DLF, which recently asked the government to cancel the approval for an IT special economic zone (SEZ) near the capital city, may start five of its other SEZs after 2010 on an expected revival in demand for real estate, according to sources in the company.
The proposed SEZs are in Khurda district in Orissa, Kancheepuram in Tamil Nadu, Kolkata in West Bengal, Sonepat in Haryana, Gandhinagar in Gujarat among others, according to the list of SEZs notified by the government.
“It is not feasible to start all the SEZs at one go, since it involves a lot of investment and time. We will do it in a phased manner. We will complete the already started SEZs in 2010 and then look at others,” said a DLF spokesperson.
DLF is already developing five SEZs — Gurgaon (two), Hyderabad, Chennai, Nagpur — expected to be completed by 2010. The company is planning to make a total investment of Rs 40,000 crore in its 10 SEZs.
Developers need to operationalise their IT SEZs within three years after the project is notified. While the already started SEZs got notified between December 2006 and April 2007, most of the yet-to-be-launched SEZs got notified in 2008. Recently, DLF asked the commerce ministry to denotify an SEZ at Shivaji Mart near Delhi for lack of interest from companies for IT space. Instead of leasing space, the company now plans to build office space and sell it, sources added.
However, analysts have concerns about sufficient demand for SEZs in the coming years as the economy slows down and companies, mainly IT firms, go slow on their expansion plans.
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“If the economy weakens further, they may have to defer the launch of new SEZs. If there is no demand, there is no point in launching new projects,’’ said an analyst with an international brokerage, who did not want to be identified.
But a DLF spokesperson denied any impact of the slowdown on their plans, “If there was no demand, we would not have continued with our existing plans. If we are going ahead with them, it means we have enough demand for those projects. We have understanding with 70-100 Fortune 500 companies, who will follow wherever we launch our new projects,” he said.