THANKS TO STPI UNCERTAINTY, TN IT UNITS MOVE TO IT SEZS
Chennai
The Economic Times
In Tamil Nadu, uncertainty over the extension of STPI scheme has led to companies preferring to set up new units in IT SEZs rather than STP units. The trend is seen especially among large companies and MNCs, which stand to gain by registering themselves as co-developers in IT SEZs
STPI Chennai is all ears for the government announcement on extension of the STPI (software technology parks of India) scheme till 2013. For, IT companies in Tamil Nadu have gradually been putting their new eggs in the SEZ basket for the last two years.
"Uncertainty in STPI policy has prompted IT companies, especially the large ones and MNCs, to set up their new facilities in IT SEZs rather in our units," a senior official in STPI Chennai said. While 141 IT units were registered under STPI in 2007-08, the number has come down to 110 in 2008-09. "It has nothing to do with the global downturn for these facilities are pre-planned ones, and companies had planned for the gradual shift to SEZs quite at least by 2006-07."
According to the official, at least 10 percent of the IT/ITeS facilities set up in STPs in a year are large ones from the top five IT companies in India. "This year, 50 percent of such large investments – anything between a 100-seater to a 1000-seater facility - went to SEZs," he said.
Chennai headquartered software services firm Cognizant had decided two years before that SEZs give much longer lasting benefits to their operations, and started making all its new investments in SEZs. It has fully owned facilities in the Madras export processing zone (MEPZ) SEZ, and leased units in the private SEZ promoted by DLF near Chennai.
"Across India, Cognizant's investments in SEZs started several years ago, and most of our fully-owned SEZs are under various stages of construction. Much of our incremental business is serviced out of SEZs, both fully-owned and leased," a statement from the company said.
In Tamil Nadu, there were 22 IT/ITeS units set up in SEZs in 2007-08 and 18 units in 2008-09. "Large IT companies find it convenient to register as co-developers in an IT SEZ rather than lease out or invest in own units," an official from ELCOT (electronics corporation of Tamil Nadu) said. ELCOT, a state owned corporation, develops and promotes IT SEZs in the state. "Co-developers are automatically allotted land to set up their units, in exchange for a relatively small investment as compared to the promoter."
The minimum requirement for a promoter in an SEZ is to develop 25 acres of land, whereas for a co-developer it is 2 acres. There are nine SEZs approved under ELCOT in TN, amounting to a total land area of 1892.41 acres, of which 449.5 acres have already been allotted while ELCOT has received applications for allotment of 435.84 acres. "Nearly, 70 percent of the land allotted or to be allotted is for co-developers," the official said.
Some of ELCOT's major co-developers are Wipro, HCL and Satyam in Chennai, and Sutherland, Syntel and TIDEL (a state owned IT infrastructure company) in tier II cities. Wipro, HCL and Satyam are in the process of constructing 14 lakh sq. ft, 12 lakh sq. ft. and 4.5 lakh sq. ft. of units respectively.
Tata Consultancy Srevices is also said to be engaged in co-developing an SEZ in through Tata's construction arm Tata realty and infrastructure.
SMARTCITY ROW TO BE SORTED OUT SOON: KARIM
Kottayam (Kerala)
The Hindu
Minister for Industries Elamaram Karim has expressed confidence that the row over the SmartCity project would be sorted out within a week.
Speaking to media persons here on Monday, Karim said Tecom, the Dubai-based promoters of the project, have not said that they have abandoned the project. The State government was committed to the implementation of the project and there was no going back on it, he said. The procedural formalities were being completed.
However, on account of the just concluded general elections, there was some delay in making policy decisions, he said. He also pointed to the statement by Minister for Fisheries, S. Sarma, who had expressed his commitment to implement the project.
To another question, Karim said the government has decided to take over TECIL, Chingavanom, which has remained closed for the past one decade. The management had shown its inability to revive the factory and as such, the government has decided to take it over, including its land.
SMARTCITY PROMOTERS RAISING UNTIMELY DEMANDS: SARMA
Kochi
The Hindu
Fisheries and Registration Minister S. Sarma on Monday reiterated the government's stand that a decision on the 12 percent freehold land demanded by Tecom, the promoters of the SmartCity Kochi project, could be taken up only after the company implements the master plan for the project.
Referring to Tecom's decision to cancel its contract with the U.K.-based consultancy Colin Buchanan during his inaugural speech at the N.G.O. union meet in Aluva, the Minister said that the framework agreement reached between the government and the company had made it categorically clear that the freehold land issue could be taken up only after the implementation of the master plan for the project. The government was bound by the agreement, he said.
