WITH the government having finally cleared a package of concessions for the semi-conductor industry, a group of Silicon Valley NRIs are planning to set up a joint venture in India to invest $4.5 billion in semiconductor manufacturing.

The group will float a SPV under the name of Hindustan Semiconductor Manufacturing Corporation (HSMC) India and tie up with a global major, one of the top five multinationals in this segment, to set up two fab units. Samsung, Freescale Motorola, Intel, Infenion, ST Microelectronics and Toshiba are among the global leaders shortlisted for the JV which is likely to be announced within three weeks.

This will be the second major investment flowing into the semiconductor sector, after SemIndia’s $3-billion investment plan. SemIndia is in the process of developing its ‘assembly, test, mark and pack’ (ATMP) facility in Hyderabad, to manufacture its first chip by 2008. It has signed a MoU with AMD for transfer of technology, besides a pact with Flextronics for equity participation in its proposed fabrication facility.

The location for the two semiconductor fab units that HSMC group plans to set up is yet to be decided. The group is, however, in talks with the state governments’ of Karnataka, Andhra Pradesh and Tamil Nadu.

HUDA Targets Dec2007 for Commencement 

The Centre approved the Rs 2,700-crore loan for the final phase of the Outer Ring Road project. With this loan, to be given by the Japanese Bank for International Cooperation, the entire funding for the prestigious project was tied up. While the Hyderabad Urban Development Authority is raising finances on its own for the first phase which is already grounded, the authority opted for the annuity model for the second phase.

“The loan for third phase is available at about three to four per cent interest and has 30 year time frame for repayment. The State has a 10-year moratorium after which the loan will be repaid in 20 years. Because of the approval of the loan tie up, the third phase can now be grounded in December 2007 itself,” an elated ORR project director Piyush Kumar told this correspondent. The committee on expenditure at Department of Economic Affairs cleared the ORR loan along with the Rs 5000 crore high voltage distribution system and Rs 6000 crore Krishnapatnam thermal power station. The German funding agency KSW will be extending a loan of Rs 3200 crore for the Krishnapatnam thermal plant.

The committee, however, kept on hold another ambitious project of the State government on improving water supply in Hyderabad metropolitan area. Official sources said the committee wanted the State to complete the procedure of getting a nod from the Union cabinet for this project. The ORR project officials divided the eight lane express highway into three phases.

First phase includes the road from Gachibowli to international airport at Shamshabad, second phase includes Gachibowli-Pattancheru and International airport-Vijayawada highway, and the remaining part is in the third phase. The officials were worried about the funding for third phase which is not as lucrative as the first two phases.

The ORR Alignment has been finally approved by the Govt. through the G.O.No. 8, after Constituting a Committee of Sr.Officers of the Govt. under G.O.No. 87 including, Sri SP Singh, IAS, Secretary, MAUD, as the Chairman of the Committee, and Sri LV Subramanyam, IAS, MD, InCAP, Sri Jayesh Ranjan, IAS, VC, HUDA, Sri Premchandra Reddy, IAS, Dist. Collector, Ranga Reddy District, Sri Burra Venkatesam, IAS, District Collector, Medak District and the Project Director, ORR, Sri Peeyush Kumar, IAS as members of the Committee. The Report of the Committee was approved by the HUDA Board and there upon by the Govt.

In mid- December, 2005 the new alignment Villages were notified and finally the notified villages list stands as Phase I - 16 and Phase II - 81.

The Land required for the ORR is proposed to be taken up in two Phases. Phase I is the 22 Km Stretch between Gachibouli Junction and the Shamshabad NH7 Junction at Tondupally. The total land required is 750-00 Ac., out of which the private land is 500 Ac. And the remaining stretch is the Phase II, which covers the remaining 137 Km. The land required for Phase II is about 5500 Ac., out of which the Govt. land is about 1000 Ac. 7 SDCs are inducted in the Project for the entire Land Acquisition. The Status of Land Acquisition for ORR is given below.
 
