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Gujarat may find it difficult to allot land for Rs 29,000-cr chip plant

Virendra Pandit Ahmedabad | Updated on February 19, 2014 Published on February 19, 2014

Although the Union Cabinet on February 14 approved the setting up of one of India’s two electronic chip-manufacturing plants at Prantij in Himmatnagar district, North Gujarat, the State Government may find it “difficult” to allot land for a project to be set up with a big-ticket investment of over Rs 29,000 crore.

When contacted, a senior revenue official told Business Line there is simply no land available for the semiconductor project at Prantij. “Some 500 acres of land is available at Vaghpur, but it is meant for a proposed Central University. We have no application from any industry to be set up at Prantij, either.

“Even if an industry has to purchase private land, it has to approach us with the proposal. But that hasn’t happened so far,” the official said on condition of anonymity.

Interestingly, the State Government had recently said it would allot 1,000 acres of land at Prantij for this ambitious plant and also arrange for water supply there. Despite repeated attempts, Industry Secretary Kamal Dayani was not available for comment.

Last week, the Centre approved two such mega-projects totalling investments of Rs 63,410 crore, to be set up by two business-cum-technology consortia. One of these is proposed to be set up at Prantij with an investment of Rs 29,013. This will be developed by the Hyderabad-based and NRI-founded Hindustan Semiconductor Manufacturing Company Ltd, through its subsidiary HSMC Technologies India Pvt Ltd, in partnership with France’s ST Microelectronics, which is Europe’s biggest semiconductor maker, and Malaysia’s Silterra Malaysia Sdn Bhd.

The other plant to manufacture electronic chips, technically known as semiconductor wafer fabrication manufacturing facility, is proposed to be set up by Jaiprakash Associates at a cost of Rs 34,399 crore along the Yamuna Expressway in Uttar Pradesh. Like the Gujarat plant, this plant will also have a capacity to manufacture 40,000 wafer starts per month (WSPM). In this endeavour, Jaiprakash will have IBM, USA and Tower Semiconductor Ltd, Israel, as partners.

According to the existing plan announced by the Centre on February 14, the two consortia would be issued the letters of intent by March 31 and the final agreements are likely to be signed by August this year. The Union Government’s Empowered Committee will take all decisions to implement the project.

The two proposed projects would create 22,000 direct jobs and indirect employment for one lakh people and boost the development of electronic systems in the country.

The Centre will also provide incentives to the two units, including exemption of basic customs duty (BCD) for non-covered capital items and investment-linked deductions under Section 35AD of the IT Act.

Published on February 19, 2014
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