The Hindu : Tamil Nadu News : Nanguneri SEZ set to take off: MoU signed

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Tamil Nadu

Tamil Nadu

Nanguneri SEZ set to take off: MoU signed

R.K. Radhakrishnan

State government’s new developer-partner will have a controlling stake of 68 per cent

— Photo: M. Vedhan

KEEN INTEREST: S. Ramasundaram, Chairman and Managing Director, TIDCO (right), showing Chief Minister M. Karunanidhi a sketch of the Nanguneri site, at the Secretariat in Chennai on Thursday. From left are A. Mahesh Reddy, Managing Director, AMR Constructions, and S. Senthil Kumar, General Manager, TIDCO.

CHENNAI: A new developer on Thursday signed a Memorandum of Understanding on the Nanguneri Special Economic Zone (SEZ) with the State government in the presence of Chief Minister M. Karunanidhi, giving rise to hope that the project will take off this time around.

The new partner, A.M. Reddy of the AMR Group, will have a controlling stake of 68 per cent while the existing partner, California-based INFAC Management Corporation, which floated the Advanced Technology Manufacturing and Assembly City for the Nanguneri SEZ, will have 31 per cent.

The facilitator, the Tamil Nadu Industrial Development Corporation (TIDCO), will hold 1 per cent stake in the SEZ where about Rs.14,000 crore investment is expected to be pumped in.

Financial closure

“Financial closure was achieved last week. We are well on track this time,” said S. Ramasundaram, Chairman and Managing Director, TIDCO.

When it was first taken up in 2001, Nanguneri, near Tirunelveli, was the first SEZ in the country. A dream-project of Mr. Karunanidhi’s nephew and the late Union Minister Murasoli Maran, the project remained a non-starter because successive investors backed out or were unable to begin work because of the huge investment required and a variety of other factors.

The concern that the SEZ had not taken off echoed in Mr. Karunanidhi’s words on Thursday as he sat through a presentation of the project yet again. When he was shown the location map, he reportedly asked: “I know where Nanguneri is. When will it start?”

Mr. Karunanidhi had laid the foundation for the project in February 2001. Formal approval from the Union Government came in May 2001.

The government in Tamil Nadu changed that month in 2001 and there was no talk about the project for the next five years.

After the DMK came to power again, it began work on the project afresh.

Initial problems

The initial problems in Nanguneri related to land acquisition.

When Maran thought of the scheme, about 1,500 acres were acquired as there was no clear-cut SEZ policy then and hence, no rule on the amount of land required.

Another 1,000 acres had to be acquired to meet the current SEZ requirements. As of now land procurement (2,600 acres) is complete.

Initially, after the DMK government came to power, it had announced that the SEZ would be based on the industry-specific cluster model and seven broad products were identified.

But this has been abandoned and now, it will be a multi-product SEZ.

The SEZ will have light manufacturing, design and assembly facilities, modern infrastructure facilities and extensive amenities to employ about 70,000 persons directly.

Final notification

The final notification from the Union government is expected to come on May 2. Marketing of the SEZ effectively began on Thursday after the signing of the MoU, officials said.

Development cost

Development work at the site will be taken up soon and this would facilitate the first industrial units to set up shop at an early date, they said.

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