The Hindu Business Line : `Trust & trade'

ALTHOUGH it floundered in the formative years, the SEEPZ Special Economic Zone in Mumbai is today a sparkling success story in the realm of India's SEZ sector.

The tastefully landscaped, sprawling zone, with wide-open boulevards, rich sprout of greenery and even a perennial lake, has been attracting a steady stream of exporters wanting to set up units here.

With a growth rate of almost 30 per cent in terms of turnover and expansion plans underway, the SEZ is poised for another quantum leap in exports.

Mr V. Madhavan Nair, the SEZ's Development Commissioner, who has been at the helm of affairs for almost three years now, speaks about the zone and its future plans in an interview with Business Line. Excerpts:

Could you trace the growth of the SEEPZ SEZ?

SEEPZ actually started off as an export-processing zone for electronics in 1974. But after the gem and jewellery sector began to set up units here from 1988, it started to grow, placing India in a prominent position in the world jewellery trade. Subsequently, after the transformation of SEEPZ into a Special Economic Zone in 2000, which significantly streamlined procedures and simplified customs clearances with no routine inspection of goods and export parcels, it became an exporters' paradise. Today, the thrust of the zone is `trust and trade,' with the concept of self-certification and minimum procedural bottlenecks.

Why did you decide to continue with the original name of SEEPZ?

That is because SEEPZ had become the brand name of the jewellery exported out of the zone in the global market.

What was the export turnover of the zone last fiscal?

In 2003-04, the zone clocked a turnover of Rs 7,856 crore, as against Rs 6,500 crore in the previous financial year. Out of the Rs 7,856 crore, the turnover from the gem and jewellery sector was about Rs 4,400, while that from the IT and electronic units were Rs 1,300 crore and Rs 1,400 crore, respectively. In the current fiscal, we have set a growth target of 30 per cent, which we are confident of achieving.

What are the leasing rates for plots at the zone?

A company may lease one or more plots for a period of 30 years at Rs 10 per sq. metre per annum. Optionally, pre-constructed Standard Design Factories are available in areas of 500 sq. metres to 900 sq. metres on a five-year renewable lease basis. Considering the fact that the zone is situated in a prime location in Mumbai, the rates are very attractive.

What about infrastructure, such as power and water?

As the SEZ is statutorily exempt from power cuts, an uninterrupted power supply is guaranteed from the generating stations of western Maharashtra. The average charges for power are Rs 6.90 per unit. As for water, the zone has an assured supply of 4.55 million litres of water per day, which is charged at Rs 41 per 1,000 litres.

You have also started OBUs...

Yes. We today have six offshore banking units (OBUs) in the zone, which can provide soft export loans and finance capital goods. The OBU concept is aimed at reducing transaction costs for the units and helping eliminate middlemen, as there will be direct interaction between banks and the unit owners.

What is the status of the zone's expansion programme?

We have initiated the move to set up the SEEPZ plus-plus, adjoining the existing zone. In the new zone, more than 3.5 lakh sq. feet of plots, accommodated in seven floors, will be available. More than 22 units, apart from service units, can be accommodated here. For the existing zone, we are in the process of setting up a separate earth station, which will be ready in about six months; this will enable the IT units to transfer data to their clients in a shorter span of time.

How will the proposed SEZ being set up by MIDC impact SEEPZ?

The Maharashtra Industrial Development Corporation has proposed a massive SEZ here, which will be spread over an area of 10,000 acres. It will be a multi-product zone, with units in the manufacturing, textile, agro and service sectors. Together, this will become one of India's major industrial hubs.

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