When the real estate market in Indore was looking up in the mid-2000s, many developers had launched integrated township projects with special economic zones (SEZs) and office complexes.
However, 10 years down the line, most SEZ projects have failed to take off even as the residential townships have been completed. In fact, most of the SEZ projects have been shelved, including those announced by the national-level players.
Even as the property market is showing signs of revival, the companies are in no mood to develop the SEZ. Experts say the economic slowdown coupled with the shortage of funds had prompted developers to shelve the SEZ projects.
"SEZ projects were announced when the economy and the property market were booming. However, once the downward cycle started, the scenario changed and the developers started facing a cash crunch. The SEZ projects were no longer commercially viable," said property consultant Pratik Gandhi.
Delhi-based Omaxe Housing and Developers Ltd had proposed to set up a multi-product SEZ in Indore when it had announced the launch of its Indore township project in 2005. However, while the company has developed residential townships, it has shelved the SEZ project.
"SEZs started losing sheen after the global economic meltdown and the imposition of minimum alternate tax (MAT)," said an official of Omaxe Indore regional office. He added: "I am not aware of any immediate plans to launch a SEZ in Indore." Omaxe is not the only developer to drop its plan for the SEZ.
Delhi-based Parsvnath Developers Ltd had proposed to set up an IT SEZ at its integrated township in Indore. The company was to invest Rs 243 crore on the project. However, the project was shelved after the downtrend in the property market.
In a similar turn of events, Mumbai-based Zoom Developers, which had planned to invest Rs 1,000 crore over a three-year period to construct a 100 hectare IT SEZ in Indore, dropped its plan after the economic slowdown in 2009.