Phase I

The total Private land required for Phase I is 500 Ac. It is being acquired by four SDCs. The Estimated Cost of Acquisition is Rs. 32.55 Cr. out of which the Cost of Land is Rs. 26.55 Cr. and the cost of Structures is Rs. 6.00 Cr. Except at Junctions, the land acquisition is completed for PhaseI.

The Junction Areas are demarcated and Surveyed. The areas include Shamshabad Jn.(already notified under Urgency clause), Gachibouli In., Nanakramguda In., & APPA Jn.
Phase II

The total Private land required for Phase II is 4500 Ac. The Estimated Cost ofAcquisition is Rs. 250 Cr. Entire Extent is at Draft Notification Stage. The Phase II Consultants, the Aarvi Associates, the Engineering and the Revenue Units are jointly surveying the Phase II Alignment. By 15th January, 2006, the Central line of the Alignment will be fixed. By 15th Feb, 2006, the ROW Pillars will be erected. By 15th April,2006, the Land acquisition will be completed.
 
 
Land Compensation:

The Land is being acquired for the ORR by passing General Award. The normal provisions of the LA Act are being observed for determining Compensation amounts. For the Losers of Houses the Rehabilitation measures are being worked out based on the Resettlement & Rehabilitation Policy of the Govt. of AP.

The Govt. of AP, proposed major infrastructure facilities in Hyderabad city and one of them is. the orbital linkage to decongest the traffic flow on the existing major arterials. The Outer Ring Road should be viewed as road -cum- area development project since the aim is the development of well planned and and well connected Urban settlements around the Hyderabad Metropolitan area. The 159 km long ring road connects Patancheru- Shamshabad- Hayathnagar- Medchal ­Patancheru providing connectivity to various State Highway and National Highways, to by pass the city of Hyderabad . The importance of the proposed corridor being, 

• Relieves congestion on metropolitan area and inner ring road and meets the future demand. 
• Provides orbital linkage to radial arterial roads 
• Creates options for development of the further satellite townships 
• Provides linkage to the proposed MRTS and Bus system 
• Provides quick access to the International Airport from Strategic parts of the city 
• Connects various new urban nodes outside the city like Hi- Tech city , Games village, lIlT, ISB, Hardware Park, Singapore Township Financial district etc.,

The traffic studies conducted on NH-7 and NH-9 show that the road is due for 4/6 lane. The traffic movement on the existing inner ring road shows that the existing 4- lane road is inadequate for the movement of the traffic at the design level of serviceability.

Considering the anticipated growth in the region and development of the proposed satellite townships around the ring road and beyond, and the traffic thereby generated, an 8-lane divided carriage way is planned for a design life of 20 years.

The conclusion to develop a highway with full control of access warrants providing highway grade separations or interchanges for all intersecting highways. Once it has been decided to develop the route as an expressway all intersecting highways should be terminated, rerouted or provided with a grade separation. The proposed corridor is designed to be fully access controlled and limited access is to be provided at NH/SHI Major road crossings. 2-lane service roads designed to carry two way traffic, are proposed on both sides of the corridor. Low level underpasses are to be provided for connecting both the service roads at every 1-2 Km, where the terrain permits.

The project is proposed to be implemented in 2 phases and is estimated to cost Rs 3000 Crores. 

• Construction of 22 Km of Phase-I from Gachibouli In to Shamshabad NH 7 In. (Rs 500 Crores). 
• Construction of 140 km of Phase-II (Rs 2500 Crores). 

Connecting:

Narsingi- Kollur- Patancheru- Medchal- Shamirpet- Peddamberpet-Turkayamanjil-Tukkuguda-Shamshabad.

Real estate prices up 40-125 % in 3 months. Driven by demand for quality office space, commercial property rates in Hyderabad have been on a northward spiral. Commercial real estate prices in the Pearl City have grown between 40% and 125% in the three-month period ended January 2007 as compared to almost flat growth in other IT hubs like Bangalore and Chennai during the period, according to a Cushman and Wakefield report as on January 2007.

For instance, in central business districts (CBD) like Begumpet and Raj Bhavan Road, price of office space has shot up by 40% in the three-month period ended January 2007 as compared to the rates in the previous three months. In posh suburbs like Banjara Hills and Jubilee Hills, closer to the IT hubs like Madhapur, Hitech City and Gachibowli, commercial property prices have gone up by almost 125%, according to the report.

