AP to resume 78 acre from SemIndia Fab

The Andhra Pradesh government on Tuesday issued orders for resumption of 78 acres of land allotted to SemIndia Fab Private Limited for failing to fulfil its obligations in bringing investment and creating employment at the proposed Fab City near here.

SemIndia Fab was the anchor unit at Fab City, the semiconductor cluster.

The company was allotted 100 acre in 2007. It said it would make an investment of $75 million (about Rs 345 crore) in the first phase for an assembling, testing, marketing and packing plant (ATMP) with an employment potential of 2,000 in a year and a half.

It also promised more investments in the second and third phases apart from creating employment for more than 6,000 people.

The government had issued notices to the company as it failed to implement the project within the timelines stipulated in the memorandum of understanding that it had signed with Andhra Pradesh.

In its reply, SemIndia said the recent financial crisis had impacted most companies globally and it would be difficult for it to implement greenfield projects according to schedule.

Accordingly, the board of Fab City Special Purpose Vehicle Limited decided to resume 78 acres from SemIndia Fab and also fixed December 2010 as the deadline for implementation of the project in the reduced extent of 22 acres. The state government today granted permission to APIIC to resume the land.

Four clean technology companies — Solar Semiconductor, KSK Energy Venture Limited, XL Telecom and Energy Limited and Surana Ventures Limited — are currently setting up solar cells and photovoltaic modules manufacturing facilities in Fab City.