ISPAT - SEZ

SEQUENCE OF PRESENTATION

General. Organogram, Manpower induction & Recruitment status. SEZ Utilities. Legal / Government issues / Permissions. Various Consultants, Funds / Budget, Visits / Meetings.

 Vision & Overview.      SEZ Land.

 Impending Activities, Immediate Decisions & Way Forward.

GENERAL

FUNDAMENTALS OF SEZs
– SEZs (special economic zones) are fundamentally different from the traditional free zones. – They are much larger in size; offer broader range of activities such as:
a single-window management. streamlined procedures. duty-free privileges. also access to the domestic market on a duty-paid basis.

– The revised Kyoto Convention of the World Customs Organisation defines free zone as “outside the customs territory”. Cont….

FUNDAMENTALS OF SEZs
Whether the enclave is termed an EPZ, FTZ or SEZ, the cardinal factor is the provision of :

– Appropriate infrastructure and transport facilities. – Low factor cost. – Flexible labour laws. – Low degree of tariff protection. – Convertibility of currency. – Stable legal and administrative regime – A commitment to the canons of an open economy Cont….

FUNDAMENTALS OF SEZs
Look at Chinese SEZ-Shenzhen SEZ
– Total Area of Shenzhen – 1,952.84 sq. kms – Area of SEZ - 395.81 square kilometers – Harbouring 3.5 million people – $30 billion in FDI – 3 million employment – Equipped with the state-of-the-art infrastructure – Effective port facilities, – Simplified procedures, – Fully flexible labour policy in terms of hiring and firing.

FUNDAMENTALS OF SEZs
Look at Jebel Ali Free Trade Zone in Dubai

– Area - 100 sq km – Home to over 1,600 companies from 85 countries – Triggered the economy and development of Dubai

INDIAN SEZs- AREA REQUIREMENT
Total Land in India Total Agri Land in India 2973190 sq km 1620388 sq km (54.5%)

Total SEZ area would not be more than 0.112% of Agri Land. Let us have a look at Area requirements of SEZs
SEZs Formally approved and notified [FA] In-principal approvals [IP] Total Area for proposed SEZs (FA+IP) Area requirement [approx] 623 sq km
1218 sq km 1841 sq km

FACTS ON INDIAN SEZs
Investment made in notified SEZs Employment created in notified SEZs Employment in 7 SEZs established by the Central Government Rs. 67347 Crores (as of 31.12.07) 61015 persons (Direct Employment generated after February 2006) (as of 31.12.07) 1, 83, 354 persons (as on 31.12.2007)

Cont….

FACTS ON INDIAN SEZ
Exports from the functioning SEZs during the last three years are as under:
Year 2003-2004 2004-2005 2005-2006 2006-2007 Exports (Rs. crores) 13,854 18,314 22,840 34615 Growth Rate of exports 39% 32% 24.71% 52%

Exports effected during April-December 2007) Rs. 40000 Crores (Provisional)

Cont….

FACTS ON INDIAN SEZ
Export projection for 2007-08

Export projection for 2008-09

Rs. 67088 Crores (200% increase in 2 Years) Rs. 1, 24, 683 Crore

Source: www.sezindia.nic.in

SEZ ACT, 2005
Passed by Parliament in May 2005 Received Presidential assent on 23rd June 05 Came into effect on 10th Feb 06 supported by the SEZ Rules

Cont….

SEZ ACT, 2005
The SEZ Act 2005 envisages key role for the State Governments in Export Promotion and creation of related infrastructure. A Single Window SEZ approval mechanism has been provided through a 19 member inter-ministerial SEZ Board of Approval (BoA). The applications duly recommended by the respective State Governments are considered by this BoA periodically. All decisions of the Board of approvals are with consensus.

IMPORTANT SECTIONS OF SEZ ACT 2005
SEZ ACT, 2005 contains
– Eight Chapters – 58 Section – Three schedules

SEZ RULES, 2006
– The SEZ Rules provide for different minimum land requirement for different class of SEZs. – Every SEZ is divided into a processing area where alone the SEZ units would come up and the non-processing area where the supporting infrastructure is to be created.

Cont….

