The Andhra Pradesh Industrial Infrastructure Corporation has begun scouting for a co-developer for Fab City. The corporation, which took the driver’s seat after the government cut SemIndia’s role, is believed to have proposed to leading “desi” developers of IT and infrastructure projects to study the feasibility of becoming a co-developer in the (SPV). Official sources told this correspondent that the APIIC sought feedback from companies Rahejas, DLF, L&T and promoters of Satyaveedu Special Economic Zone on becoming co-promoters. “The APIIC asked us to study the feasibility of becoming a co-promoter. It wanted us to study the market and other aspects. But it does not mean that we will be selected on a nomination basis,” a top executive from one of the developers said on condition of anonymity. Enquiries revealed that the developers were hesitant for various reasons including the high cost involved in infrastructure development. The Fab City SPV will be primarily engaged in infrastructure development which is expected to cost more than Rs 4,000 crores. “None of the developers have knowledge about the Fab industry and the risks involved as they have been handling only IT projects. Second, the return on investment largely depends on the Fab investors’ conditions,” another developer said adding that there were apprehensions that other investors would also press for free land like SemIndia. A section of officials also cautioned the APIIC against the reverse strategy of trying for international developers through “desi” ones. “In any infrastructure project, the international bidders choose their local partners. It is better for the APIIC to select the developer through bidding,” a senior official said. Any deviation from the process could lead to criticism that the government is turning Fab in to a real estate venture, he said.

India’s first special economic zone (SEZ) exclusively for IT and ITeS firms will be ready by November at Kokapet. leven firms have shown interest to set up their offices in the SEZ, being developed by the Hyderabad Urban Development Authority (Huda), on 125 acres. Approximate investment, including land cost for the SEZ, will be to the tune of Rs 805 crore.

Companies like Google, Patni, Sonata, Intelligroup, Conexant, C-Bay, Cognizant, Qualcomm, DQ Entertainment, Infinite and Tech Mahindra have paid Rs 25 lakh per acre for land and another Rs 25 lakh to Huda towards the development charges.

While Patni has been allotted 29 acres, Google got 24.21 acres. Cognizant and Tech Mahindra got about 10 acres each. Sonata, Qualcomm, CBay have been allotted eight acres each. Intelligroup, Conexant, Infinite got about fives acres and DQ was given 3.47 acres. The land would be leased out to the companies for a period of 20 years and lease agreements are expected to be executed in a couple of weeks.

Except one firm all software companies have paid land cost and development charges to Huda. Even the lone firm is expected to pay up in a week, Huda sources told TOI. “The Huda has finalised tenders for laying roads and providing other infrastructure. The SEZ will be ready in another six months,’’ Huda vice-chairman Jayesh Ranjan told TOI on Tuesday.

This SEZ was proposed to be set up at Poppalguda in Survey No. 452 and 454 and the IT department even issued a GO on June 19, 2006 for setting up the special zone. As some environmentalists raised objections over the project as the areas in a heritage and conservation zone, the SEZ was moved to Kokapet. The objection was some rocks are located in the area which were part of a heritage precincts. Later, the IT department shifted the SEZ to Kokapet by allotting 125 acres in Survey No 239 based on recommendation of Huda given in November, 2006. It took six months to invite firms and complete the procedures.

THE ANDHRA Pradesh State Investment Promotion Board (SIPB) headed by chief minister Y S Rajasekhara Reddy on Monday cleared the proposals of seven mega industries with an investment of over Rs 10,000 crore, reports Our Bureau from Hyderabad.

According to a statement from the chief minister’s office, the largest among these is the Rs 4,500-crore investment proposal by Brahmani Industries to set up a two-million tonne steel plant in Kadapa district. The plant will be set up in four phases. At the last stage, the project would have made an investment of Rs 20,000 crore with a capacity of 10 million tonnes and job potential for 10,000 people.

The other big proposal approved was by Solar Semiconductor that would set up a photovoltaic solar cell and PV solar module assembly line unit in the upcoming Fab City in Hyderabad with an investment of Rs 4,500 crore and employment potential for 5,000 people.

The SIPB also approved proposals like the Rs 400-crore alloy steel bar production unit with a 2.5-lakh tonne capacity by RKKR Steels at Nellore district, the Rs 100-crore maintenance repair and overhaul facility at the new Shamshabad international airport proposed by Lufthansa Technik, and a Rs 500-crore container glass unit with a capacity of 500 tonnes a year at Nalgonda district, planned by AGI Glaspac. The proposals by Amaravathi Textiles to set up a 1-lakh spindle spinning mill at Prakasam district at an investment of Rs 361 crore, and the one by MRF to establish a truck tyre unit at Medak district with an investment of Rs 300 crore were also cleared by the SIPB on Monday.

Hyderabad, May 19: As Chief Executive Officers (CEOs) of several US-based Information Technology companies have evinced interest in starting operations here, the State Government has speeded up its plans to construct the prestigious Fab City project on the city outskirts.

