Date:25/02/2006 URL: http://www.thehindubusinessline.com/2006/02/25/stories/2006022503740500.htm

Back Mumbai twin SEZs achieve financial closure

Vinod Mathew

Second largest

The twin SEZs are slated to be the second largest single location SEZ complex in the world.

Mumbai , Feb. 24

The twin special economic zones (SEZs) coming up in Mumbai mainland - Navi Mumbai SEZ and Maha Mumbai SEZ - promoted by SKIL Infrastructure Ltd and where Reliance Industries through its group companies have taken controlling stake, have achieved financial closure.

The Rs 5,000-crore first phase project, revised after induction of RIL as majority stakeholder, to be completed over 24 months starting June 2006, has tied up debt to the tune of Rs 2,800 crore, a source familiar with the development told Business Line.

"Project implementation of the two SEZs will be carried out simultaneously as they are located side by side. Financial closure was achieved only a couple of weeks back with the two banks, IDBI Ltd and UTI Bank, committing Rs 2,100 crore between them. Construction will take about three months to commence, with only environmental clearance pending," he said.

RIL, along with its associate companies, has emerged lead promoter of Maha Mumbai SEZ by picking up 75 per cent stake; its holding in Navi Mumbai SEZ is 48 per cent, with 26 per cent each held by SKIL and CIDCO, respectively. SKIL has retained 25 per cent stake in Maha Mumbai SEZ.

The twin SEZs are slated to be the second largest single location SEZ complex in the world with 35,000 acres, the largest being Shenzhen, near Hong Kong with 65,000 acres. The Singapore Government-owned Jurong Town Corporation is to be the master planner for the two SEZs.

Link bridge

Meanwhile, SKIL, along with its partners IL&FS and Laing O'Rourke, UK, is close to selling 51 per cent in the consortium that is now one of the three short-listed bidders to execute the 22.5-km Mumbai Trans-Harbour Link Bridge between Sewri and Nhava. IL&FS is the lead partner with 45 per cent, followed by SKIL with 40 per cent and the British company with 15 per cent. The link bridge, that will reduce the travelling time from Nariman Point to the SEZ from 2 hours to less than 30 minutes, is estimated to cost Rs 4,000 crore and will take about 40 months to execute. The other two consortiums in fray are L&T-Gammon India-Bouygues Enterprises, France and Italthai Engineering, Thailand- Skalska, Sweden.

The project also envisages two dispersal systems or overhead bridges across the existing roads. One will be an eight-km bridge connecting Sewri with Colaba and another, a four-km bridge between Sewri and Worli. In the second phase, a railway link is also planned at an outlay of Rs 2,600 crore.

The twin SEZs are eyeing an investment mark-up of over Rs 50,000 crore in seven years, post-RIL entry with over 250 MoUs already signed and another 1,000 MoUs under negotiation. The two SEZs will share many facilities, thus reducing project implementation cost.

Hurdles cleared

One of the remaining hurdles in the way of the project has been cleared with a writ petition filed by Anik Development Corporation, Gammon India and others in Bombay High Court last year pleading that the Navi Mumbai SEZ project be re-tendered getting withdrawn recently.

Among the reasons cited for demanding re-tendering was the charge that SKIL was indulging in trading and not development, by co-opting RIL as equity partner.