JNPT opts out of Navi Mumbai SEZ project

JNPT refuses to part with 300 hectares of land for the project

The much-hyped and ambitious Navi Mumbai Special Economic Zone (SEZ), which is to be developed by the Seaking Infrastructure Ltd (SIL) and development agency CIDCO, a Maharashtra government enterprise, has now faced with a major blow even before the project could achieve its financial closure.

The Jawaharlal Nehru Port Trust (JNPT) has turned down the CIDCO-SIL consortium's request for 300 hectares of land to add to the project, planned to be spread over 2,460 hectares, near the Jawaharlal Nehru Port.

Meanwhile, a top official of Nikhil Gandhi-promoted SIL, told Business Standard on Monday that construction for infrastructure facilities in the SEZ will commence from January next year, with financial closure to be achieved by 2004 end.

"As we require land for development of our forthcoming container terminal project, we have turned down CIDCO's plea for 300 hectares of land for the Navi Mumbai SEZ project. We are, at present, working on conversion of our existing bulk cargo terminal to container terminal which will be the third container terminal of JNPT and we also recently have decided to go for a fourth container terminal as the port has been witnessing steadily increasing container traffic," Ravi B Budhiraja, chairman, JNPT told Business Standard, reacting to the recent developments.

With this development, now the Navi Mumbai SEZ project will be smaller in size. In the first phase, 450 hectares of land will be developed at an estimated cost of around Rs 1,500 crore. Second phase of the SEZ, which according to earlier plan was to be spread over 2,050 hectares, now will have only 1,750 hectares.

While Nikhil Gandhi, chairman of SIL, was not available for comments on the development, a top company official requesting anonymity, said, "The decision of JNPT is not going to affect the project much as CIDCO has enough land and we hope to start construction for the first phase in January 2005, despite this development."

CIDCO which floated a global tender for the project last year, earlier awarded 74 per cent stake to a consortium of developers and builders for the first phase estimated to cost Rs 1,500 crore.

SIL, will be holding 52 per cent stake in the SEZ project, Mumbai-based Hiranandani Contractors Pvt Ltd, will be holding six per cent stake and Avinash Bhoshale Infrastructure Pvt Ltd will be having 16 per cent stake, while CIDCO has retained 26 per cent.

"We understand that JNPT has decided to back out from the project and is not in a position to give us the required 300 hectares of land. However, we have already allocated 450 hectare to the consortium of builders to develop the first phase of the project, which is expected to be completed in the next three years," said C S Sanghvi, general manager, CIDCO.

Sanghvi also said that CIDCO would sign the lease agreements with the consortium of builders including SIL for a period of 60 years. It may be added here that earlier Nikhil Gandhi-promoted Gujarat Positra Port Infrastructure Ltd (GPPIL), which was working with Gujarat government for developing a SEZ at Positra near Dwarka in Jamnagar district, withdrew itself from the project which never took off and moved to Maharashtra where it has now entered into two major SEZ projects, Navi Mumbai SEZ and Maha Mumbai SEZ.

During the last month, both the projects were bound together under a single entity, Mumbai Integrated SEZ (MISEZ) project.