Cidco makes land transfer contingent on central subsidy.
Videocon Industries’ Rs 8,000-crore thin film transistor liquid crystal display (TFT-LCD) panel project in Navi Mumbai has hit a block. The state-run City & Industrial Development Corporation (Cidco) has taken a decision not to hand over 100 hectares for the project to Videocon till the latter gets a subsidy of Rs 2,000 crore from the central government, plus necessary approvals.
The subsidy was supposed to be coming under a policy to encourage the semi-conductor sector. The money was factored into the project approval decision. It was to be implemented through a joint venture company in which Videocon would have 34 per cent equity, with 26 per cent to be held by Cidco. The latter’s board of directors met on September 27 and had approved formation of the JVC.
A Cidco official, who did not want to be named, told Business Standard: “The project was cleared by the Maharashtra cabinet in August 2008 and since then, three extensions were granted to the company to complete necessary formalities like acquisition of land , signing of joint venture agreement and shareholding pact with Cidco . A third extension ended on September 30 but the company has not made any substantial progress. The project had received the first extension till December 31, 2009. The state government granted the second extension till June 2010 on the same ground.”
Videocon Industries’ sources declined to comment.
The Cidco official said it would get Rs 300 crore from the sale of 100 hectares of land for the project to Videocon. Of this, it would make payment of Rs 260 crore towards its equity. Videocon’s contribution towards its 34 per cent equity would be Rs 340 crore.
