Mumbai seeks US investment to rival Dubai economic zone

Thursday, 31 October 2002, 08:00 Hrs
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NEW YORK: Maharashtra is seeking investment from American companies for its $2 billion special economic zone (SEZ) near Mumbai to rival Shenzen in China and Jebel Ali in Dubai.

Officials of the western Indian state's City and Industrial Development Corporation (CIDCO) were in the US on the last leg of its tour to rope in an overseas consortium to partner the SEZ near Mumbai.

"Several top companies, very strong people have responded favorably to becoming a strategic investor in the project," CIDCO vice chairman and managing director Anil Kumar Lakhina said.

"I expect most of them to send their expression of interest by middle of November and expect to finalize the partner by the end of this year."

Lakhina was here last week for a series of road shows to hard sell the project. He also visited San Francisco and Boston in the US, besides holding similar investment meetings in London, Dubai, Singapore and Malaysia.

He said CIDCO, promoted by the Maharashtra government, would develop the project jointly with the partners, for which a special purpose vehicle or a financing arm would be floated.

"We intend to offer a majority stake of up to 74 percent to the strategic partner in SPV. CIDCO's equity will be in the form of immovable assets," said Lakhani, who was conferred the Padma Shree award by the Indian government for public service.

"The trade zone will serve as a base for trans-national companies and even rival and compete with free trade zones like those in the Middle East, China, Singapore or Malaysia," said Lakhina.

The project is being built in an area of 4,377 hectares with an estimated capital of $520 million in the first phase at Dronagiri near Navi Mumbai and the Jawaharlal Nehru Port Trust.

The strategic investor, in turn, would promote the project and get trans-national companies to set up shop in the trade zone.

Lakhina, whose experiment in reforming the bureaucratic system inspired a documentary by filmmaker Basu Bhattacharya, said CIDCO had retained the services of McClier, an architectural and master planning giant in the US, to draw up the concept plan for the SEZ. McClier has commenced the master planning exercise.

He said the Tata Economic Consultancy Services (TECS) had conducted a feasibility study of the project and had said it offered an internal rate of return of over 30 percent.

Calling it the "most ambitious project of the Maharashtra government", Lakhina said: "Our own Shenzen or Jebel Ali will be on Indian soil with international systems."

The laws were being amended so that the zone would have separate labor legislations, he said.

There will be single-window clearances for investors in the zone and neither the federal nor state government would interfere in its functioning.

"The Navi Mumbai SEZ will function like a foreign country, so to speak within India," Lakhina said. "Its location on the Pune-Thane-Mumbai corridor, which is referred to as the knowledge corridor, will provide any investor ready access to skilled manpower."

He said developers of Navi Mumbai SEZ would be granted full autonomy to develop townships within the trade zone. The allocation of land and its pricing would not be governed by existing regulations, which have often been termed as tough and mired in red tape by investors.

These incentives apart, there would also be a wide range of fiscal sops, including exemption of levies such as sales tax, corporate tax till 2010, stamp duty, octroi and other purchase tax.

Source: IANS
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