The Hindu Business Line : Fashion City talks fail; Singapore team leaves

THE Singapore delegation, which was on a mission to set up a Rs 350-crore Fashion City in Kochi, cut short their visit and returned to Singapore yesterday.

They were to have continued their discussion with the Chief Minister, Mr Oommen Chandy, and the Industries Minister, Mr Ebrahim Kunju, in Thiruvananthapuram today, and had hoped to sign and MoU with the Government on Tuesday.

While they came with a nine-point agenda, the talks got bogged down on the price of the 104-acre land in possession of Kinfra, which the Government was willing to sell to them. The Executive Chairman of the Ghim Li textile group, Ms Estina Ang Suan Hong, led the Singapore delegation.

The Kitex group, which has a monthly export turnover of around $1 million to the Ghim Li group, acted as facilitator for the visit.

Under the current costing, the price of one sq foot of built-up space for the Singapore group would work out to $4.5 in Kerala, against $1.5 in Indonesia, $1.3 in Malaysia, and $0.90 in Sri Lanka, according to Mr Sabu M. Jacob, Managing Director of the Kitex group.

On their arrival back in Singapore, the delegation sent a fax stating that they required a negotiated price for the land and would then come for further discussions and signing of the MoU, a fortnight from now.

Mr P.H. Kurien, Managing Director of Kerala State Industrial Development Corporation, said that the delegation had gone back to finalise on their costing and logistical support and had promised to come back in a fortnight.

While the Government was negotiating for a price of Rs 50 crore for the land, the delegation was bargaining for a price of around Rs 30 crore.

"The land is low-lying and water-logged and would require tremendous amount of investment. Over and above the Rs 50 crore, filling of the land would require another Rs 25 crore and piling and foundation would require an additional Rs 35 crore. This had taken the land cost to $4.5 per sq foot, substantially higher than other competing South-East Asian countries. And the Singapore Fashion City had planned on a built-up space of 1.5 million sq feet," Mr Jacob said. Unlike the Smart City, for which several concessions were offered, the Government drew a very hard bargain with the Singapore delegation. It did not concede to reduced tariffs for water and electricity.

The request for stable electricity tariffs for another five years, without any hike, was also turned down.

Despite the Government digging in its heels and not conceding to any of the eight demands, the Singapore Fashion City delegation wanted to proceed.

But the talks finally broke down over the price of land, Mr Sabu said. Pressing for reduced land costs, the Singapore delegation had pointed to two high-tension electrical lines passing overhead, under which no construction was possible and which in effect would mean usable land area coming down to 75 acres.

Once the MoU is signed, the Rs 350-crore project - which is slated to provide employment to 12,000 people, mainly women - would be completed in 15 months, hopefully by October 2006. The Government will have to build a 900-m road to the site over which container trucks can commute.

Land is a premium commodity in Kochi

KOCHI: With the interest shown by the Dubai Internet City, the Italian textile delegation and now the Singapore Fashion City, land is becoming a premium commodity in and around Kochi.

"As the juggernaut of the International Container Transhipment Terminal (ICTT) is set to roll on, space and land in Kochi is becoming scarce," Mr P.H. Kurien, Managing Director of the Kerala State Industrial Development Corporation, said.

To further accelerate the pace of economic development, Mr Kurien is keen that the Government acquire another 2,000 acres of land in and around Kochi. Several suitors have already shown interest in the 104 acres of land in the possession of Kinfra in Kochi.

The Government also has another 250 acres in its possession at Aroor, in the vicinity of Kochi. But the advent of ICTT has kindled tremendous interest and the Government should be in a position to satisfy fresh demand for land by large overseas groups, Mr Kurien said.

Kerala is one of the few States in the country where the Government has taken the initiative in procuring contiguous land well in advance and providing it to interested international groups. And the Government is not a loser in the deal. With the demand for land going up, the Government can also make a profit in the deal, while fostering industrialisation in the State.

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