GIDC to partner Adani in Mundra Plastic Park venture.

GANDHINAGAR: Gujarat Industrial Development Corporation (GIDC) has decided to invest 15 per cent in setting up of a Special Purpose Vehicle (SPV) for the development of a plastic park in Mundra. The Adani Port and Special Economic Zone Limited (APSEZL) plans to develop the plastic park under the Union chemical and fertilizer department's scheme for developing such parks through public private partnership mode.

Adani group proposes to invest around Rs 196 crore for developing the park on 118 acres of Mundra Port SEZ. GIDC sources said, "As per the Government of India's policy, the state government has to partner with private companies to develop such parks. The state government has asked the GIDC to invest in the SPV. The APSEZL has sent its proposal to the government. They have tied up with 47 plastic producers to establish their exports units in the park. The company had requested for 15 per cent equity from the state government for the project."

Sources said that since the Centre's policy dictates that the state share in SPVs be at least 26 per cent, the GIDC and the company are still working out the proposal. According to the APSEZL proposal, the internal rate of return of the equity will be around 30 per cent.

The central government scheme states that the APSEZL will receive 50 per cent of the project cost or a maximum of Rs 40 crore from the Centre.

The Centre has cleared the APSEZL's proposal after rejecting it in 2011-12. APSEZL has developed a textile park under a similar scheme that is operational since 2011. The SPV for the textile park did not have any mandatory provision for the state share. Adanis have attracted around Rs 818 crore investment in the textile park out of which around Rs 343 crore is foreign investment.

Source : timesofindia.indiatimes.com