Free trade warehousing zone gets ministry's nod

To come up at Sriperumbudur at an investment of Rs 1200 cr

The ministry of commerce has accorded clearance for a 100-hectare (247 acres) free trade warehousing zone (FTWZ) at the manufacturing hub of Sriperumbudur, 45 km from Chennai, a key promoter associated with the project told the Business Standard.

Sunil Rallan, managing director of J Matadee Eco Parks Private Ltd, the prime mover of the FTWZ proposal, said pending final clearance from local authorities on land delimitation sanctions by December this year, the zone would go into operation at a cost of Rs 1,200 crore by April 2008.

When completed, the FTWZ will have a built-up area of at least 150 acres, sources said. The first phase of the project will cost Rs 350-400 crore, after final clearances to the project from the local authorities comes through in the next eight months, Rallan said.

"Not more than two overseas strategic investors will help finance the FTWZ. The project will have a 50:50 equity ratio of Indian and foreign participation." It will provide employment opportunities for 10,000-12,000 people, he said.

"The Sriperumbudur industrial belt alone will see $4-$5 billion in investments over the next five years. This has created the need for a supply and logistics hub in serve as the warehousing nerve-centre for the area. We hope that the Chennai FTWZ will become the first fully operational SEZ warehousing hub in India," said Rallan.

An industry source added that a Taiwanese company has been finalised as one of the strategic investors in the project, and housing facilities for this company would be provided within the FTWZ premises.

"We will be tying up with the Dalian Free Trade Zone for strategic know-how and technical inputs, among other things, as we are keen to market the Sriperumbudur FTWZ to Chinese companies. We have already had enquiries from corporates in China, Taiwan and Singapore who will be keen to use the FTWZ clearing facilities."

Tier 2 and Tier 3 level suppliers, who would not find accommodation within the premises of manufacturers within the SEZ, would be permitted to operate out of the new FTWZ, said Rallan.

"They will help in active employment generation. We will provide single-window customs clearance and warehousing facilities for ancillaries, bulk cargo and other raw materials procured by the SEZs of different manufacturing companies in the Sriperumbudur area," Rallan said.

Ernst & Young (E&Y) is the investment adviser to the FTWZ project. While the ministry of commerce has granted in-principle or final approvals for FTWZs to a number of SEZs and ports across India, none is fully operational to date.