| Date: |
12-05-2015 |
| Subject: |
RGIA SEZ poised for growth |
HYDERABAD: With Shamshabad emerging as Hyderabad's next big realty destination, all eyes are now on the sprawling 230-acre Special Economic Zone (SEZ) nestled within the Rajiv Gandhi International Airport's (RGIA) 'Aerotropolis' Airport City.
Touted as the most expansive venture of GMR Hyderabad International Airport Ltd (GHIAL), the SEZ, complete with India's first airport-based Free Trade Zone (FTZ), currently has seven companies setting shop there, including CFM Regional Engine Training Centre (a major aircraft engine manufacturer) and Dubai-based aircraft parts warehouse Global Aerotech, with many more in the pipeline.
In fact, GHIAL authorities confirm that the improvement in the "business environment" of the city has brought with it "significant interest in terms of new investments". "We are in discussion with some prospective investors who have evinced interest in setting up their units," a GHIAL spokesperson said, however, refraining from divulging any further details.
Industry observers agree that the RGIA SEZ has tremendous potential for growth. "It is an ideal location for a multiple-product SEZ. Considering it's an airport SEZ, authorities should focus on attracting investors working in areas such as chip manufacturing that need to export products on short notice," said Manoj Kumar Agarwal, chairman and managing director of DSL Infra Pvt Ltd.
The only dampener is the introduction of minimum alternate tax (MAT). "This has spelled doom for all SEZs in general as companies are now forced to pay 20-20% MAT. This negates the basic reason why a firm opts for a SEZ to save on tax. Also, getting pre-approvals to start a process within a SEZ is still very tedious," Agarwal said.
In the case of RGIA, in particular, there are also aviation rules and regulations that investors need to comply with. "That proves to be a deterrent at times, given there are restrictions on height etc," said Viswanath Attaluri, chief operating officer, Capital Fortunes Pvt Ltd, who was previously associated with the aviation sector.
Another drawback, according to him, which RGIA's SEZ suffers from is extremely high leasing rate. "GMR is a business house and, predictably, the rates here are at least 30-40% more than what's prevalent in state-managed SEZs. Also, long-term manufacturing units prefer to set shop on government land as they can own it. Space here is only available on lease. That makes future expansion plans difficult to materialize," Attaluri added.
GHAIL, however, is confident of upward movement in the SEZ's revenues in the future. Apart from the growing "favourable investment sentiment in the country" and the "business friendly dispensation at the central government" level, officials feel that the government of Telangana too "is keen on promoting and developing the Aero Space sector" now, thus creating hope of a prosperous future. "Initiatives like Make in India' is going to be instrumental in driving this growth moving ahead," the GHIAL spokesperson added.
Source : timesofindia.indiatimes.com
|