RR Industries to set up IT township at Madurai

Infrastructure development firm RR Industries, which provides infrastructure facilities to IT firms, is firming up plans to set up a Rs 4,500-crore IT township and SEZ near the Madurai airport.

R Ravi, managing director, RR Industries, said that the first phase of the project, which would come up on 400 acres of land, would be completed at a cost of Rs 600 crore within a year.

A special purpose vehicle, Rudradev Township Private Limited, has been set up to implement the project. The company is in talks with investors to rope in the debt component of Rs 400 crore for the first phase.

RR is investing a Rs 160-crore equity in the first phase, after plonking down Rs 40 crore as deposit. The company has completed the land purchase at a cost of Rs 90 crore.

Claiming that the vast majority of the purchased land was "dry land", Ravi added that the company had paid cash upfront to land-owners while acquiring the land.

The completed facility will have 7 million sft of IT park space and 25,000 apartments, a majority of which the company plans to offer for sale.

"At least one-third of the total number of apartments will be situated within the 50-acre SEZ planned inside the IT township," he said.

The ground-breaking ceremony for the IT township and SEZ has been planned on December 5.

"As the real estate prices in the northern parts of Madurai, which includes the highway to Tiruchirappalli, have gone up, we have preferred to operate out of south Madurai. About 400 acres of land has been purchased near the airport to house the integrated IT township," he added.

The entire IT park space, when operational, will provide direct employment to 70,000 people and indirect jobs to another 10,000 people.

The park will also operate a biomass plant to generate power from weeds growing in the area and water recycling plant to reuse over 80 per cent of the water.

Noting that the work on the township would be completed in four to seven years, depending on the demand from IT companies, Ravi added that Flextronics had expressed interest in leasing 3 lakh to 5 lakh sft of land in the IT SEZ, which it plans to expand into a 1-million sft facility over the next seven months.

"While Coimbatore has been billed as the second fastest growing city for manufacturing and IT infrastructure, Madurai is geographically ideal for industrial real estate development with no major town further south. Over ten flights are operating out of Madurai every day, and the number would go up to over 20 flights by 2007-end. This will improve connectivity and help further development in the southern region of the city," Ravi noted.

RR has developed a total of 6 lakh sft of land for its four IT facilities at the Guindy industrial estate over the past year, and expects to develop over 1 million sft in the next nine months.

The IT infrastructure at Ambattur industrial estate has been growing fast, and a few IT companies operating out of the Guindy facilities are keen to start operations in Ambattur, he said.

The proposed IPO of the company has been rescheduled to the middle of next year.