Dholera SIR all ready to kickstart its plug-and-play infrastructure

Despite setbacks, it is offering attractive incentives to woo companies

The 6.5-km-long canal that cuts across the sprawling Dholera Special Investment Region (SIR) is a showpiece of sorts, complete with recreational facilities, manicured gardens and gazebo tents on both sides for people to relax and even party in.

The canal is also the heart of the Dholera SIR, the dream project of Prime Minister Narendra Modi, which he announced in 2013 when he was the chief minister of Gujarat. It tackles a serious challenge in this low-lying industrial area where the fear of flooding due to heavy rains kept many potential investors away, despite attractive incentives and promises of lucrative memorandums of understanding (MOUs).  

Officials of the Dholera Industrial City Development Ltd (DICDL), a special purpose vehicle (SPV) between the Gujarat government and the Centre, say that they have laid over 138 km of storm water drainage across the region, which will be channelled into the canal and then drained into the sea a few kilometres away.  

Says Rahul Chavan, assistant manager, marketing and promotion, DICDL, “The problem does not exist anymore. We have created a system which will ensure that even during very heavy rains the water will be drained out in a few minutes.”

The SIR, located over 110 km from Ahmedabad and a few kilometres away from the Indus Valley Civilisation site of Lothal, is being built in phases over an area of  920 sq km. The first phase, which is in the works, spans 22.54 sq km. 

A high tech “experience centre” in the DICDL office introduces you to the Dholera dream which claims to be the first greenfield smart city project in the country with a footprint larger than the city state of Singapore.

A command centre which has already been built, will control and monitor and provide emergency response in the industrial city through thousands of sensors, which will also cover the residential areas. Over 72 km of roads have already been built, with utility ducts, cycling tracks and rapid transit corridors, to provide plug-and-play infrastructure. What’s more, by August next year the industrial city will get closer to Ahmedabad. A four-lane expressway, which is under construction, will reduce the distance between the two cities by half — to a mere one hour.

Dholera shot into the public eye last September when a joint venture between Vedanta and Foxconn announced that it would set up the country’s first fab plant there. Vedanta, along with other partners, also decided to acquire land for a semiconductor display plant in the same place. The total investment on the cards: $20 billion.

Of course, the decision sparked fireworks in Maharashtra, which was also in the reckoning for the plant. Opposition parties attacked the Eknath Shinde government for its failure to get the investment into Maharashtra and alleged that it had rolled over to make way for the project to be set up in the neighbouring state.    

Dholera is no stranger to controversy and some big upsets. Its ambition of becoming the semiconductor hub of the country got a big jolt when in July this year, Foxconn withdrew from the JV with Vedanta and decided to chart its own course in chip making. The JV was expected to be the anchor investor which would help the industrial city to take off, the way Tata Motors has in Sanand, also in Gujarat. 

However, officials in the state government say that both Foxconn and Vedanta have individually shown interest to set up their respective plants in the industrial zone and talks are in progress in this regard. But, of course, this would mean a delay in implementation, even if the proposals are cleared. 

In yet another setback, the Tatas and a consortium led by Airbus, which are planning to manufacture transport aircraft  in Dholera, announced recently that they will establish the first manufacturing facility in Vadodara.

However, Tata Group chairman N Chandrasekharan while laying the foundation zone of the project in Vadodara also reiterated that in addition to the facility in Vadodara it will establish a very large scale aerospace and high tech manufcaturing facility  in Dholera.wen the facility becomes available. . A senior official of the DICDL says, “The Tatas will come once the airport is ready.  It will be ready by 2025 for freight, and by 2026 for passenger traffic. Construction is on for the first runaway is on and the cabinet has given the approval for two runways.” 

The official adds that the SPV set up for this will invest Rs 900 crore in the project.

Despite the challenges, Dholera is leaving no stone unturned to woo investors. Ather Energy has had discussions to set up their second plant in the SIR, although they are scouting around in other states as well. Also, delegations of companies from Japan, South Korea and Taiwan have been visiting the industrial city to study the scope in manufacturing electronics. But the officials are reluctant to give out any names. 

The good news is that some projects, especially in the green space, are on the verge of completion or are already activated. Tata Chemicals has recently got possession of the land where it is planning to put up a lithium ion battery plant, with a capacity of 10 GWH  with a recycling plant say officials. RPower’s plant to make solar cells and module manufacturing is nearing completion too. Tata Power Solar has already commissioned a 300 mw  single axis solar tracker system, which is the country’s largest so far, while Torrent Power’s 100 mw solar plant is already up and running. 

Clearly, the state government is making an all-out effort to encourage semiconductor and electronics companies to build their entire ecosystem in Dholera. Says Videh Khare, mission director of Gujarat State Electronic Mission,  “Dholera power, which is of high quality with redundancy at three levels, is 40 per cent cheaper than competitor states (Maharashtra, Andhra Pradesh, Tamil Nadu and Madhya Pradesh). Over and above that, there is an additional subsidy Rs 2 per unit for electronics and semiconductor projects. We also have enough potable water capacity to support 8 fab plants if required, which is coming from the Narmada canal.”

The SPV is, in fact, doing much more than building a canal to drain water. As a second line of defence, it is also undertaking an earth fill exercise to elevate the low-lying land by 1.5-1-8m. 

The third step taken to ensure that water from upstream rivers during heavy rains does not enter the industrial city, is a 3.5-m high bund that has been built on one of the rivers. Similar bunds are being constructed on other rivers nearby.

Summing up the mood in the SIR, an upbeat Chavan says, “The plug and play infrastructure is all ready. Now we have to aggressively get companies to come to Dholera.”