Top firms in fray for Pithampur SEZ stake

Move to speed up development in the Rs 3,674 cr SEZ

To speed up development in the Rs 3,674-crore special economic zone (SEZ) in Pithampur near Indore through a private partner (this is India's first SEZ), the MP government has decided to dilute its stake in the SEZ, being developed on 1,038 hectares.

An empowered committee has been formed with the chief secretary of the state as chairman.

The principal secretaries of the industries and finance departments and the managing director of the Madhya Pradesh State Industrial Development Corporation will be the other members of the committee, which will decide on the strategic partner and amendments to rules related to the development of the SEZ.

The process was started almost a year ago and land areas in the first phase of the SEZ have been allotted to various companies. Of them, SRF Ltd and Flexituff have started operations.

"We will dilute our stake to 26 per cent so that the company can function in a planned manner and develop sectors in the SEZ. The firm will remain our partner for nine years. However, the partner will not have any right to decide power tariffs in the SEZ," Industry Minister Kailash Chawla told Business Standard, adding "Our consultant, Tata Economic Consultancy Services (TECS), Mumbai, has finalised seven out of nine contenders for the SEZ."

TECS has finalised Gammon India, Wartsila India, Zoom Developers, L&T, Punj Lloyd, Tata Housing, and Anik Developers. The manufactures operating in the SEZ say they are facing a shortage of rakes, direct connectivity to Ratlam, international air cargo facilities at Indore, and high power tariffs.

A few months ago, SRF Chairman Arun Bharat Ram, whose group has set up a unit in the SEZ, told this newspaper inordinate delay in privatising the SEZ would hamper the process of investment in the zone.

Experts have also warned about the proposed higher-and-fire policy, cleared by the previous Congress government, in the SEZ.

"Babulal Gaur, who always advocates the cause of labour, will not allow the policy and much hinges upon the state government's rules and regulations," an expert told Business Standard.

Gaur had said the companies investing in the state would have to abide by the "labour-friendly" laws.

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A run for SEZ

• The state government will dilute its stake to 26 per cent so that the company can function in a planned manner and develop sectors in the SEZ
• An empowered committee will decide on the strategic partner and amendments to rules related to the development of the SEZ
• Consultant TECS has finalised Gammon India, Wartsila India, Zoom Developers, L&T, Punj Lloyd, Tata Housing, and Anik Developers as the main contenders
• Manufactures, who have already started operations in the SEZ say they are facing a shortage of rakes and high power tariffs.