The Hindu Business Line : Jesco set to sign MoU for developing Mangalore SEZ

JAIPRAKASH Engineering and Steel Company Ltd (Jesco) is set to become one of the co-developers of the Mangalore Special Economic Zone (SEZ). A memorandum of understanding (MoU) to this effect is to be signed soon.

The President of the Kanara Chamber of Commerce and Industry (KCCI), Mr R.D. Kini, said, "We expect to sign the MoU with Jesco in the first week of June ". Jesco, a subsidiary of the Nagarjuna Fertiliser group, has offered land for SEZ development. . At present, Jesco has about 800 acres of land in its possession. Besides, talks are also on with ILFS Ltd, which was expected to become one of the co-developers in charge of project development and project financing. The initial investment required for the SEZ's infrastructure development is estimated at Rs 400 crore.

The MoU with Jesco was expected to accelerate development of the Mangalore SEZ. Progress has been slow so far in view of difficulties faced in land acquisition and due to high land prices in the region.

Consequently, the option considered was to include Hassan district as well, where the entire manufacturing sector was to be located. This proposal, was however, resisted by some of the intending investors because of the distance from the New Mangalore Port and other logistical disadvantages.

Besides, under the guidelines of the Commerce Ministry, SEZs are to be located near major ports. In fact all the export processing zones, upgraded into SEZs along the western and eastern coasts are in the vicinity of major ports.

Along with the Jesco offer, the land originally allocated to CLP Power is also expected to be used for SEZ development. It may recalled that CLP Power had pulled out of the Mangalore Power Project.

The increased land availability is expected to finally conform to the Ministry of Commerce guidelines of 1,000 hectares.

The New Mangalore Port Trust has also offered to earmark a portion of its land for the SEZ development.

These efforts have now overcome some of the major start up problems for development of the SEZ, sources said.

Some investors have already lined up for investing in the SEZ. ONGC has indicated its interest to locate its downstream petrochemical complex in the vicinity of the SEZ. Sources in KCCI said that discussions were underway between KCCI and ONGC Ltd in this regard.

More investors were expected to flow in view of the access to the port paving the way for the development.

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