become operational, the government should continue the STPI benefit.

IT SEZ Real Estate: 26/06/09

REALTY ARENA LOOKS FOR A REVIVAL SHOT
Anuj Puri
Mail Today

This has been a year of extremes for the Indian real estate market. Over the past four to five months, demand for property sank to its lowest point in many years, and a revival was definitely called for. There is much to be said for the fact that we have seen a significant resurgence in demand immediately after the recently announced election results.

The sector is definitely banking on the benefits of a stable and forward looking government to champion its cause.

The Budget should also provide clarity on the Software Technology Park of India ( STPI) guidelines. IT developers need to know whether this facility will continue to be available to them, or it will be modified.

The sector is reeling under unreasonable taxation burdens. Give us a Budget that frees the rental income yielded by commercial premises from service tax, and also extends the tax holiday under Section 80- IA (4) (iii) for developers who build, operate and maintain industrial parks so that the compromised IT industry gets a shot in the arm. The tax exemption for developers who construct flats of smaller size should also be reintroduced.

IT SEZ News: 25/06/09

 

DENOTIFIED SEZS TO REFUND SOPS
Amiti Sen, New Delhi
The Economic Times

Developers of denotified special economic zones (SEZs) will have to refund tax sops given by the government, according to new rules on the anvil, a government official said. The government has found it necessary to draw up rules for denotification of SEZs after some developers recently sought permission to close projects due to the economic slowdown and contraction in demand.

The new rules are likely to disallow denotification if a considerable amount of construction has happened in the zone or if units have come up there. Denotification would be voluntary.

A SEZ developer gets a number of tax sops, including exemption from customs duties and excise on goods used in the project and from payment of income tax. “All the sops enjoyed by the developer have to be necessarily paid back with interest before the denotification is allowed. This will be a prominent part of the rules,” the official said.

The rules will be kept flexible to deal with fresh issues raised by new cases, the official said, on the condition of anonymity. “Once the rules are framed by the government, they would act as a guide for the board of approval (BoA) for SEZs to deal with denotification applications. As and when the board feels the need, appropriate changes or additions could be made to the rules,” he added.

The BoA for SEZs, which is chaired by the commerce secretary and includes members from finance, revenue, home and agriculture departments, decides on all applications related to SEZs, including approval, notification as well as denotification.

There would also be no denotification if the developer does not want it. “There would be no coercion. If developers are law-abiding and have not broken any rules, then the government cannot denotify their zones,” the official added.

Earlier this month, real estate major DLF got in-principal approval to denotify four of its IT/ITES SEZs. The government will formally denotify the zones once DLF pays back all the tax saved, pegged at Rs 6-7 crore, through exemption from customs, excise, service tax and income tax. The amount is being verified by the commerce department.

Raheja Universal has also applied for denotifying its IT/ITES SEZ in Navi Mumbai, and reducing by half the size of its second SEZ in the region. “Once we have the denotification rules in place, it will be easier for the BoA to decide on cases of denotification as they will have set rules to follow.

We would also be adhering to the law ministry’s view that if something can be legally notified, there should also be provisions for its denotification,” the official added. As of March 31 2009, the government has formally approved 568 SEZs in the country, of which 311 have been notified and ready to start operations, with 90 already operative.

GREATER NOIDA GETS ITS FIRST IT PARK
Ashok Kumar, Prachi Raturi Misra & Saikat Neogi
The Financial Express

Wegmans Industries Pvt Ltd has completed construction of an IT park in Greater Noida, near Delhi. This is a part of the Business Park, which envisages a four-star hotel, shopping malls and residential areas as well.

“The IT park, which forms part of a business park, has been completed as the first phase of the project. In the second phase, there would be a mall, 200 service apartments and a four-star hotel. This ten-acre project will see an investment of Rs 250 crore,” says Surendra Kumar Gupta, chairman, Wegmans Industries.

Elaborating about his plans, he says, “The entire earthquake resistant business park will also have studio apartments to supplement the four-star hotel.”

