According to a recent World Bank paper, 80 Special Economic Zones (SEZs) in 30 countries generated about $ 6 billion in exports and employed about one million people 30 years ago. Today, as many as 3,000 SEZs operate in 120 countries and account for more than $600 billion in exports and employ 50 million people. Ironically, coinciding with the same time frame, India too plunged into the SEZ fray by establishing Asia’s first EPZ (Export Promotion Zone) at Kandla in 1965. However, India has been lagging behind the world in promoting its exports through the SEZs. The scenario is now slowly improving and it is catching up with help from a considerable change in the government’s outlook and policies towards the SEZs from 2000 onwards (See table).
The factsheet on Special Economic Zones (May 1, 2007), Ministry of Commerce & Industry, Government of India, says the expected investment will be Rs 3,00,000 crore and employment from SEZs will be 4 million additional jobs by December 2009. SEZs are a means of attracting companies to set up manufacturing or services bases within the country. India’s service sector contributes about 54 per cent of GDP, of which the IT/ITES sector contributes a major chunk reflected in the 250 percent growth attained in the past three years. As of May 2007, there are 234 approved SEZs and 162 SEZs approved in principle. According to Department of Commerce, Ministry of Commerce and Industry, Government of India, Andhra Pradesh tops the SEZ race amongst southern states with 26 SEZs. This is followed by Tamil Nadu (15) and Karnataka (14). It’s no wonder that top MNCs have showed considerable interest in having their work space in Andhra Pradesh, prompting real estate majors to develop properties. The state is today being seen as the most potential region for developing SEZ. Areas like Gachibowli, Madhapur and Tellapur in Hyderabad are the frontrunners where companies like Microsoft, Google, Wipro, Satyam and Genpact are setting up shop. Fuelling this growth are real estate majors like TSI Ventures and others who are developing SEZs in these areas.
Projects
WaveRock is a 2.2 million sq ft international grade SEZ office space spread across 12 acres, located in the heart of Hyderabad’s IT corridor at Gachibowli, just 20 minutes’ drive from the new international airport at Shamshabad. The SEZ, spread over 53 acres, is promoted by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC). Designed by world-renowned architects, Pei Cobb Freed & Partners, WaveRock has a truly modern, unique design with several user-friendly features. As the first project in India for TSI Ventures, a joint venture of Tishman Speyer and ICICI Venture, WaveRock is a green building slated to achieve a LEED Gold rating per US standards. Tishman Speyer has made a global commitment to sustainability worldwide and TSI Ventures is a founding member of the India Green Building Council (IGBC). WaveRock is just 7 km from a new integrated township being created on 400 acres of land, being developed as a PPP venture led by Tishman Speyer. With close proximity to upmarket areas like Banjara and Jubilee Hills and Hitec City in Madhapur, Gachibowli is today attracting major realtors who are eyeing lucrative locations for their real estate projects. Besides, Gachibowli is just 15 km away from the new international airport at Shamshabad and stone’s throw distance from the ‘Golden Mile’ that is slated to house a large number of multinational and Indian corporates. Besides this, there are similar projects from other major real estate developers further testifying to the potential of the area.
Adds Ali, Director, Vakil Housing Development Corporation (VHDC), “At Hosur, near our project, Vakil Hosur Hills, a multi product SEZ covering 3,300 acres with an investment of Rs 11,000 crore, has been inked between TIDCO, a Tamil Nadu Government Development Agency and Hyderabad based GMR group. The SEZ will take shape between 2009 and 2014. Another project is Cessna Business Park, spread over 45 acres of prime land on the Sarjapur – MarathahalliRing Road, Bangalore. The total built-up area is approximately 4 million sq ft, which includes about 8,00,000 sq ft of non-processing zone. The park will be completed and fully operational by end 2009 and 35,000 employees are expected to be operating out of the SEZ.
Location
Riding high on the benefits of the SEZ project, nearby areas are witnessing a phenomenal growth in real estate. The Government of Andhra Pradesh also seems to have joined the bandwagon by acquiring close to 1,500 acres of land in Gachibowli, a major portion of which will be offered for IT/ITES or SEZ projects. Likewise, the Cessna Business Park project is located on the Sarjapur – Marathahalli Ring Road due to lack of quality office space in CBD locations and availability of quality housing options. Hosur on the other hand, is a very economical alternative to high priced Bangalore real estate. Just like Gurgaon and Noida, Hosur has excellent connectivity, and is just about a 30 minute-drive from Bangalore Electronic City. Hence it is the logical location to expand for Bangalore based business majors.
The benefit derived from SEZs’ is evident from the investment, employment, exports and infrastructural development generated; this seems to be the mantra to help India become the next economic superpower. “SEZs’ can trigger accelerated economic development in any area, and Hosur SEZ is also expected to be a fulcrum of what can be termed as the ‘Greater Bangalore Economic Region’ (like National Capital Region). As a corollary, real estate development, both residential and commercial, is expected to witness explosive growth in and around Hosur in the coming decade,” says Ali.
Source: Fact sheet on Special Economic Zones (1st May 2007), Ministry of Commerce & Industry, Govt. of India
Year Rs. crores
2003-2004 13,854
2004-2005 18,314
2005-2006 22,840
2006-2007 34,787
2007-2008
(Projected) 67,300
2008-2009
(Projected) 1,00,000
