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Amended rules keep hopes alive for 2 IT/ITeS SEZs in Tamil Nadu

With six companies including HCL and Satyam (now Tech Mahindra) waiting to set up shop in ELCOT’s (Electronics Corporation of Tamil Nadu) proposed IT/ITeS special economic zone (SEZ) in Vadapalanji, Madurai, the developer has renewed appeal for a further one year extension of the letter of approval (LOA) for the project, up to May 2020, which is now possible because of the recently amended SEZ rules.

ELCOT has also sought an extension in the LoA for its IT/ITeS SEZ in Vishwanathapuram, Hosur, which lapsed in May.

“Both proposals made by the developer will be examined by the Board of Approval (BoA) for SEZs at its meeting next week as the amended SEZ rules now allow extension of the LoA beyond 10 years on a case-to-case basis,” a government official told BusinessLine.

A one-year extension of the LoA will help the developer operationalise the Vadapalanji SEZ by March 2020.

Both SEZs, granted formal approval in June 2007, had subsequently got nine extensions, the last one lapsing this May.

Under the earlier rules, they were ineligible for further extensions. But, now, with the amendments to the SEZ rules earlier this month, the BoA may, upon request in writing by the developer and after due examination of the case, grant extension beyond 10 years for a further period of a total of 10 years, but not exceeding one year at a time.

The Development Commissioner (DC) for Madras Export Processing Zones (MEPZ), which has jurisdiction over all SEZs and EPZs in Tamil Nadu, has recommended that ELCOT’s Vadapalanji and Vishwanathapuram SEZs may be given extension beyond May 2019.

Built-up area norms

Although the amended SEZ rules have also reduced the minimum built up area requirement for IT/ITeS SEZs to 25,000 sqm from 50,000 sqm earlier (for Category B cities), the ELCOT SEZ in Vadapalanji still does not meet the criteria as the constructed area is 6,516 sqm.

The developer, however, is positive about meeting the minimum built-up area norm. In the Vadapalanji SEZ, 142 acres have been allotted to six IT/ITeS companies including HCL, Satyam (Tech Mahindra), Chain-Sys Software exports, Sutherland Global Services, Caliber Point, and Health Plan System.

“HCL is planning to develop the 60 acres allotted to it by constructing 10 lakh square feet IT building in the next 3-5 years,” according to the detailed road map submitted by ELCOT. Chain-Sys Software Exports Pvt Ltd, too, has obtained co-developer status and would construct 1 lakh sqft IT building in the SEZ in the next 3-5 years.

Supporting its recommendation for extension of LoA for the Viswanathapuram SEZ, the MEPZ Development Commissioner pointed out that US Tech International, a unit in the SEZ, was ready to start operations. The SEZ would become operational from the date the unit starts production, and this would be possible only if the LoA is extended.

Source: The Hindu