The Hindu Business Line : High land prices a hurdle for Mangalore SEZ plan

Sources said here that land costs in the zone are being quoted upwards of Rs 10 lakh per acre. The actual sustainable land costs, the sources said, was about half that price or about Rs 5 lakh an acre. The land requirement, according to current guidelines for an SEZ is at least 1,000 acres, they added. The availability falls short of that requirement. Even if the land allotted to the Mangalore Power Company, promoted by CLP-Tata, is included, it would still not be sufficient to meet the SEZ criteria.

The original proposal for Mangalore as an SEZ location was mooted by the Kanara Chamber of Commerce and supported by the State Government. The primary locational advantages in having an SEZ in the region were proximity to the port, airport, railhead and links to the major National highways. The sources said that the draft in the port could be increased to 15 metres. This draft would meet the requirement for docking of new generation container/bulk carriers in the port.

The State Government had also proposed utilisation of some of the facilities of Kudremukh Iron Ore's terminal in the Mangalore port for providing supporting infrastructure. However, despite the addition, these facilities were still not sufficient to offset the high investment costs, sources added.

An alternative proposal put forward using the entire coastal region, by including Hassan, the Hubli-Dharwad belt was then taken into account. The economics would still not work out, the sources said. This was because at the current prices of land, the investments required would be very high, the sources said. As a result, there was a possibility that some of the industries would prefer to locate their units in the Kasargod industrial estate in Kerala and at the same time use the infrastructure available at Mangalore. Such a situation was already beginning to happen, they added.

Consequently, the Karnataka Industrial Area Development Board was examining proposals and was attempting to locate alternative sites in the coastal regions, which would conform to Commerce Ministry's guidelines of minimum land availability.

This proposal included, locating the proposed Nagarjuna Power Corporation Ltd's 1,000-MW power plant in the SEZ itself. This was to ensure uninterrupted power supply to the SEZ.

Besides, power availability would ensure that investments flowed into Karnataka itself. If the proposal materialises Mangalore would be the first greenfield SEZ in the State.

The three SEZs on the western coast are in Kandla in Gujarat, Santa Cruz and Kochi in Kerala.

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High land prices a hurdle for Mangalore SEZ plan