The Hindu Business Line : FIPB turns down AP township plan

THE Foreign Investment Promotion Board (FIPB) has rejected Andhra Pradesh Housing Board's (APHB) plan for the development of an integrated township near Hyderabad, through a joint venture with IJM (India) Infrastructure Ltd.

The proposal has been turned down by the FIPB on the ground that it did not satisfy the minimum capitalisation requirement as well as the minimum area development of 100 acres specified in the guidelines issued by the Centre earlier this year.

IJM (India) is a 70 per cent subsidiary of IJMII Mauritius Ltd which is a 100 per cent subsidiary of IJM Corporation Berhad Malaysia. IJM (India) had sought approval for a downstream investment of close to Rs 5 crore, which constituted 51 per cent of the paid up equity share capital of the proposed joint venture in which APHB had decided to pick up a 49 per cent equity share that amounted to Rs 4.9 crore.

This joint venture project was supposed to come up on a 10-ha site in Kukatpally near Hyderabad. It was expected to be completed within two years of obtaining all approvals.

This was the second FDI proposal submitted to the Government after the guidelines for FDI in township developments was notified by the Centre in January this year.

The earlier proposal, which had been approved by the Government, too was of another IJM affiliate in India, namely Feedback Ventures Ltd.

Around two months ago, FIPB had cleared Feedback Ventures Ltd's proposal for setting up an integrated township in the satellite town of Gurgaon in the outskirts of Delhi which was the first FDI proposal to be cleared in the country.

Feedback Ventures which specialises in infrastructure development has made an initial contribution of Rs 20 crore of the total equity requirement of Rs 100 crore under the umbrella of Feedback Integrated Infrastructure Development Ltd (FIID).

The Andhra Pradesh Government had zeroed in on IJM through a high-powered committee, which preferred the Malaysian firm to players such as Gujarat Ambuja Cements, Unitech Ltd and Sahara India.

The proposed venture would have been IJM's maiden housing project in the country.

The company already has a considerable presence in road building in the country, and is reportedly working on a number of projects in the country.

IJM Corporation which is listed on the Kuala Lumpur Stock Exchange, was established in 1983 following the merger of three Malaysian construction companies, and focuses on contracting, construction management, property development, and infrastructure investments in Asia-Pacific, Australia, Southern Africa and Latin America.

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