Khivraj Tech Park plans IT SEZ near Chennai

Abhinav Ramnarayan

To seek SEZ allocations in Coimbatore, Tiruchi, Madurai

Chennai , Oct. 23

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.
http://www.thehindubusinessline.com/2006/10/24/stories/2006102401111900.htm