Prices in most part of Bangalore including the CBDs and suburbs like Koramangala and Whitefield have mostly been flat in the said period. In Chennai, meanwhile, CBDs posted an average growth of 15% with suburbs like Guindy and OMR posting near stagnant growth. The shortage of readily available office space in Hyderabad, attributed to its relatively late entry in the IT space, could be the reasons for the sudden spate in rates, according to industry analysts.

“Readily available space is very essential for commercial ventures and since it is short in supply in Hyderabad, the demand for it naturally goes up resulting in higher prices. Once supply starts coming in, rates will eventually stabilise. The price escalation in Hyderabad will continue and is expected to minimise only after a year now,” reasons an analyst with a real estate tracking firm.

The supply scenario is also on the lower side in the city. While Bangalore and Chennai are expected to supply 16 million sq ft and 12 million sq ft office space in 2007, the availability in Hyderabad is estimated only at 3.8 million sq ft, which explains the acute shortage of quality office space in the city.

The rampant expansion by retail players is also adding to the supply constraint industry sources say. “Hyderabad is certainly on a high growth phase. But the overall growth is on a small base. Hyderabad today is what Bangalore was two to three years ago. So the growth seems huge,” points out Prakash Gurbaxani, CEO of VC backed realty firm, QVC Realty.

Economic Times

Fabcity - Recap of Last One Year and the Investment Prospects. Do not lose track and pick up waste-land, packaged as bits of gold!

Fabcity -Recap

The Project was formally awarded to Semindia in Feb 06. Since then, the Financial Closure of the US $ 3 billion project was affected due to lack of a bankable financial and tax structure.

India did not have any history in Semi Conductor Fabrication. Obviously the Country had no policy/plan to support development of Fab Industry. After lot of dithering, union govt. put in place a high powered committee, to draw up the policy and fiscal concession package. The draft was approved by Union Cabinet in Jan 2007. The exact numbers forming part of the concession package in now expected be released before Feb end.

The potential of the industry in generating large amount of jobs along few kilometer stretch of road at Srisailam high-way, had caused Real Estate developers to go berserk. Their over-drive resulted in delivery of thousands of sub-standard layouts scattered over 40 km !

By August 20006, the frenzy started wearing off but by that time developers had managed to hoodwink people to invest, in remote areas by painting rosy location maps !

Very few people have been able to make good investments, at the right locations.
Fabcity - Today

One year since the formal launch, the project has suddenly come to firm ground.

• Union Govt. has cleared the Semi Conductor Policy in Jan 07.
• The Fiscal Concession Package would be unveiled before Feb end.
• Environmental Clearance has been accorded to the Fabcity.
• Semindia has appointed Mr. BV Naidu former Director of STPI as its CMD for Fabcity.
• Former president of AMD India, Mr. Ajay Marathe has joined as Chief Operating Officer for Fabcity.
• The Fabcity site has been provided with excellent approach road, internal roads, water and power connections, already.
• Together with Fabcity, Mr. Jun Min’s Nanotech Park, also would start site operations expectedly in March 07.
• The Concession Package to be released before Feb end, is expected to be over and above the SEZ concessions as confirmed by Union MOS at the Vision Summit by ISA (Indian Semi Conductor Association) on 6th Feb, at Hyderabad.
• The consumption of electronic products in India is expected to grow to $363 billion by 2015, from $28 billion in 2005.
• The projected employment generation by 2016, is a staggering 40 Lakh jobs, by the industry.
• The industry has projected 10 Lakhs jobs to be created, in Hyderabad alone, by 2015!
• Semindia chief Mr.Vinod Agarwal and Nano Tech chief Mr. Jun Min are now discussing only finer points like bridging the gap in equity funding, if Govt. support is limited to 25% or lower, from expected levels of 30%.

Investment Opportunity With the looming prospect of huge employment generation on Srisailam Highway, there is obviously, MONEY TO BE MADE.

