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TIDCO seeks Rs 9-cr equity from State for biotech venture

Our Bureau

CHENNAI, April 24

THE Tamil Nadu Industrial Development Corporation (TIDCO) has sought Rs 9 crore financial assistance from the State Government as a part of the equity for the Rs 62.5-crore biotechnology incubator park proposed at Chennai.

TIDCO plans to float a joint venture company with Cornell University of the US for executing the project. The US university is expected to provide the technical inputs including human resource development, sources said.

The industrial development agency is exploring two possible models for the project. One envisages leasing the land, in which case the project cost would work out to Rs 42.5 crore and the other involves outright purchase of land which will involve a cost of Rs 62.5 crore.

While both models are feasible, according to the Hyderabad-based Sathguru Management Consultants, TIDCO believes leasing the land would be ideal, said sources. Either way, TIDCO hopes to limit its equity to Rs 9 crore.

Of the total project cost of Rs 62.5 crore, the equity component would be Rs 29.5 crores. This would include Rs 20 crore as land cost, Rs 50 lakh subsidy from the State Government and TIDCO would chip in Rs 9 crore, for which it has now sought Government 's assistance.

Five acres land is to be alloted near the Tidel Software Park at Taramani. The land cost has been worked out at Rs 4 crore per acre, sources said.

The balance is to be raised as term loan, venture capital assistance and soft loan from the Technology Development Board.

Unlike other ventures where private participation has been encouraged, TIDCO cannot look to this avenue for funds. With the incubator park expected to be occupied by 50 biotech companies carrying out research, ensuring confidentiality is crucial. Therefo re, the project has to be implemented by an independent and unbiased agency, said sources.

The biotechnology park will involve a 18,000 sq ft bio-resource centre and a 1,20,000 sq ft common tenancy area consisting of customised laboratories. The revenue streams include rental income of Rs 30 per sq ft per month and operation and maintenance ch arge of Rs three per sq ft per month with a five per cent annual escalation.

In addition, royalty income would be generated from technologies developed and commercialised out of the work at the park and fees on short term courses and training courses to be conducted, sources said. TIDCO hopes to get through the contractual agreem ents with Cornell University shortly, sources said.

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