Gupta believes that the IT park will usher in a new phase of development in the NCR region. “This IT Park will give direct employment to about 5,000 people, and also generate indirect employment in the area,” he says.

Talking about the prospects of the business park amid economic downturn, Gupta says that India will continue to be the IT leader because of cheap availability of skilled manpower. “IT is down but not out and we will always have a competitive edge because of low-cost engineers in India,” says Gupta. He adds that high-end products are in good demand owing to the comprehensive range of services.

TELECOM FIRMS BAIL OUT IT PARKS
D Govardan
Financial Chronicle

A pulsating IT & ITeS sector has changed Chennai’s skyline over the past five years. IT parks have sprang up everywhere, including the congested T Nagar, in suburbs such Guindy, Manapakkam and the city’s outskirts like OMR (the city’s IT corridor also called Old Mahabalipuram Road) and Ambattur.

Property developers opted to develop IT parks (both STPI and SEZ), leading to an oversupply, which put pressure on lease rentals.

Suddenly, when the global downturn struck, and order books started thinning, the IT parks found few takers.

Thankfully, the telecom industry, growing at a scorching pace, has provided a glimmer of hope to commercial property developers in Chennai.

With the government issuing new licences and permitting some of the existing players to enter new circles, the commercial property market has once again started buzzing with activity. Though nowhere comparable to the space appetite of the IT sector, the telecom sector, nevertheless, has enthused property developers.

“Earlier, IT companies used to drive the absorption of space. Now, telecom companies are doing it,” says Rajesh Babu, chief consultant, Recs Group, a fast growing property advisory firm based out of Chennai.

Telecom players such as Sistema, Datacom, Idea and Swan Telecom have already leased IT space, varying between 20,000 sq ft and 60,000 sq ft across the city. For instance, Swan Telecom (Etisalat) had taken 60,000 sq ft on lease at India Land in Ambattur.

Support service providers such as call centres and tower operators too have joined the fray. Indus Tower has taken on lease 20,000 sq ft in an IT Park in Ikkaatuthangal.

“The trend is likely to improve with more players set to join the fray by launching their services. Some of these players are also likely to establish their back office operations in the city,” says Rajesh Babu. “Chennai is a popular destination for business houses across sectors. These telecom players too will prefer to have a base in Chennai, even while expanding their operations across Tamil Nadu,” he added.

While a majority of telecom players prefer taking up space in the 20,000–40,000 sq ft range, the support service providers are going in for smaller spaces. Still, these cumulatively account for large space absorption without drawing the market’s attention.

“Thanks to the new licences and circles, we have seen an influx of telecom companies. They are looking at only IT parks that have 100 percent power back-up and better infrastructure,” says Jaggy Marwaha, head of leasing, RMZ Corp, a Bangalore-based property developer with IT parks in Chennai and other cities.

At least four telecom companies seem to have already taken up spaces in RMZ Corp’s IT park, just off OMR at Perungudi. These include Datacom and Swan Telecom. Companies such as Unitech are looking for suitable spaces. “Telecom is one industry that continues to show considerable resilience and is absorbing space,” says Marwaha. Until the revival of IT/ITeS sector, property developers seem happy to dial up telcos for letting out space.

STATE CLEARS PROPOSALS WORTH RS. 10,958 CRORE
Bangalore
The Hindu

The State Government on Wednesday cleared 24 projects with an investment of Rs. 10,958 crore. These projects are expected to provide employment to 60,138 people.

The approval was granted at a meeting of the State High Level Clearance Committee held here under the chairmanship of Chief Minister B.S. Yeddyurappa.

The investment proposals include four iron and steel firms to be set up at an estimated cost of Rs. 3,999.47 crore; a 435-MW thermal power plant to be set up by the Chennai-based Surana Power Ltd. in Raichur at a cost of Rs. 2,398 crore.

Two wind power projects — one with a capacity of 24 MW and another with a capacity of 10 MW — too were cleared to be set up in Belgaum and Gadag districts respectively. The Belgaum-based Vishwanath Sugar Limited, a company owned by the family members of Horticulture Minister Umesh Katti, has got permission to enhance its sugar mill’s crushing capacity from the present 2,500 tonnes of cane per day to 5,500 tonnes.

