CA scraps Andhra SEZ

After the initial hype, some companies that rushed to set up infotech special economic zones are now finding the going tough.

CA Computer Associates India Pvt Ltd, which has an approval for setting up an infotech SEZ in Ranga Reddy district of Andhra Pradesh, has informed the commerce ministry that it is withdrawing its application.

Computer Associates follows Hewlett-Packard, which withdrew its application earlier this year.

Of the 148 infotech SEZs approved by the board of approval, the inter-ministerial body for clearing such zones, a mere 29 have been notified.

A company, after obtaining an initial approval from the board, has to revert with land details and its business model for the zone to be notified.

Infotech SEZs need to have a minimum built-up area of 100,000 square metres.

"Companies initially apply for an infotech SEZ since the minimum land area required is just 10 hectares. However, once they get the approval to develop an SEZ, they have to attract a sufficient number of other companies for setting up units inside these zones," an official pointed out.

Commerce ministry officials said companies like Google, which are looking to set up a unit inside an SEZ, were now being courted by developers of infotech SEZs with attractive prices.

"Developers are quoting lower real estate prices to lure companies," the official said, adding that Google was understood to be scouting for four locations in the country.

Around 154 applications for infotech SEZs are pending with the board of approval.