SEZ RULES, 2006
The SEZ Rules provide for :
– Simplified procedures for development, operation, and maintenance of the Special Economic Zones and for setting up units and conducting business in SEZs; – Single window clearance for setting up of an SEZ; – Single window clearance for setting up a unit in a Special Economic Zone; – Single Window clearance on matters relating to Central as well as State Governments; – Simplified compliance procedures and documentation with an emphasis on self certification

CHAPTER I-PRELIMINARY
 “Special Economic Zone for multi-product” means a Special Economic Zone where Units may be set up for manufacture of two or more goods in a sector or goods falling in two or more sectors or for trading and warehousing or rendering of two or more services in a sector or rendering of services falling in two or more sectors;

 “Special Economic Zone for specific sector” means a Special Economic Zone meant exclusively for one or more products in a sector or one or more services in a sector;

DEVELOPER’S PERSPECIVE

RISK ELEMENTS
Long gestation period - 5-7 years. Relatively high investment towards land acquisition, infrastructure and facilities building, High uncertainty about enough occupation of the Zone by entrepreneurs.

REVENUE CONSIDERATIONS
For the Developer, a SEZ is basically a profitcentre Project. Return of his initial capital investment, has to come from the lease of plots and buildings in the SEZ. He must also get extra returns matching the very high stake, long gestation period and the risk involved in the Project.

PROCEDURE FOR SETTING UP OF SEZ
Step-1 After identifying the area proposal can be made to

1. State Government [St. Govt.]
On receipt of the proposal 1. St. Govt. should ensure whether all requirements as per Rule 5 are being complied with or not 2. After that it forwards the proposal, with its recommendations, to the BOA, within 45 days.

2. Directly to the Board of Approval [BOA]
Proposal can be made to Board of Approval, after approval by the Board concurrence of the State Government to be acquired within 6 months

Contd…..

Step-2 BOA may approve, modify or reject the proposal as under:

If APPROVED BOA will communicate such approval to the Central Govt.

If MODIFIED 1. BOA will communicate such modifications to the applicant 2. If modifications are accepted by the applicant, the BOA shall communicate approval of proposal to the Central Govt.

If REJECTED BOA will record the reasons of rejection and communicate to the Central Govt. Central Govt. will communicate to the applicant

Contd…..

Step-3 Central Govt. after receiving communication from BOA, shall grant the Letter of Approval [LOA] within 30 days of the Communication received from BOA as under.

Formal Approval in FORM-B In the cases where the land is in the possession of the Developer. [validity – 3 yrs for implementation of Proposal Extension- 2 yrs]

Formal Approval in FORM-C For providing infrastructural facilities in the SEZ. [validity – 3 yrs for implementation of Proposal Extension- 2 yrs]

In-principle approval in FORM-B1 [validity – 1 yr –within Which Developer shall submit suitable proposal for formal approval in Form-A Extension- 2 yrs]
Cont….

Step-4 The Developer has to furnish to the Central Government, the particulars of the identified area, with proof of legal right and possession and a certificate from the State Government or the authorized agency that the said area is free from all encumbrances. Where the Developer has leasehold right over the identified area, the lease shall be for a period not less than twenty years. The identified area shall be contiguous and vacant and it shall have no public thoroughfare.

Cont….

Step-5 Notification of SEZ by Central Govt.: Central Govt. after satisfying that all the requirements are fulfilled, shall notify the identified area in the state as a SEZ

Step-6 Grant of approval for Authorised Operations: The Developer can submit to the Board the details of operations proposed to be undertaken in the SEZ for obtaining authorization at the time of seeking approval for setting up of SEZ or thereafter. Board may authorize the Developer to undertake such Operations in SEZ, as may be authorised by Central Govt.

NOTIFICATION No. S.O.1846 (E) Dtd. 27.10.2006
Authorized Operations for following category of SEZs have been issued:

(A)Information Technology/Information Technology Enabled Services, Bio-technology and Gems and Jewellery Special Economic Zone: (C)Sector Specific Special Economic Zones (E)Multi Product Special Economic Zones
This list would be used by the Board of Approval for authorizing operations to be undertaken in a Special Economic Zone which alone would qualify for exemptions, concessions and drawback. COPY OF THE NOTIFICATION CAN BE OBTAINED FROM www.sezindia.nic.in

ARE TAX INCENTIVES REAL DRIVERS?

