The Hindu : National : Maharashtra government backs Videocon project

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Sunday, Aug 10, 2008
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National

Maharashtra government backs Videocon project

Special Correspondent

MUMBAI: The Maharashtra government has strongly backed the Videocon Industries project, which is being opposed by the Revenue Minister Narayan Rane, who has since resigned from the cabinet. Though the Videocon Industries has got offers from other States to locate the project, it is keen to locate this first of its kind unit in Maharashtra, and is confident of prevailing over any criticism.

The government in a statement claimed that it had in the past already lost four key projects with investment totalling over Rs. 6,000 crore over land issues. This includes a Rs. 4,374-crore project by the Hero Daimler and projects by the Nokia and the Honda Motors. The Videocon proposes to set up a cutting edge technology Thin Film Transistor Liquid Crystal Display (TFT LCD) project in Navi Mumbai with an investment of Rs. 8,000 crore. There are only three projects in the world in Korea, Taiwan and Japan. The demand potential for LCD units could be huge and by 2010, it is likely to grow to 100 million pieces. About 50 per cent of the product is to be exported.

While Mr. Rane scoffed at the employment potential, the government said that the project would generate large scale employment of the order of 10,000 skilled man power, mostly from the scientific and technical community. While Rs. 4,000 crore will be debt, the equity of the rest of the amount is as follows: the project will get a government grant of Rs. 2, 000 crores under its semi-conductor policy. City and Industrial Development Corporation (CIDCO), the project partner, will have a share of 26 per cent or Rs. 260 crore and the Videocon will have a share of 34 per cent or Rs. 340 crore.

There will be 40 per cent public participation worth Rs. 1,400 crore. Mr. Rane has slammed the government for allotting the land cheaply and not auctioning it. According to him the land was worth Rs. 3,000 crore. The government says this was untrue. There is no undervaluation of the land and no major concessions are being offered to the company. More importantly, the valuation calculated by the CIDCO is around Rs. 792 crore. The land proposed to be given to the joint sector project with the Videocon is at the rate of Rs. 300 lakh per hectare.

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