The civil works were likely to commence within a month and completed in six to seven months, Information Technology Minister R. Damodar Reddy stated at a news conference on Friday.

Fresh from a visit to the US, Mr. Reddy said his interaction with CEOs during the tour convinced him that over 200 IT companies were interested in setting up units here. The Government would extend all facilities to them and was even prepared to modify the IT policy to suit their requirements, he said.

Red tapism

The companies had raised minor problems related to red tapism that came in the way of investments in the State. They wanted single window system of clearances that would be considered. To listen to the grievances of the investing NRIs, Mr. Reddy said he would be available to them along with Advisor (IT), C.S. Rao, and senior officials here every Monday and Tuesday from 3 p.m. to 5 p.m. Their problems would be addressed instantly.

The Minister also said he had tried to clear the apprehensions of small and medium IT enterprises in US that incentives and subsidies in the sector were extended by the State Government only to mega projects. The Government had recognised the role of these enterprises in achieving its objective of generating employment for 2.5 lakh youth in the next two years.

He added that delegations of IT firms in US would visit the State in November to firm up their plans.

India’s first tryst with chip will begin next month when a consortium of non-resident Indians commence the construction on India’s first semiconductor fab at Hyderabad.

Also with this, one other chip manufacturing plant also is likely to be under way this year.

SemIndia, a private consortium of US based semiconductor entrepreneurs and the Government of Andhra Pradesh with the technology backing of AMD is building the fab at Hyderabad. Sandalwood Partners, a Silicon Valley venture capital firm that focuses on India, is a SemIndia investor. So is Singapore-based Flextronics International.

Andhra Pradesh Chief Minister YSR Reddy said, “We want to make this Fab City a world-class one.”

The fab here at Hyderabad will suffice the needs of India rolling out chips that will power all computers, mobile phones, high-end TVs and digital audios that are made in India.

According to Frost and Sullivan, India’s domestic electronics market is expected to be worth USD 363 billion in 2015 from just USD28 billion in 2005.

Thus, the race is on to build India’s first fab. SemIndia faces tough competition from Hindustan Semiconductor Manufacturing, or HSMC. It, in fact, could start construction in June. There’s another South Korean company that too is building a fab in India with second hand machines being shipped from South Korea.

HSMC topper Devendra Verma says, “The plan is for our first chips to come off the line in about 24 months. We’re working toward ground breaking in the next month or so.” German chip company Infineon backs HSMC.

Fab City could also help fabless chipmakers such as Nvidia and Xilinx who don’t own their own fabs but instead farm out the actual manufacturing to foundries. The first factories in Fab City will be foundries that contract their services.

The real impetus to India’s chip dream came in the form of tax incentives the central government decided to exempt fabs 20-25 per cent of the cost of chip factory.

Another reason is that India is a strong player in chip design. It was felt that a local foundry could supplement the designs being done in India.

Washington, May 10 (IANS) Visiting Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy has invited US companies to invest in his state, saying it would become digitally-driven with the setting up of the semiconductor manufacturing facility Fab City.

Speaking at the Indus Entrepreneurs (TIE) luncheon meeting at Santa Clara, California and a roundtable with CEOs of semiconductor companies at San Francisco Wednesday, he urged them to make Andhra Pradesh their Asia Pacific headquarters.
Inviting IT and semiconductor companies and other industries in the United States to invest, he said IT exports from Andhra Pradesh were expected to reach $4.5 billion this year.
Stating that 1,200 acres land has been provided for FAB City near the upcoming new international airport in Hyderabad, he said it would be developed as an integrated hub with multi-modal transportation, hi-speed custom clearances and a centre of manufacturing excellence in semiconductors and related eco-system.
‘We offer substantial incentives to the investing companies in the IT sector. I request the IT industry to avail of the opportunities,’ he said winding up his four-day visit to the United States.
Reddy said that semiconductor consumption in India was only $3 billion and was expected to touch $45 billion by 2015. ‘We hope to build a $10 to $12 billion manufacturing base in the entire food chain of semi-conductors,’ he added.
Reddy also invited investments in pharmaceuticals, biotechnology, agro-processing, mineral-based industries, engineering, hi-tech manufacturing, textiles, leather goods, tourism, gems and jewellery.
The chief minister said 53 Special Economic Zones (SEZs) in the private and public sector were coming up in Andhra Pradesh.
‘These SEZs are a combination of multi-product and product specific and provide very attractive incentives like tax holidays. I encourage you to avail of this opportunity lest you miss the boat,’ he told business leaders.
Highlighting the advantages of state capital Hyderabad, he pointed out that the World Bank report titled ‘Doing business in South Asia 2007′ rated it as the most business friendly city in the country.
‘We have most of the large enterprises from the US like IBM, Microsoft, Oracle, CA etc profiting from their decision to out locate to Andhra Pradesh,’ he said.