ARE TAX INCENTIVES REAL DRIVERS?
B) Indirect Taxes
Basic Customs Duty (BCD) Additional duties of Custom Education Cess Special CVD VAT Service tax with Education Cess Octroi / Entry Tax 10% 16% 3% 4% 12.5% 12.36% 1 % to 4 %

Out of this, the real incidence would be that of BCD plus Octroi, since all other taxes are vatable or adjustable for the domestic player too. The exemption in terms of Indirect taxes is presently at 10% for the SEZ or SEZ Unit. Contd ….

ARE TAX INCENTIVES REAL DRIVERS?
By the time most of the SEZs become operational, the average duty would be between 5% to 7% for most of the inputs. When Chinese SEZs were set up, the duty differences were too high and therefore SEZs enjoyed substantial exemptions thereby reducing the cost of production coupled with direct tax concessions.

ARE TAX INCENTIVES REAL DRIVERS?
B) If Direct tax concessions are considered objectionable by
WTO, it would lead to erosion of competitiveness of SEZs. C) Department of Revenue is already questioning about the duty foregone amount which they expect to be around Rs.90,000 crore plus. Hence any subsequent changes in the SEZ policy (if introduced) with regards to tax concessions will create serious problem for the entrepreneurs. D) Due to high incidence of taxes prevailing in the country, we get lured to the idea of total tax exemption. Whether such thinking would lead to successful business in a highly competitive world needs to be examined by each individual player.

SWOT ANALYSIS FOR INDIAN SEZ

SWOT ANALYSIS FOR INDIAN SEZ
Strengths:
– Skilled Manpower – knows English – Worldwide acceptance of capabilities in fields like
Pharmaceutical manufacturing & research Clinical trials Manufacturing auto parts Engineering designing & consultancy, IT & ITES Entertainment etc etc

– Financial & other institutional Networks like Stock Exchanges, Insurance Companies, Educational Institutes etc. – Attraction of a large ‘Indian’ market:
growing middle class with purchase power on a continued basis for next two decades. reducing duties year after year,

SWOT ANALYSIS FOR INDIAN SEZ
Weakness:
– Infrastructure bottlenecks – serious ones, particularly connecting infrastructure like Roads leading to SEZs. – Political changes – Convertibility of Currency on Capital A/c – Red Tape – Labour reforms – Zones by & large are still zones not smart cities. – Inappropriate locations – Time frame for long gestation period minimum 4 to 5 years from now in absence of infrastructure development.

SWOT ANALYSIS FOR INDIAN SEZ
Opportunities:
– An alternative manufacturing base, particularly compared to Chinese SEZs. – Services SEZs do not require movement of input and output physically and hence, surrounding infrastructure may not matter much. – Economic development continues inspite of political changes. – For multi-product SEZs, almost 23 ports are available. Most of them are likely to be EDI compliant. – New small ports are also being developed keeping SEZ concept in mind.

SWOT ANALYSIS FOR INDIAN SEZ
Threats:
– No more low labour costs - many countries are competing. – Technology Transfer can make any country competitive. – Formation of economic blocks & possibility of Intra trade. – Negotiations for FTAs with many countries may erode competitiveness. – The pattern of buying & selling may not continue. With relocations of industries in other third world countries, new competitors will emerge. – Serious problems at WTO - if incentives (Tax incentives) are considered as countervailable, then exports will get affected.

ISPAT SEZ - VISION & OVERVIEW

ISPAT SEZ
VISION “ To create a Globally Competitive Business Environment in the State of Maharashtra with World-class Infrastructure which serves as an Economic Hub catering to Global and Domestic Markets.”

