Diamond Park: MP govt junks PPP route, may develop project on its own

  • Manoj Ahuja, Hindustan Times, Indore
  • Updated: Jun 17, 2016 19:40 IST

After two failed attempts to get a partner for developing the Gems and Jewellery Park on public-private partnership basis, the Madhya Pradesh government plans to develop the project on its own and then put it on lease to private companies.

Conceived more than 20 years ago, the Diamond Park project has faced hurdles all along the way. The government earmarked 118 hectares of land on outskirts of Indore, and a portion of the park’s land was notified as special economic zone.

Legal battle over land acquisition delayed the project in its initial stage

But a legal battle over land acquisition delayed the project in its initial stage. Even though the government managed to acquire land in 2011, the approval of detailed project report got delayed and then two tenders floated to rope in a developer failed flat.

‘Attempts to select a developer failed as gems and jewellery sector facing slowdown’

Officials in the industry department say the attempts to select a developer failed as gems and jewellery sector was facing slowdown since July 2014. But market has picked up since April, they said.

“The government is considering the option of developing the infrastructure on its own and then giving out the space on lease,” Audyogik Kendra Vikas Nigam (AKVN) managing director Kumar Purushottam told HT.

AKVN is the nodal agency for development of industrial infrastructure in Indore region.

As per official estimates, about Rs 160-170 crore is needed to develop the park. Sources said the government is considering whether to continue with SEZ status, or go for de-notification as non-SEZ industrial land makes it easier to market the project.

Purushottam said all options are open.

In 2008, AKVN had appointed a consultant to prepare a project report. But the then AKVN managing director GV Rashmi, in a letter, had stated that “the consultant’s report is irrelevant to the project and he has submitted false and inflated bills.”

The last time a company invested in the project was in 1996 when B Arun Kumar International (now Rosy Blue India) had deposited Rs 3 crore with the industry department. In 1997, when land acquisition got stuck in legal battle, the government not only refunded the principal amount but also paid an interest of about Rs 21 lakh, an RTI query reveal.

What went wrong?

A report, obtained through RTI, prepared in 2006 states, “it is certainly clear that the department without considered view, study and information from experts took the decision of land acquisition for establishment of Diamond Park in a hurried way. The file in which the decision was taken is ‘lost’, responsibility for which should be fixed.”

The government’s efforts to hard sell the project during the global investors’ summit in 2014 did not get success. Infrastructure was not ready back then. Now, the government plans to build the infrastructure first and then market the Park.

‘Project’s success will depend on availability of skilled manpower’

Experts say the project’s success will depend on the availability of skilled manpower. “It will face competition from existing diamond processing hubs, and the key to its success will be availability of skilled manpower,” Pithampur industry association president Gautam Kothari said. “The government needs to set up a skill development centre here.”

Surat Diamond Association president Dinesh Navadia told HT over phone that getting skilled workers was a challenge.“Demand (of diamonds) from the US and China has picked up after a prolonged slowdown.”

Sources said the government is considering a proposal from a diamond trading company in Gujarat to set a training institute at the proposed park.

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