Financial Daily from THE HINDU group of publications
Wednesday, Feb 13, 2002
SEZ status sought to boost Vallarpadam box terminal
Sajeev Kumar V.
KOCHI, Feb. 12
TO make private participation in the proposed Vallarpadam Container Transhipment Terminal more attractive, the Cochin Port Trust (CoPT) has sought the permission of the Union Commerce Ministry to convert the area into a Special Economic Zone (SEZ).
The crux of the proposal, which has been cleared by the Board of Trustees of the port recently, is to turn Kochi into a free-port-cum-free-trade zone. The area's development would take a cue from the free trade zones in other parts of the world.
Dr Jacob Thomas, Chairman of the port, told Business Line that the SEZ was deemed as a foreign territory for the purposes of trade and tariffs. All imports into the SEZ would be duty-free and there would be only minimum customs formality. There would be no customs examination of import and export and investment approvals, even for 100 per cent FDI-owned project, would be obtained from Kochi.
As of now, SEZ would be a reformulation of the container hub and would include the 150 acres of land on the Vallarpadam Island where the terminal was proposed to be set up. Besides, the port had at its disposal about 600 acres of land on the Puthuvypeen Island.
The entire area would be developed into a customs bonded area. It would have an international transhipment terminal, bunkering facilities, ship repair facilities, shopping malls, golf courses, warehouses and processing facilities, he said.
Apart from these, the Special Purpose Vehicle (SPV) set up for creating SEZ was exempted from income tax for 10 years under Section 81 (A) of Income Tax Act and this would make the project attractive to potential investors. The proposals from the port were backed by financial analyses that present a significant savings on investments.
Infrastructure investments within the SEZ's were exempted from customs duty in case of imports and from excise duties and sales tax in case of purchases from the domestic market. This cut investment cost by 35 per cent, Dr Thomas said.
The port was now handling about 13.5 million tonnes of cargo per annum.
Willingdon Island currently does not have enough space for the development of terminals and other associated activities. In anticipation of this, during 1984 an area of about 440 acres of land at the Vallarpadam Island was reclaimed as part of the integrated development project by the port, he added.
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