STRATEGIC LOCATION
Existing Trans-harbour link Navi-Mumbai Mumbai Proposed Trans-harbour link Proposed Int’l Airport JNPT Port

Proposed Navi Mumbai SEZ Proposed Maha Mumbai SEZ Proposed Uran – Rewas Bridge Proposed Rewas Port SEZ Our SEZ Project

SCOPE OF PROJECT
Horizontal Development (by Project SPV/s)
• • Site Development Connectivity / Utilities

Vertical Development (by 3rd parties or Co-Development)
• Built-up Premises for
• Industrial • Commercial • Residential • • • • •

Roads Water Drainage Sewerage Treatment Waste Management

Social Infrastructure

Utilities (by Affiliates)
• • • • Power Generation and Distribution Telecom Gas distribution Water Supply

Entertainment Hospitals Hotels Education Sports & Recreation

Management of Township / Real Estate & Shared Services (by Affiliates)

SEZ –USPs
Better work culture, good education, leadership vision A competitive manufacturing region Region has export orientation High caliber, low cost technical staff World class living / residential accommodations Educational and Health Parks Tourism, Leisure, Entertainment and Recreation International Financial Service Center with Offshore Banking Units Access to International Airport and Seaport Industrial & Service Parks – Biotech & Pharma, Textiles & Apparels, IT, Agro & Food Processing, Gem & Jewellery, IT & Communication etc.

IMPACT OF SEZ ON STATE OF MAHARASHTRA
Industrial progress
• SEZs alone to create employment opportunities for over 25 lakh people over a period of 10 years. • Larger flow of investments including FDI to the tune of Rs. 250,000 Crs (= USD 50 Bn.) • Consolidate Mumbai’s leadership as the commercial & financial hub of the country. • Maintain leadership in core sectors including Engineering, IT, Auto, Pharma, Biotech, Textiles & Apparel etc.

Infrastructure
• Positioning as the “Transit Hub” in the Asia – Pacific belt. • Development of connectivity infrastructure enhancing linkages to hinterland, regional and international destinations. • Decongestion of the “Infrastructure Strain” on Mumbai • Emergence of a city with world-class Utility, Social & Recreational Infrastructure.

STATE – OF – THE ART INFRASTRUCTURE
Units within the SEZ would have access to world class infrastructure and services. Units can choose between land plots, flatted factories and built-up office space. These facilities would be ready-to-use with all basic infrastructure and services in place. Other infrastructure in terms of convention centers, recreational facilities and social amenities are also proposed. Well-connected road and rail linkages - National Highways (NH3, 4, 8, 9 & 17) link the area to the rest of the country. This SEZ project is proposed to be executed through a Special Purpose Vehicle (SPV).

SEZ OPPORTUNITY
Marketing of the Zone - Opportunity to undertake marketing activities for the entire zone. - Undertake marketing & selling of zone components, the parks etc. EPC - Opportunity to undertake EPC contracts worth US$ 600 million for entire component or for part of the component Utilities - Take up the entire work on a specific component. Eg. Power: [Generation, transmission and distribution, Fix tariff and collect direct revenue from the customers] Multi Modal Connectivities Zone Management - Administration of the entire SEZ - Operation and Maintenance of zone assets - Take up the entire work on a specific component

REVENUE MODEL FOR THE SEZ
The SEZ will be developed in phases, with each phase comprising development of a specified percentage of industrial, port, commercial and residential zones as well as support infrastructure. It is proposed that on development:

– industrial and institutional zones ( including a port zone ) will be leased to clients under a long-term lease with an upfront lease premium; – commercial plots and ready-built infrastructure will be leased on a monthly rental computed at a fixed rate per sq ft of the area leased; and – residential development will be leased in accordance with the SEZ Act, 2005.
The SEZ would earn facility management fee for entire SEZ infrastructure, engineering and other the SEZ. The fee would be based on prevailing the Central SEZ, Act or policies framed by Maharashtra in this regard. managing and operating the maintenance services within market practices and as per the State Government of

In addition to the revenue generation from development and lease/ sale of the SEZ, it is estimated that the activities within the SEZ will generate an export turnover to the tune of USD 1-1.25 billion over a period of five years once it is fully operational.

TOTAL PROJECT COST
As per the preliminary report, total cost for development of the SEZ is anticipated to be approximately Rs 5,200 crores Significant capital would be invested towards development of the external infrastructure of the SEZ in collaboration with the State Government of Maharashtra, including multimodal local transportation systems, rail linkages, etc.

