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.”