Despite the finance ministry's external commercial borrowings (ECB) division having repeatedly rejected the proposal of Rameshwar Vaibav Development to bring in equity through overseas corporate bodies (OCB) route, the Foreign Investment Promotion Board (FIPB) has extended the validity of the government's approval to the company's Rs 2,150 crore International Tourist City project. The project encompasses leisure, entertainment, business partner and holiday homes.
The application has also received the approval of Union commerce and industry minister Murasoli Maran.This has come as a respite for the project, which had been hanging fire because of not getting the approval from concerned departments to bring in the much required OCB investment.
Rameshwar Vaibhav Development has a foreign collaboration with Universal Holdings of West Indies and the US-based Austin for setting up this project. The joint venture was established in 1999 to set up a modern infrastructure project with a total project cost of Rs 2,150 crore. Of this, Rs 550 crore was supposed to be in the form of equity and around Rs 1,600 crore as debt or loan.
Out of the approved foreign equity of Rs 550 crore, Rs 275 crore was to be brought in through overseas corporate bodies and Rs 137.5 crore through non-resident Indian participation.
The company has informed that it had nearly completed the arrangement with its foreign collaborator for bringing in the equity through other commercial borrowings as approved by the secretariat for industrial assistance. The OCB application for foreign currency loan was repeatedly rejected by the ECB Department which is causing the project the delay.
According to the company's submission, about $5332.09 (Rs 1,919 crore) would be paid as lumpsum payments for technical knowhow ($18 lakh), engineering project management services ($2,233.72 lakh) and payments for designs ($3,071.37 lakh).
