The decision of the Union Commerce Ministry’s Board of Approval (BoA) on Special Economic Zone (SEZ) to notify the entire 246 acres of the proposed SmartCity Kochi project as a single SEZ has removed the single biggest hurdle in the execution of the project making any further delay unpardonable.
The project, the foundation stone for which was laid in 2007, is already way behind schedule. The BoA had in March 2011 notified 131 acres of the project site as SEZ while denying single SEZ status for the entire area citing a water body that separated the remaining 115 acres.
“The latest BoA decision is a game changer, which was made possible by the sheer persistence of the promoters of the project and the State government who continuously pursued the case for single SEZ. We have given a commitment to construct a bridge linking the two plots on either side of the water body within 18 months,” said Baju George, managing director, SmartCity (India).
A favourable decision was secured eventually after it was pointed out to the BoA that demands for single SEZ were granted to projects in Kakinada and Hyderabad in Andhra Pradesh despite being separated by a creek and a National Highway respectively.
Single SEZ will facilitate an integrated township development through seamless social infrastructure that facilitates better efficiency, utility, and offers the advantage of large scale operations, Mr. George said. In the absence of a favourable decision, the project might have been reduced to two smaller SEZs depriving all such advantages.
“Now we can plan big. SmartCity is not aiming to attract individual companies, as their arrival is guaranteed once the project gets executed as planned. Our primary target is to attract knowledge workers and creating an ideal social infrastructure and environment is the best bet to achieve that,” said Mr. George.
More importantly, single SEZ means minimal changes in the concept master plan that was drawn up in the assumption that a single SEZ would be granted. If that was not the case, then the entire master plan would have to be re-worked causing further delay. Besides, 14 acres of isolated plot alongside the water body, where the promoters plan to construct the main entry to the knowledge city, would never had received SEZ, as the prevailing norms do not consider plots less than 25 acres for SEZ, Mr. George said.
The promoters now plan to launch construction at multiple sites within the next six months, a timeframe agreed to at the director board meeting held in Dubai last week. The promoters will construct 3.5 lakh sq.ft of office space and 1.5 lakh sq.ft. of parking space on their own in the first phase besides developing infrastructure on 50 acres.
“Once the master plan is finalized, we will approach co-developers to get them launch the construction works alongside us,” Mr. George said.
The State government and the Dubai-based promoters of the project had not been on the same page about the launch of construction work till before the BoA ceded to the demand for a single SEZ.
While the government wanted construction to get underway in the area already notified as SEZ, the promoters hung on to the reasoning that isolated construction work without the assurance of a single SEZ will defeat the very concept of the project.
A high level meeting of the Union commerce and revenue departments on January 8 followed by a visit of the officials concerned to inspect the site two days later cleared the deck for the eventual decision of the BoA granting single SEZ.
Though the Union Commerce Ministry was in favour of granting a single SEZ, the revenue department opposed it repeatedly compelling Chief Minister Oommen Chandy to take up the matter with Union Finance Minister P. Chidambaram.
