New law may give a fillip to Mumbai special zone

The Union Budget may announce the framing of a law on special economic zones (SEZ) that will be introduced in the coming session of the Parliament.

This is expected to give a fillip to the Mumbai integrated special economic zone (MISEZ) project in neighboring Navi Mumbai, which is close to financial closure (debt of over Rs 2,000 crore has already been tied up for this).

The promoters of the project, SKIL Infrastructure Ltd, have appointed Jurong Consultants Group, Singapore, a wholly owned subsidiary of the government of Singapore, as the master planner and engineers for the project.

According to a SKIL Infrastructure executive, the Rs 4,860 crore MISEZ project, which has integrated the Rs 3,909 crore Mahamumbai SEZ project and the Rs 951 crore Navi Mubmai SEZ project, is proposed to be financed by equity capital of Rs 1,504 crore, lease deposits and internal accruals of Rs 349 crore and debt of Rs 3,007 crore.

The MISEZ project has been jointly appraised by the Industrial Development Bank of India (IDBI) and the Infrastructure Development Finance Company (IDFC). The lenders include IDBI (Rs 500 crore), IDFC and HDFC (Rs 450 crore), Housing & Urban Development Corporation (Rs 250 crore) and Infrastructure Leasing & Financial Services (Rs 150 crore).

The International Finance Corporation (IFC), Washington, and Asian Development Bank, (ADB), Manila have also agreed in principle to provide debt or equity funding of $75 million (about Rs 338 crore) each.

The remaining debt is being tied up by IL&FS from other banks and financial institutions. A joint meeting of 24 banks and institutions, chaired by IDBI, was held for participation in the MISEZ project. There was a huge response by all the banks and institutions for funding the project.

Some of the engineering, procurement and construction (EPC) contractors are Sembcorp of Singapore, Laing O'Rouke of the UK, Larsen & Toubro and Skanksa of Sweden.

MISL is also discussing with the Jurong Group for the operation and management of the zone to ensure that world class efficiency and operating standards are maintained at the SEZ.

Ascendas of Singapore is likely to be retained as marketing partners along with other international real estate majors such as Colliers International, Knight Frank, Jones Lang LaSalle and Cushman Wakefield.

It is proposed to market the zone through channel partners and consulting firms such as KPMG, Ernst & Young, PriceaterhouseCoopers and Deloitte.