APSEZ has no takers despite hard sell

Despite extending the deadline for the third time in a row for submitting bids for the special economic zone (APSEZ), an ambitious project by the state government near Visakhapatnam, has found no takers.

In spite of conducting road shows in India and abroad for prospective investors, the government drew a blank, as not a single developer turned up to submit bids on Wednesday, the last date.

Sources in Andhra Pradesh Industrial Infrastructure Corporation (APIIC), the nodal agency for APSEZ, said the proposed Navimumbai SEZ in Mahararashtra, for which November 14 was the last date for receiving bids, played the spoilsport, along with other factors.

APIIC is now said to be in serious introspection on the need to restructure the whole project. A detailed proposal may at least take 4-5 weeks to prepare. It has proposed to develop the zone in 3,680 hectares in Atchutapuram, and Rambilli mandals near Visakhapatnam.

The first phase involves development in 1400 hectares. "In the given situation we are left with no other option but to restructure the entire project, that should include downsizing the project, revising the incentive package besides other things," the sources disclosed. APIIC is likely to submit a fresh proposal to the state government next week.

L V Subrahmanyam, the vice-chairman and managing director of APIIC, along with senior officials, personally interacted with the eight prospective bidders in Mumbai who were already preoccupied with the Navimumbai and other major projects in Maharashtra and elsewhere in the country.

They include TCG group, Videocon International, Srei International, Wartsila, Gammon India, L&T and GMR. Though APIIC originally decided to fix August 15 as the last date for receiving bids, the management extended the deadline to September 15 and later to November 30, and finally to December 10.

In the Rs 2,200 crore project, to be taken up in the public-private partner ship format, the strategic private partner will have to invest two-thirds of the total cost i.e., a whopping Rs 1,580 crore. The AP government will spend on its part Rs 777 crore. The land cost alone is estimated at around Rs 110 crore.

The central government's policy of sanctioning too many SEZs in one go has also proved to be a major obstacle for the second-rung places like APSEZ to take off. SEZs at Navimumbai, Mahamumbai, Bangalore and other places with well-developed infrastructure have a natural advantage over the former.

A major complaint of the prospective bidders is said to be the promotion of separate parks for each sector in Andhra Pradesh and elsewhere. "With so many parks coming up separately, who will fill the SEZs is the persistent question they pose," a senior official in the industries department pointed out.