Proposals for setting up an ITES park with an investment of Rs. 459 crore and an ITES Special Economic Zone with an investment of Rs. 615 crore were also cleared at the meeting, which was attended by several Ministers.

The district-wise break-up of the investment proposals shows that Raichur has got clearance for the highest investment of Rs. 2,398 crore followed by Haveri (Rs. 1,800 crore) and Bagalkot (Rs. 1,500 crore). Bangalore city has got two projects with an investment of 1,090.31 crore.

COIMBATORE HAS TO TIDE OVER SLUGGISH PHASE IN REALTY
Coimbatore
The Economic Times

Laxity in promoting Coimbatore as next IT destination after Chennai, time-consuming approval process, speculative land prices, conservative nature of people and lack of political clout are some of the key reasons identified behind the sluggish growth in real estate in the techcity.

Speakers at a forum organised by Confederation of Indian Industry (Coimbatore) and Jones Lang LaSalle Meghraj (JLLM) here on Tuesday. However, believed the realty sector has enough potential and it is poised to pick up growth in about six months to one-year.

In his presentation on Coimbatore Edge, Ramesh Nair, managing director of JLLM, Chennai and Hyderabad regions said branding Coimbatore, as a single entity is very important for the growth of the city. Also, the city has the capabilities to be promoted as a highly promising alternative IT/ ITES and a biotech destination.

"There is a huge potential for local, national as well as international developers in the real estate sector in Coimbatore," Abhishek Kiran Gupta, Head – Research, JLLM said. He cited high literacy rate, more number of people graduating out of many renowned colleges and the city’s contribution to the growth in the per capita income of the country.

"Coimbatore is a self-made city and we haven’t had a trigger point yet. If only the city had got an IT park five years ago when Chennai got it in 2000, it would have propelled a greater growth today," said Ashok Bakthavathsalam, managing director, KG Information Systems.

D R Sekar, chairman, Builders Association of India (BAI), Coimbatore Chapter added that getting approvals for land and buildings have been a difficult and laborious process in Coimbatore and whole of Tamil Nadu.

"Compared to other neighbouring states, the approval process takes a long time in TN and therefore all promoters are shying away from investing in the state," he said, adding a single window system is the need of the hour.

Rajesh B Lund, vice president of Confederation of Real Estate Developers Association of India (TN) said, apart from the delay in approvals, the market fell when the new projects were about to take-off. "It led to a lull in the construction industry," he added.

Of the proposed seven SEZs in Coimbatore, only three including Tidel Park are under construction now. Likewise, many companies evinced interest to build malls in the city but today only two projects – Brooke Fields and Fun Republic are getting ready. "The lack of night life in Coimbatore and the delay in IT infrastructure has led to slowdown among retail mall developers," said A Sridharan, managing director, Covai Propery Centre.

"Coimbatore is not a modern city and it is also conservative and not used to mall culture. But, after these two malls start operations, people will get used to it," added Sekar. Also, with the new generation starting to work, the city is bound to catch up with experiencing a new culture", he said.

On land values, Rajesh Lund said though prices have dropped drastically compared to the all-time high in 2007-08, the landowners still stick to the high prices and are not willing to sell lands. About the city attracting big investments, he added, once infrastructure falls in place investments would automatically flow in. He also hoped that non-resident Coimbatoreans would return to the city and invest here. Ashok added that with the opening of the Tidel Park and the IT-SEZ in Keerenatham village, nearly 16,000 seats would be created in another 1 to 1.5 years time.

"If these new professionals are to come to the city, then there would be huge demand for affordable housing and also serviced apartments," he added. Already leading promoters in the city have planned to construct budget houses costing Rs 15 lakh to Rs 20 lakh each.

HDFC branch head S Ramesh Kumar expected the market to pick up since the costs have come down. "Also with the fall in interest rates , a large number of people would be attracted to real estate now," he said, adding the future trend also points to a reduction in interest rates.