Major cost heads Land cost Cost of development Cost for built up area Cost of project management Total

Approximate value (in Rs crores) 750 3300 800 350 5,200

PROJECTED VALUE
• 2,500 Acre project • SEZ approval • Currently about 15 multi-product SEZ approvals in India • 5 Multi-product SEZ approvals in Greater Mumbai, Maharashtra • Proposed investment of Rs. 1,960 Cr. on project development and infrastructure

Overall Project value will appreciate significantly upon development of surrounding infrastructure Land prices are expected to multiply several-fold in 35 year horizon e.g. Panvel land is selling from Rs. 50 lacs – Rs. 2 Cr. / acre depending on location

MANPOWER SEZ PROJECT

ISPAT SEZ ORGANISATION / STRUCTURE (STATUS)
Project Director (1)
 Basant.S Himalian.

Director (1) Secretary (1) GM (2) AM (2) Legal (1) Assistant (1) Sr. Officer (1) Consultant (1) Total : 1 + 9 
Cinderel la

Co-ordination (1)


Amarjyoti

Secretary (1)
HSE (1)

QA / QC

PP& C
MS LSN

ED (1)

UP (1)

Const.(2)

Land Acq. auditing / AQL (10)
Om Pawar Vijay Waikar Minaks hi

Security (2)

CA (2)

RR & SR

MM IL

  
Special Projects (2) Plants, Equipments & Machinery Utilities (2)
Alok Mahapa t Anupm Thakur

Commercial (2)

HR / IR (1)

Admin. (1)

Compliances & External Issues (1)

Procurement & Contract (2)

Legal

 

CC

MANPOWER INDUCTION – SEZ PROJECT
Sr. No. Dept. Number of persons required By March 2009 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. P.D.’s Sectt. QA / QC S.H.E PP & C E.D. U.P. Constn. Land. Security C.A. 3 1 1 1 1 2 10 1 2
………contd.

By Oct. ‘ 09

By March ‘ 10

By Oct’ 10

MANPOWER INDUCTION – SEZ PROJECT
Sr.No Dept. Number of persons required By March ‘ 09 By Oct.09 11. 12. 13. (a) (b) ( c) (d) 14. 15. 16. 17. 18. 19. M.M.I.L. Legal & Contract. Utilities Power TR & DR Water/Sewerage IT & Telecom P.M.E. Compliances & External Services Admin. HR / IR Commercial Special Projects TOTAL 1 1 1 2 1 32 2 2 By March ‘ 10 By Oct.’ 10

RECRUITMENT FOR SEZ PROJECT
Pooling of resources from various departments. Details in next slide. Persons already on Board: Project Director          Secretary GM Utilities GM Land Asst Manager Utilities Co – Ordination / Recruiter Legal Land Consultant Back Office Exec. PP & C : Maj. Gen. Basant S. Himalian : Ms. Cinderella D’ Silva : Lt. Col. Alok Mahapatra : Col Om Pawar : Anupam Thakur : Mr. Amarjyoti Singh Deo : Mr. Chandrakanth Chaudhri : Mr. Vijay V. Waiker : Ms. Minakshi Londhe : Mr. Lakshman Neigi

DIFFICULTIES FACED BY RIPL STAFF
Provision of swipe / Identity cards to all RIPL employees. Opening of Bank accounts & remittance of monthly salary direct to bankers. Lotus Notes facilities. Ispat E-mail ID to all RIPL employees. Provision of Employee Number. KM Portal and ESS facility be provided. Online PMS for year 2008 – 09. Direct telephone line for provision of fax machine. Printer, scanner & photocopier be installed. RIPL letterhead, visiting cards, logo and the SEZ name etc. Package AC is not functioning properly in SEZ office on 8th floor, Casablanca. Needs replacement. Provision of laptops / desktops to all RIPL employees.

SEZ LAND

SEZ LAND DETAILS
 VILLAGES : Bahirichapada, Ramkotha, Sonkotha, Mankule & Kharhashiware. THESIL : Alibag   

DISTRICT : Raigad TARGET  To acquire 100 Acres / week

 22 weeks to complete acquisition (December 2008)  STATUS  Land acquisition is slow due to funds allocation.  Target to have 500 Acres registered land ASAP

LAND USAGE
2,500 acres of land is expected to be developed in two sub phases of four years each Core infrastructure of the project will be fully developed and operational in a phased manner over a period of 8 years Development of other facilities and occupation of the SEZ to its full potential will extend up to 10 years from start of the project.
Land usage * Processing Zone * Non Processing Zone Total * Details in following slides Percentage (Approximately) 51% 49%
100%

Area in Acres (Approx.) 1275 1225 2500

Processing Zone(1275 acres)

LAND DISTRIBUTION

 Logistic park including warehousing FTZ, cargo jetty, Helidrome, Trading &Amusement park – 300 acres.  IFSC – 150 acres  Hi tech industries – 200 acres  Electrical Machinery – 300 acres  IT / ITES – 75 acres   Hotels & Resorts – 50 acres. Other Engineering – 200 acres.

