Sub-lease issue impedes Rajkot pump industry's CFC project

The sub-lease transfer issue between Gujarat Industrial Development Corporation (GIDC) and Rajkot-based pump industry of Rajkot has stunted the latter's Common Facility Center (CFC) project.

While members of the pump industry had envisioned an investment of Rs 70 lakh for the project, GIDC has charged them an additional Rs 30 lakh for transferring land on a sub-lease basis. For development of the pump industry, Rajkot Engineering Association (REA) and pump industry players had decided to set up CFC project wherein the facility would take up Research and Development (R&D) and pump testing work.

Moreover, for this, REA had agreed to offer 2,000 sq mtrs of land in GIDC area owned by it for the project. For this project REA and the pump industry have formed a special purpose vehicle (SPV) called 'REA Pump Testing and Research Centre'.

"However, GIDC charged about Rs 30 lakh for transfer the land on a sub lease to pump industry. We have met with the industry commissioner and told him that the CFC project is for benefit of smaller players in pump industry of Rajkot. We are hopeful to solve the issue soon as the industry commissioner has given us a positive reply," said Jayesh Patel, director of REA Pump Testing and Research Centre.

Of the total cost of Rs 7 crore for the project, about 70 per cent will be borne by the central government as cluster development, 20 per cent by state government while rest 10 per cent will be managed by industry players.

However, the members of the industry and REA have stated that the amount being charged by GIDC is not viable for them and have demanded transfer the land without any charges.

While the pump industry is supposed to contribute about Rs 70 lakh for this project, about Rs 50 lakh of the amount has already been collected, with rest of the funds to be managed by the industry players in the current year.

"We are aiming to start the CFC project within this year and are awaiting a positive response from the government. This is the only kind of CFC in Gujarat which will help small manufacturers to develop better quality pumps," Patel added.

The Rajkot pump industry, the third largest pump manufacturing city after Coimbatore and Ahmedabad, pegs a turnover of Rs 800-1,000 crore per annum.

The Rajkot-based 350 pump manufacturing units provide direct employment to the more than 10,000 people and indirect employment to over 100,000 people.