MADC hikes Nagpur SEZ land rates

The Maharashtra Airport Development Company (MADC), which has been entrusted with the task of setting up the special economic zone (SEZ) project and the multi-modal air cargo and passenger hub at Nagpur (MIHAN), has increased the rates of land in the SEZ area.

Gurgaon-based infrastructure company, DLF, proposes to build a hub for IT and IT enabled services (ITES) units at the SEZ and it recently got land from MADC at Rs 35 lakh an acre. DLF secured 153 acres of land in the SEZ area where it proposes to develop a BPO zone. It is in talks with leading companies in the field such as GE (now Genpact), Nokia, Ericcson and ABN Amro for space in the proposed project.

A DLF spokesman confirmed an "in-principle" green signal had been received from these companies. According to an agreement between DLF and the actual user companies, the basic infrastructure will be provided by DLF from which these companies will buy space. The spokesman said an investment by DLF of over Rs 1,500 crore could be expected in the next 5 to 8 years as the area will be developed in phases. Similar zones have been developed by DLF in cities like Hyderabad, Cochin, Ambala, Kolkata and Pune and it has a client base of 300 companies.

The increased rate of Rs 35 lakh per acre for lease of the land by MADC is a third time rise over an year. Satyam was the first to get land at Rs 15 lakh an acre in the SEZ area after which the rates had been increased to Rs 25 lakh per acre. Now, a further Rs 10 lakh per acre increase has been effected.

The cost of land by the MADC is arrived at by calculating the cost of development of the SEZ and the availability of disposable land with the developing agency. The cost includes expenditure on land acquisition, rehabilitation of outsees, building material, etc.

The SEZ is to come up over an area of 1,400 hectares out of which 400 hectares have been earmarked for facilities like road, power transmission and distribution system, green zones, drainage etc. R C Sinha, MD of MADC, said the cost of developing land was rising at a rate of 10 to 12% every year basically due to escalation in the rates of cement and steel.

The present rates were still slightly below the approved increase and they had been so maintained to woo more investors to the region. "A hike can be effected soon," he said.

So far over 600 acres have already been allotted at different rates...Major companies that have booked land include, Satyam, L&T, Dell Corporation, Shaporji Pallonji, Ambuja Reality-RNZ Group Combine, and KSL Industries. Though Infosys had evinced interest, it has not yet purchased a plot. Similarly Patni Computers has chosen to set up its facility at Aroli near Mumbai, Sinha said.

Except KSL, which is setting up a textile unit, all others are IT firms and Shaporji Pallonji is setting up an IT Park.

MADC has allocated contracts worth Rs 324 crore for provision of basic facilities in the SEZ area. The company has till now been able to meet its expenses through internal accruals and through land sale. However, once the Nagpur airport is taken over by the MADC, the work for building the cargo hub and other buildings will begin needing the MADC to consider other sources for raising funds.