LAND DISTRIBUTION
Non – Processing Zone (1225 acres)

 Common utilities & infrastructure (235 acres)
 Residential – 800 acres
 Entertainment/recreational/institutional/commercial /

Retail – 125 acres  Transportation & Infrastructure – 65 acres

EFFORTS IN GETTING LAND REGISTERED UNDER SECTION 63 (1) (A)
MD met the CM and renewed our request for registering the land under Section 63 (1) A on 2nd Feb 2008. Project Director SEZ, Mr. R. Donde & Mr. Gaurav Singhania taken audience with CEO MMB on 4th Feb 2008. Secretary Port & Transport convened a meeting of CEO MMB, Development Commissioner (Industry) and Ispat Officials on 6th Feb 2008 to know the status of case. CEO MMB convened a one to one meeting with Ispat officials on 12th Feb 2008. Ispat Officials met Secretary to CM on 14.02.08 Ispat Officials met Secretary, Industry on 22nd Feb 2008. MD again met the CM on 25th Feb 2008 to pursue the issue. Ispat Officials were called by Secretary Transport & Port to review the present status of the case on 26th Feb 2008. Ispat officials met Development Commissioner to give her the progress of land acquisition on 4th March 2008. Ispat officials met Principal Secretary, Port & Transport again on 8th & 16th April ‘ 2008.

LEGAL / GOVERNMENT ISSUES
 Permission from Development Commissioner for registering the land under chapter 63 (1) (a)  Status & Way Forward :  Had meeting with Transport Sec. and Development Commissioner on 6/2/08 and number of times thereafter.
 Had several meetings with CEO, MMB – who has been discouraging us. Suggesting a tripartite meeting with RIL, Ispat and Govt. to resolve issue. Not a plausible solution.  Met Mr. Rao, CM – Secretary by 13/2/08 to exert pressure on Development Commissioner.  Need to exert pressure from CM again and again. Contd…

LEGAL / GOVERNMENT ISSUES
 Writ petition:
 Filed to prevent COM from issuing notification for the land reservation for Rewas Port.  Status :

 Cancelled as per MD’s instructions.  MD has now directed to file the suit.

Status Of Land Purchase at REWA (Rewa Infrastructure Pvt. Ltd.) from (23.10.2006 to 31.05.2008)
Sr. No Details Nos. Of Vendors Area in Acres Total Considerati on Payable Amount Paid to Vendors Balance Amount Payable to Vendors Stamp Duty Registra tion Fee Annexure

Sale Deed 1 Executed Sale Deed Executed in (Vani 2 Minerals)

21

35.157 5

17,335,686 17,335,687

1,553,24 0

264,015 A

12

25.363

13,949,375 13,949,375

1,695,70 2

251,553 B

Registered 3 Agreement

70

156.500

86,074,876 74,896,915

11,177,906

6,871,40 0

993,350 C

Continued….

Status Of Land Purchase at REWA (Rewa Infrastructure Pvt. Ltd.) from (23.10.2006 to 31.05.2008)
Sr. No. Details Nos. Of Vendors Area in Acres Total Considerati on Payable Amount Paid to Vendors Balance Amount Payable to Vendors Stamp Duty Registrati on Fee Annex ure

Non Registered 4 Agreement Non Registered Agreement with Stamp 5 Duty Paid Proposed purchase agreement s awaiting 6 payments

19

64.803

33,089,812

23,763,425

9,326,386

D

5

11.048

5,787,375

1,502,812

4,284,563

515,300

E

28 155

70.090 362.960

38,549,500 194,786,623

0 131,448,214

38,549,500 63,338,355 10,635,642 1,508,918

F

PRIORITY FOR ACQUISITION

PRIORITY OF LAND ACQUISITION – PHASE 1
HASHIWARE & SONKOTHA Holding 42 Acres of contiguous land. Available chunk of contiguous land:- >600 acres. Immediate requirement of 208 Acres of land to meet the demand. LAND COMPRISED BY SVY. NO: 320.( Max. Bhagat GP. Land.

