First phase of MSEZ set for commissioning by 2011 or early 2012
by Gabriel Vaz
Daijiworld Media Network
Bangalore, Jun 5: Amid the hype, hoopla and glitter of the just concluded Global Investors’ Meet held at the Bangalore Palace Grounds, which proved a huge success for the B S Yeddyrappa regime, was a stall from coastal Mangalore that drew curious visitors, including the chief minister, ministers and other top dignitaries.
A stall at GIM from the coastal region, which drew a virtual blank in the unprecedented Rs 4 lakh core investment proposals received by the Yeddyurappa regime? Yes, the stall was from the Mangalore SEZ (special economic zone) Ltd. And, for a change, there were no protests or even uncomfortable questions regarding land acquisition that must have become a rather routine affair for the MSEZ executives.
MSEZ, the special purpose vehicle incorporated in February 2006 with Oil & Natural Gas Corporation (ONGC), Karnataka Industrial Area Development Board (KIADB), Infrastructure Leasing & Financial Services (IL&FS), Kanara Chambers of Commerce & Industry (KCCI) and others as the promoters, is aimed at developing multi-product enterprises.
"The first phase notified in 2007 for sector-specific petroleum and petrochemical investments is well on its way of implementation,” MSEZ Executive Director and Chief Operating Officer A G Pai told Daijiworld on the sidelines of GIM. ``There is absolutely no problem with regard to land or any other issues. If everything goes as per schedule, the first phase should be commissioned by the end of 2011 or early 2012,” he said.
"Marketing for the first phase was quite comfortable,” he said explaining that as much as 1,453 acres were contiguous and ideally suitable out of the 1,600 acres of land acquired. Except 500 acres, the entire land in the phase one project has been already allotted.
"The comprehensive rehabilitation works that we undertook in 300 acres of land have won us many admirers and appreciation,” he says.
Pai explained that the average land cost per acre worked out to Rs 30 lakh per acre with the rate of compensation ranging from Rs 8 to 8.5 lakh per acre. The rate of compensation, according to Pai, in the second phase for the 2,000 acres proposed was even higher at Rs 11.5 to Rs 12 lakh per acre of dry and wet categories. ``We don’t anticipate any problems as farmers have voluntarily come forward to offer their lands due to the attractive prices and rehabilitation package,” he explained.
The total cost of the entire phase one would be around Rs 35,000 to Rs 37,000 crore.
Prominent projects coming up in the first phase include ONGC’s Aromatic Complex at an estimated investment of Rs 6,000 crore in 442 acres, Indian Strategic Petroleum Reserves Ltd (ISPRL) in collaboration with a South Korean company, SKEC, for storing crude in rocky cavern conditions at a cost of Rs 1,000 crore in 82 acres and Mangalore Refineries and Petrochemicals Ltd (MRPL), a subsidiary of ONGC, expansion project in 300 acres at a cost of Rs 15,500 crore from the present 12 to 15 million metric tonnes per annum (mmtpa).
While construction work on the Aromatic Complex is underway and the project is set for commissioning in 2012, the ISPRL is expected to be ready for operations by 2013. The MRPL expansion work will begin commercial operations by the end of next year, Pai said.
Excellent connectivity to domestic and international markets with linkages to three national highways and access to a large network of state highways in the hinterland, an international airport barely within 5 kms distances with air connectivity to Indian and Gulf countries, railway accessibility to Southern Railway within 20 kms with Konkan Railway running adjacent and the all-weather New Mangalore Port hardly 8 kms away connected to a dedicated pipeline-cum-road corridor are the strong features of MSEZ, which are not available in any other SEZ, claims Pai.
The evaluation work on product-specific companies for phase two of MSEZ was presently underway. ``We expect to finalise the entire process in the next three months,” he said disclosing that as many as 75 to 80 companies have already evinced interest.
Petrochemicals, Apparels Silk and Synthetic Yarn Based Apparels, Engineering Industry, Food Processing, Drugs and Pharmaceuticals, IT/ITES Software Park, Gems & Jewllery, R & D, Biotech, Financial Services, Logistics and Warehousing were among the many sectors that have tremendous scope in MSEZ, explained Ramachanra Bhandarkar K, public relations officer, pointing out that logistical cost advantage of MSEZ made it more economically viable proposition over major competitors in Gulf and Gujarat to reach the far-east Asian markets.