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TN forced to improve infrastructure for SEZs

india Updated: Nov 21, 2006 19:50 IST
GC Shekhar
Highlight Story

Bringing foreign investors into the Special Economic Zones (SEZs) appears to be the easier part of the deal. Keeping them happy is turning out to be more difficult.

Even Tamil Nadu with a high growth index and decent infrastructure, is under severe pressure to improve its infrastructure. 

Chennai One is one of the largest software parks created by ETL Infrastructure Services Ltd on Chennai’s much touted IT superhighway. The massive SEZ facility, into which Tata Consultancy Services (TCS) has just moved is a spanking new world, where where a jog around a single floor would cover a distance of more than one km. It is an eco-friendly building that saves power, water, and is completely fire proof. 

But step out of Chennai One and right before it lies what is probably Chennai’s largest garbage dump. Reaching Chennai One too requires considerable driving skills, and -  if affordable! - amphibious vehicles to navigate through craters filled with rain water. 

"Things have to improve. But that is entirely in the hands of the civic authorities," shrugged V Thiagarajan Managing Director of ELTS.

Jukka Lehtela, director of Nokia's India operations observed that it would neither be profitable nor safe to transport 50,000 employees every day by road to and from their manufacturing unit in the coming years. 

"Even the four lane highway would be unable to cope with the increased traffic. The government should seriously think in terms of a railway corridor to service the industries on this belt. And we would not mind paying higher fare than others," he said.

Another sore point for the SEZs is that since they are allowed duty free import to set up their facilities and have been importing heavily, the Customs set up at Chennai airport is wholly inadequate and under prepared to handle the spurt in traffic. 

State IT secretary C Chandramouli assured that infrastructure issues were being addressed under the massive urban renewal plan. Building an arm of the  metro to serve the SEZ at Sriperumbudur is part of it.

The IT superhighway is getting a new head after the previous one failed to provide the right kind of impetus for such a prestigious project.

The government is also employing the tactic of weaning prospective investors away from Chennai realizing that the metro's capacity is creaking under the sudden load.

So when Feng Tai, a Taiwanese company wanted to set up its footwear unit, the state officials talked it out of its first choice of Chennai and instead made it locate at Cheyyar, 150 kms from the city, a backward region but closer to the leather processing belt.  

Similarly tier-two cities like Coimbatore, Tiruchy, Salem and even Tirunelveli are being pushed in a major way to ensure that the SEZ butter gets spread evenly while Chennai does is not overstretched.

Unless the speed at which SEZ approvals is matched by improving the groundwork at the actual locations India could discover that it has bitten more than it could chew of the SEZ pie.

The government is also employing the tactic of weaning prospective investors away from Chennai realizing that the metro's capacity is creaking under the sudden load.

So when Feng Tai, a Taiwanese company wanted to set up its footwear unit, the state officials talked it out of its first choice of Chennai and instead made it locate at Cheyyar, 150 kms from the city, a backward region but closer to the leather processing belt.

Similarly tier-two cities like Coimbatore, Tiruchy, Salem and even Tirunelveli are being pushed in a major way to ensure that the SEZ butter gets spread evenly while Chennai does is not overstretched.

Unless the speed at which SEZ approvals is matched by improving the groundwork at the actual locations, India could discover that it has bitten more than it could chew of the SEZ pie.

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