PRIORITY OF LAND ACQUISITION – PHASE 2
BAHIRICHA PADA. Holding 82 Acres of land. Available chunk of contiguous land:- 400 acres. Immediate requirement of 168 Acres of land to meet the demand.

FUNDS REQUIREMENT FOR LAND PURCHASE

A. B C

TO CLEAR AGENTS DUES : 9.5 CR. PURCHASE OF 200 ACRES OF LAND : 14 CR. TOTAL :23.5 CR.

NOTE: 30 CR. PER MONTH FOR ACQUISITATION OF PROPOSED 3000 ACRES OF LAND BY THE END OF DEC. 2008.

ISPAT SEZ - UTILITIES

ESSENTIAL UTILITIES
1. POWER ( Generation, Transmission & Distribution) 2. WATER SUPPLY ( Augmentation of water supply system) 3. GAS DISTRIBUTION 4. TELE COMMUNICATION Note: Entire work of each of the above utilities will be taken up as a specific component.

OTHER UTILITIES
1. DRAINAGE SYSTEM INCLUDING SWD ( Under Ground Network) 2. SEWAGE SYSTEM ( TREATMENT PLANT ) 3. SOLID WASTE MANAGEMENT 4. DESALINATION / RECYCLING OF WATER DRAINAGE / SEWAGE SYSTEMS INCLUDING TREATMENT PLANT & SOLID WASTE MANAGEMENT WILL BE TAKEN UP BY SPV/s AS A PART OF HORIZENTAL DEVELOPMENT. DESALINATION / RECYCLING OF WATER MAY BE TAKEN UP AS A PART OF CONCERNED INDUSTRY AND DELINKED FROM GENERAL HORIZENTAL DEVELOPMENT. THE SAME MAY BE TAKEN UP BY CONCERNED CO-DEVELOPERS ON AS REQUIRED BASIS.

LINE DIAGRAM – POWER GENERATION / TRANSMISSION /DISTRIBUTION

POWER
Generation, Transmission & Distribution
 It is envisaged that the ISPAT SEZ would source Power from the Grid, with adequate integrated Stand by Power facility to ensure uninterrupted power supply to all the units & areas within the SEZ. Power Supply to ISPAT SEZ would be availed through the major Transmission Sub Station at Nagothane. The Sub Station is of 400 / 220 KV Capacity & is connected to State Grid. This facility has enough capacity to dispatch two 220 KV transmission feeder Lines to ISPAT SEZ. HT Reception, Transmission & Distribution of Power within the SEZ would be the responsibility of SPV. The same will include HT Receiving / Transmission Stations, Distribution Substations (Over Head Lines / Under Ground Cable network ), HT / LT Switch Gears, Protection System & Metering. Stand by Generation of 300 MW Power, either through conventional or non-conventional method / Captive Generation would be materialized by Affiliates as Specific Component.

ASSESSMENT & SOURCE OF POWER
 As per initial assessment, requirement of Power for 2500 Acre SEZ would be approximately 500 MVA & can be sourced from existing Grid facility at Nagothane.

TRANSMISSION & DISTRIBUTION
MSETCL will carryout the wheeling of transmission of Power from Nagothane Grid Facility to Ispat SEZ ( Approx 50 KM ) at cost under contract. HT Reception, Transmission & Distribution within the SEZ would be the responsibility of SPV.

APPLICATION
Application forms for Power has since been obtained which will be processed on acquisition of required land in the name of SEZ. 7/12 details are required to be furnished along with registration documents. MRSS (Main Receiving Sub Station ) duly marked on map depicting acquired land is to be submitted to the authorities for High Voltage Reception.