The Realtors have to do their job! They would buy wherever land is available cheap, package it by glossy brochures and incredible location maps! The period of Feb 06 to Aug 07 has seen NRIs falling for this in a big way. Throwing hard earned money into unproductive investments. Their sweat now supports business of thousands of developers! Even large developers on the back of their reputation had jumped-in, drawn by prospect of quick money. They have sold lakhs of square yards at unbelievable prices, at totally useless localities. Its unfortunate that people have fallen prey, to such designs.

Its important not to lose track and pick up waste-land packaged as bits of gold. This time round, lets evaluate locations with respect to real potential and expected time required to see actual resale. Its time to evaluate and invest, in the right location, without getting fooled by fancy location maps of developers!

Remember, a resale buyer would be more cautious than you! He is going to be very choosy! And he will have the entire menu spread out, to pick the most luscious bite!
Price Projection: Applicable only to recommended projects.

Location Hot Zone Facing SrisailamHighway
Month     Price
Feb 07     5700 to 6000/sqd
May 07   6500 to 7000/sqd
Jan 08    10000 to 12000/sqd
Note: The Jan08 price is subject to ORR work commencing by at least by Oct 07. The ORR, ICB is opening on 8th Feb 07. As per HUDA work will commence in May by the selected Contractors.

Location: Within 3Km of Highway with Fine Access
Month    Price
Feb 07    3700 to 4000/sqd
May 07   4500 to 5000/sqd
Jan 08    5500 to 6500/sqd
Note: The Jan08 price is subject to ORR work commencing by at least by Oct 07. The ORR, ICB is opening on 8th Feb 07. As per HUDA work will commence in May by the selected Contractors.

Location: HADA Projects near Srisailam Highway
Month     Price
Feb 07     9500 to10,000/sqd
May 07    12500 to 18000/sqd
Jan 08     18000 to 20000/sqd
Note: The Jan08 price is subject to ORR work commencing by at least by Oct 07. The ORR, ICB is opening on 8th Feb 07. As per HUDA work will commence in May by the selected Contractors.
Reasons- A new City is Evolving:

We need to first absorb the fact that the stretch of about 15Km from Airport Gate on Srisailam Highway would transform into a highly commercialized , buzzing city of its own, in the next few years. Apart from Fabcity/Nanotechpark/Hardware Park, several large SEZs are coming up in this City, capable of pulling in lakhs of highly paid workers from India and abroad. The City has fantastic access to Airport. Just 30 Km away would be its cousin (Hitec /Guchibowli) connected with one of the world’s best Freeways. The city would have residential complexes, highrise towers, multiplexes and malls! You find these evolving soon!

Price in this city and the rules of price- rise will be written by the magnitude and intensity of job creation there. The pricing CANNOT be compared to the prevailing prices in the center of Hyderabad, Hitec or Guchibowli.

Never get into the trap of saying “Oh! This can not be so high”…by comparing to price in some other place. Its fine to compare price in Kottur-Thimmappur and reject those areas out-right. Under no imagination should those areas have high prices. You have to reject, plot layouts asking for more than 2500/sqd, in those areas. It would take ages to see resale there.

But the rules of the game would be entirely different, on Srisailam Highway! Think of Tellapur /Nallagdla belt. Why has price risen to 15000 to 20000/sqd there? It’s the impact of upcoming employment generation at Guchibowli, which rewrote the pricing from 3000/sqd 2 years back to stunning levels now.

The same arithmetic would apply to Srisailam highway. Those who own plots in the best layouts, as close to highway, as possible, at the earliest, can enjoy the fruits of their wise decision! But if you invest foolishly in Panchayat Layouts, Bio-zone and all along Bangalore Highway beyond the ORR Junction, you would only end up gaping at friends, who make real money in the Hot Zone!

-ExclVentures

Cognizant will invest over $200 million in India through the end of 2008 to build new fully-owned techno campuses to seat over 30,000 new employess, R Chandrasekaran, president and managing director, Cognizant, tells TOI.

What are the emerging trends across all the verticals that the company works in?