DEVELOPMENT OF IT PARK SLOWS DOWN
Chandigarh
The Indian Express
Herds of grazing cattle and wild growth on vacant plots greet visitors at the Rajiv Gandhi Chandigarh Technology Park. While the UT Administration had acquired around 600 acres of land to develop the IT Park, little has been achieved.
Inaugurated by Prime Minister Manmohan Singh in 2005, this was to be the first IT Park with SEZ status, and was meant to provide employment to thousands of people in the city.
But with the land acquired for development in Phase III under dispute and the onset of economic slowdown, the pace of development has slowed down.
At present, around 13 buildings are being constructed in the park; work on some started more than two years ago.
The park received one of the biggest jolts when Parsvnath Developers, which was to construct flats and villas in the area, backed out. Around 123 acres of land allotted to the company is now lying vacant.
Also, Wipro Technologies Limited, which was allotted 30 acres, has still not started construction work. And construction work on Tech Mahindra's 15 acres, allotted two years ago, is still on.
Social activist Hemant Goswami said the Administration created an artificial need for land. "Most of the companies that shifted here were already operating from SCOs in the city. When the Phase I and II were not successful, there was no need for acquiring land for Phase III," he said.
Recently, some prominent residents of the city also wrote to Home Minister P Chidambaram, highlighting the problem.
Brig K S Kahlon, president of the Chandigarh Sanjha Morcha, says there is no harm in acquiring land if something constructive has to be built. "But most of the land acquired for the IT Park has not been put to its optimum use. It is lying vacant. Still land was acquired for Phase III," he said.
BOARD OF APPROVAL TO MEET ON JUNE 19 FOR SEZ APPROVAL
New Delhi
The Hindu Business Line
The Board of Approval (BoA) on special economic zones (SEZ) will now meet on June 19 to consider, among other proposals, the plan to allow the metro rail to pass through the SEZ to be promoted by DLF at Gurgaon.
Earlier the meeting was scheduled for June 17.
The BoA, headed by Commerce Secretary Rahul Khullar, will also consider the application of realty firm K Raheja Universal for de-notification of its IT/ITeS SEZ in Navi Mumbai. The firm has sought to surrender the SEZ citing economic slowdown.
The DLF Cyber City Developers has requested the BoA to grant permission to the proposed metro corridor to pass through its SEZ in Gurgaon.
"...Since the project is on the advance stage of approval from the Haryana government, they (DLF) have requested to grant permission to pass the proposed metro corridor through Cyber City SEZ," the BoA agenda said.
The Board may also formally approve extension of time period for developing 23 SEZs, including three IT/ITeS special economic zones of Satyam Computer Services, in Andhra Pradesh.
Besides, the BoA will also consider two fresh proposals for setting up of SEZs. The BoA on Export Oriented Units will also meet on the same day.
So far, 568 formal approvals have been granted for setting up SEZs, of which 315 have been notified.
ANSAL API QIP TO RAISE RS 1,500 CRORE
Vivek Sinha, New Delhi
Mail Today
Close on the heels of plans unveiled by Unitech, Indiabulls Real Estate, Parsvnath Developers and Omaxe, the Delhi-based Ansal API too wants proposes to mop up about Rs 1,500 crore through the qualified institutional placement (QIP) route. QIP of shares has, of late, become the favoured route for raising funds by the real estate developers. The developer informed the BSE that its board of directors has approved its plan to raise Rs 1,500 crore through issue of equity shares to resident and non-resident qualified institutional buyers. The meeting of the board of directors was held on June 15, 2009.
In its communiqué to the BSE, Pranav Ansal, vice-chairman and managing director of Ansal API said, "The raising of funds via the QIP route is a capital raising exercise to provide both business and financial strength to the company and to significantly enhance company's flexibility." Ansal added that the funds through this QIP would also be used to partly finance and support the two large hi-tech integrated townships in Lucknow and Dadri being built by the company.
The 1760-acre Sushant Hi-Tech City in Lucknow and the 2500-acre Megapolis in Dadri consists of hotels, buildings, shopping malls, IT parks, banks and group housing projects. Later on speaking to Financial Chronicle, Anil Kumar, chief executive officer of Ansal API said, "The firm will seek shareholders approval for the fund raising initiative through the postal ballot, which is expected to be completed within a month's time."
