Khivraj Tech Park plans SEZ in chennai

Khivraj Tech Park Pvt Ltd, the real estate arm of Khivraj Motors, is planning a 25-acre IT products specific SEZ (special economic zone) in Navalur, Chennai, according to Mr Ajit Chordia, Chief Executive Officer, Khivraj Tech Park.

This would be the company's second venture in this area, the first one being Olympia Tech Park in Guindy, promoted jointly with Eveready Industries India.

Some of the existing clients at Olympia have evinced interest in taking up space at the new technology park as a part of their expansion plans, he said, including one major telecom outsourcing company.

Some of the major clients at Olympia include AIG (American International Group), an insurance products and services provider, and Mindtree, a Bangalore-based software services provider.

Mr Chordia said that the company is hoping for SEZ status because of the benefits to IT companies. "Since there is no certainty that STPI (software technology parks of India) benefits would be extended beyond 2009, bigger companies such as Wipro and IBM are looking at SEZs," he said.

From the developers' perspective, the capital cost comes down by about 10 per cent in an SEZ, which is not a major benefit, he said. Developers are entitled to benefits under the industrial park scheme, which is still valid for the next two years, and would allow the company to enjoy ten years of tax-free operations.

However, apart from the cost, the SEZ also allows for an assured title deed, and reduces the possibility of land disputes.

The company would also set up a school or a hospital for the benefit of the locals around the SEZ region.

Khivraj is also planning to expand to tier two cities in anticipation of growth in those areas. It would send in applications for SEZ allocations in Coimbatore, Tiruchi and Madurai.

Mr Chordia said that Coimbatore is emerging as a suitable alternative to Chennai, whereas Tiruchi is a city for the future. "We believe Tiruchi stands a good chance of becoming the next best destination after Coimbatore, because of the number of good engineering and arts colleges," he said, pointing out that a company such as ABN Amro has been recruiting B.Com graduates irrespective of their background. This could mean that the next logical step is to set up shop in those cities.

Also, Coimbatore is fast becoming as expensive as Chennai as far as real estate costs go. Rental costs in Tiruchi would still give the company a cost saving of about 40 per cent, he said.

source: The Hindu