There are three key trends that we are seeing which are drivers of our growth: Clients are looking for a broader range of services (including IT infrastructure services, BPO, data warehousing and business intelligence, ERP and CRM); industries beyond financial services such as pharmaceutical, telecommunication, media and entertainment are strategically embracing offshore; and Europe, specifically continental Europe, is opening up to offshoring at an accelerated pace. Financial services is the largest industry segment for Cognizant that represents 48 per cent of our overall revenue, followed by healthcare at 25 per cent, and manufacturing and retail together at 14 per cent. In Q4 2006, on a year-over-year basis, financial services grew 54 per cent, healthcare grew 99 per cent and manufacturing and retail grew 42 per cent clearly indicating a secular growth, although healthcare came in much stronger than we expected.

How much has the company invested in the country so far and how much is it expected to invest in the current year?

In Q4 2006, Cognizant announced plans to expand its infrastructure in India through an expansion of its existing real estate development programme. Through this programme, which includes the expenditure of over $200 million (approximately Rs 900 crore) through the end of 2008 on land acquisition, facilities construction and furnishing, Cognizant expects to build new fully owned techno-complexes in Chennai, Kolkata, Pune, Hyderabad and Coimbatore that will significantly increase Cognizant’s existing campus footprint in India with the addition of over three million square feet and capacity for over 30,000 new employees. For calendar 2007, Cognizant plans to add a net of 17,200 professionals globally to take our global headcount to at least 56,000 from 38,800 at the end of December 2006. Of this 17,200 net addition, over 85 percent of the hiring will happen in India. The India development centers are an integral part of Cognizant’s global development center model. The fact that 75 per cent of Cognizant’s headcount is in India among the highest in the toptier category clearly indicates its importance. Of our current global headcount of 40,000 professionals, over 30,000 are in India across Chennai, Kolkata, Pune, Bangalore, Hyderabad, Mumbai and Coimbatore. In Q4 2006, approximately 75 per cent of our effort came from India and the remaining 25 per cent from North America, Europe and Asia-Pacific regions.

What is the status of the new campus that is coming up in Hyderabad in the 40-acre land allotted by the AP government?

We just got our land allocation. Following this, Cognizant plans to invest over $200 million (approximately Rs 900 crore) through the end of 2008 on land acquisition, facilities construction and furnishing to build new fully owned techno-complexes in Chennai, Kolkata, Pune, Hyderabad and Coimbatore that will significantly increase Cognizant’s existing campus footprint in India with the addition of over three million square feet and capacity for over 30,000 new employees.

–ExclVentures

The excitement of rapid transformation in Guchibowli, has spread into neighbouring areas of Narsingi, Puppalaguda, Manikonda, Manchirevula, Gandipet, Kokapet etc. If you go in today (October 2006), as a casual vistor to these areas, you will only see green fields and and swaying palms. Its so calm, green and quiet! The imposing upcoming developments have virtually shaken up these sleeping localities, from within. Farmers have disappeared, leaving empty lands to developers and Realtors. The whole place is on fire! And raging, unseen! Two Lakh per acre rice fields, now quote Rs.15 Crores, an Acre.

The upcoming Business District at Manchirevula and Golden Mile at Kokapet has virtually fired up the real estate market. The proposed commercial developments are much larger than what we have seen at Guchibowli. The APIIC is promoting 60 Storey Twin Towers as international Business Center. The Charm of Express highway, now under construction is drawing developers, investors and commercial and IT establishments, like bees to honey sickle.

The Express Highway to Shamshabad Airport is cutting through these places. Moreover, the Outer Ring Road coming in from Patancheru, will join Express Highway at Narsingi. The imposing commercial ventures proposed here will see thousands of highly paid executives and business managers streaming in! To take care of their voracious appetite (we have already seen this VORACIOUS APPETITE at Guchibowli. where prices of premium flats were driven up from 900/SFT in the year 2000 to 3800/SFT in Oct 2006. Plot prices from a ridiculous Rs.1000/sqd to the astronomical Rs.25000/SQD!), developers have streamed into this new belt. Radha Realtors, Dhathri, Villa Green, Magadha, Rolling Meadows -12 Km from Kokapet etc are early movers, who allow you to buy early in these areas, to milk huge gains later!!