DOCUMENTS REQUIRED ALONG WITH POWER APPLICATION
List of proposed machinery. Plot possession Certificate / 7/ 12 abstract / N.A. Permission Registration Certificate from DGTD/SSI/ Texmark N.O.C. from Director of Industries. N.O.C. from Industrial Safety & Health Department, Konkan Bhavan, Navi Mumbai N.O.C. From Local Authorities / MIDC. For the load. Consent from the Water & Air Wing. Point of supply drawing.
CONTD…

Whether the area is coming under BMRDA.

DOCUMENTS REQUIRED ALONG WITH POWER APPLICATION
Details of Electrical Power requirement & details of manufacturing / process activities for which the Power supply is needed Monthly estimated energy consumption / working shifts. Partnership deed/copy of memorandum of article & association of the company / A documentary evidence of registration as a property concern. A copy of resolution authorizing the persons to sign an agreement with MSEDCL & affixing a common seal on the agreement or a specific power of attorney for signing an agreement for power with MSEDCL. Xerox copy of latest energy bill M.D. For previous 12 months.

WATER SUPPLY
 As per initial assessment requirement of Water for 2500 acre SEZ would be approximately 70 MLD.  Government of Maharastra through Ministry of Irrigation is required to be approached for the same.

GOVERNMENT SUPPORT AND LEADING CONSULTANTS ADVISING SEZ PROJECT
Received “In-principle” SEZ approval from the Board of Approvals (Government of India) – 7th January 2008. The project enjoys full support from Government of Maharashtra Ernst & Young are our project advisors and have prepared a business plan IL&FS are assisting in technical and financial feasibility Little & Co. will be our Legal advisors

VARIOUS CONSULTANTS ON BOARD
 M/S E & Y for concept development plan of Ispat SEZ.  M/S E & Y for filing applications for Govt. approval of the SEZ, authorized operations & SEZ benefits.  M/S IL & FS ……Project Management Consultants.

FUNDS / BUDGET
 The fund requirement for SEZ project is approx. 5200 Cr.  Fund requirement of about Rs. 7.0 Cr. weekly to acquire 100 acres  Require 20 Companies for acquiring 1,000 acres of land. Status :  6 companies given including Vani Minerals & Rewa Infrastructure. Responsibility: Mr. JP Agrawal.

IMPENDING ACTIVITIES
 Presentation by M/S E & Y for finalisation of SEZ development plan.  Presentation by M/S IL & FS for project management consultancy.  Forming SPV and obtaining approval from BOA.  Approval from Industry Ministry ( GOM )for registering the land under 63 (1) (a).  Filing application for product specific SEZ (250 acres) formal approval of BoA, GOI approval.  Finalization of various consultants including master planners.  Filing application for formal approval from BoA ( 3000 acres)  Finalization of office complex at Thapar. – CBD Belapur.

IMMEDIATE DECISIONS & ACTIONS ENVISAGED
Transfer of 51 % or more equity to RIPL (SPV). File application to BoA for SPV approval. Provision of Rs. 24 crores to pay for earlier land dealings and to purchase land so that 250 acres contiguous land is available. Make Rs. 30 crores per month available for purchase of balance land upto December ‘ 2008. File application for formal approval for a product specific SEZ (250 acres) to BoA. File writ petition against the orders of Development Commissioner, Industry. Finalise the conceptual model of SEZ (Processing & Non – processing zone) as presented by M/S E & Y. Obtain NOC from MMB / Port & Transport Ministry for registration of land for multi product Ispat SEZ. Get acquired land registered under Section 63 (1) (A). Continue recruitment in RIPL in a phased manner. Hire Thapar Complex as an additional office space for SEZ office.

WAY FORWARD
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Finalization of SEZ Development Plan by end June 2008 (E & Y)
Preparation of Business and Finance model by end July ‘ 2008. Selection of project Management Consultant by August 2008 (IL & FS). Nomination of Master Planners for detailed Master Plan by Sept ‘ 2008. Selection of various Technical Consultants by October 2008.

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Acquisition of land – 2500 acres by end November 2008. Obtaining BoA formal approval for Ispat SEZ by December 2008. Obtaining Governments notification of Ispat SEZ by March 2009. Application for Authorized Operations in SEZ by April 2009. Obtaining SEZ benefits’ approval from Govt by June 2009. Construction of horizontals and infrastructure from Oct ‘ 2009.

THANK YOU !

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