Real estate major DS Kulkarni Developers Ltd (DSK) has withdrawn its proposal of developing multi-service special economic zone(SEZ) over 250 acres in Phursungi at Pune. The company told Business Standard that the project is not much beneficial due to new government policy on SEZ.
Instead, the group now plans to invest Rs 8000 crore in a residential township.
In a notification, the company said, " The group has sent the withdrawal request to SEZ authorities for sector specific SEZ for multi services and it has been approved."
DSK has acquired 285 acres of land in Phursungi at Pune, out of which 250 acre was proposed for the SEZ project. The rest 35 acres of land is kept for reserve. The firm had proposed multi-service special economic zone (SEZ) at Phursungi which has received formal approval from the Board of Approvals of the Ministry of Commerce and Industry in January 2009.
Talking about the withdrawal of this project D S Kulkarni, CMD, DSK Group said, " It is true that we had withdrawn the SEZ proposal and decided to develop a complete new township on this land. Due to government's new policy developing a SEZ is not feasible for us. According to the new rule, we are now permitted to develop SEZ only on 62.5 acres and 62.5 acres out of 250 acres for commercial developments like malls, hospital, theatre, school etc. And on the remaining land, we were planning to develop a residential project.
The SEZ facility was planned in association with a US-based company. If developed, this SEZ would have been a ‘processing zone’ equipped with an industrial and product design studio, gaming and an animation studio and engineering unit. Information technology, bio-technology and financial institutions will also be present, apart from a diamond processing unit, and companies from the banking and insurance sector.
"We were willing to develop an SEZ on this land. But, developing SEZ on 62.5 acres is not beneficial for any developer. Even, town planning standards does not allow this as there is 15 per cent reservation for the basic amenities like schools, hospitals, shopping and entertainment. Besides, there is 10 per cent reservation for civil services”, Kulkarni added.
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According to Kulkarni, the government had earlier permitted to 50:50 land ratio to develop an SEZ and residential project, based on which the company had planned the residential ad the SEZ projects. But, now the company has decided to phase out its SEZ plan and will construct a new residential township.
Talking about this new venture Kulkarni said, "This is a huge residential project. We are investing Rs 8000 crore in this township, whichwill complete in the year 2017. The total 1.80 crore square feet area will be constructed which includes around 22000 residential flats. Residential projects are our biggest strength and we are developing it for last 30 years.”
The company has also planed an equity sale to raise Rs 500 crore for this project with the option of raising money through qualified institutional buyers (QIBs). The DSK Group has ten companies across different sectors under its wing.