Construction of Shriram Properties, promoted by Rs 6,000-crore Bengal Shriram Hi-Tech City at Uttarpara on the outskirts of Kolkata, is set to begin by the end of November.
Shriram Properties, real estate arm of the Chennai-based Shriram Group, will invest Rs 400 crore in setting up an information technology (IT) park and a residential complex, in the first phase, to be copmplete in three years.
“We will set up an IT special economic zone (SEZ) and a residential township at Uttarpara, which will be developed on 4 million sq/ft,” said Debashish Som, CEO, Bengal Shriram Hi-Tech City.
The project that was envisaged in 2007, has faced delays due to formalities with the process of licensing, land schedule problems, appointment of independent surveyors and environment clearances.
Delays in the project have led to an increase in the initial estimated cost, which was projected to be Rs 5000 crore. Som, however, did not attribute this increase in cost to the delay.
For the project, promoters engaged financing from two US-based private equity (PE) firms- Walton Street Capital, based in Chicago and Starwood Capital, based in Greenwhich.
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“Although it is true that the initial estimated project cost was pegged at Rs 5000 crore, it was increased later, especially since the initial estimates were devised on rough approximation,” Som said.
Despite the increase in project costs, Shriram Properties is not looking at additional investors. The additional financing requirements of the project will be fulfilled through debt and internal accruals.
Haldia Ammonia Project
The Rs 1,600-crore ammonia gasification project that was slated to come up by the end of the year, under Ennore Coke, has been delayed due to procrastination in allotment of coal linkages to the company by the West Bengal government.
“There is a need for a proactive government. The government of West Bengal, through the (West Bengal) Mineral Development and Trading Corporation, has the power to allocate coal linkage for the project, and yet the application for the same has been pending for the past year,” said Ganesan Natarajan, president and CEO, Ennore Coke.
Natarajan said that the project could not be implemented in the absence of the allocation of local coal linkages.
“It is impossible for the project to be implemented in the absence of linkages, because with coal imports, the cost effective equations do not work out,” he said.