Indore SEZ still awaits privatisation

The slow pace of privatisation of India's first operational special economic zone (SEZ) is unlikely to pick up. The state government will take more time to dilute its stake in SEZ Indore Ltd.

The process may take another six months. Disinvestment in the entity was planned in 2005 to speed up the process on facilities, finances and sector-wise development in Rs 3,674 crore SEZ through a private partner.

"The first stage has been completed, and the process for the second phase will begin soon," a highly-placed government source told BS.

Reliance, DLF, and Essel World have figured among the first nine contenders short listed for qualifying round. "The pre-bid conference will take place during the last month of July," said the source.

An empowerment committee was formed under the chairmanship of chief secretary of the state during 2005 while the process had initiated in 2004 itself. Land areas in the first phase of SEZ had been allotted to as many as 31 companies. Of them, two, namely SRF Ltd and Flexituff, had started operations.

At present the state government has plans to dilute its stake to 26 per cent so that the private partner can function in a planned manner. The company will remain government partner for nine years.

"Government will see if it can dilute the stake further or can take a role of share holder partner," the source said adding, "Reserve price or floor price will also be fixed soon. But privatisation may take another six month and will be completed by December."

Earlier, Tata Economic Consultancy Services (TECS), Mumbai, had finalised seven out of nine contenders for SEZ Indore Ltd. But the government failed to initiate next round of short listing the partner.

TECS had short listed Gammon India, Wartsila India, Zoom Developers, L&T, Punj Lloyod, Tata Housing and Anik Developers. But the government dropped the process mid-way. High power tariff, shortage of rail racks and direct connectivity to various airports still haunt the SEZ.

The first phase of the SEZ is being developed on 1038 hectares.

The second phase is yet to be developed.