Reliance signs India's biggest SEZ deal with Haryana

Haryana Economy

Reliance Industries and the Haryana government formally inked a joint venture agreement to set up what is touted to be India's biggest SEZ project.

Facts :

The Rs 40,000-crore project, comprising a cargo airport and a 2,000-MW gas-based power plant, will be spread over about 25,000 acres in the Gurgaon and Jhajjar districts of the state.
The agreement was signed here by Rajiv Arora, MD, Haryana State Industrial and Infrastructure Development Corporation (HSIIDC), and Anand Jain, director, Reliance Ventures, in the presence of RIL chairman Mukesh Ambani.
This is the first time Reliance has committed such a big investment outside Western India.
Mr Ambani said, we will get the best of the Fortune 500 companies here. The aim is to set up an aggregation hub that is beneficial not only for Haryana but also for North India.
The deal took shape in 2005 when RIL signed an MoU with HSIIDC. However, uncertainty had dogged the project as the land acquisition process had run into political turbulence.
A special purpose vehicle called Reliance Haryana has already been floated to set up the project.
Initially, around 1,395 acres, which has been acquired by HSIIDC near Garhi Harsaru village in Gurgaon, would be transferred to Reliance.
In return, HSIIDC would get the total cost of acquisition (plus capitalised interest at 9% per annum) and the administrative cost (15% of the total cost of acquisition).
This would entitle HSIIDC for an amount of Rs 360 crore as against Rs 300 crore paid by it for acquiring the land. It would also get sweat equity without any investment at 10% of the total equity.

Analysis :

The SEZ would be an exemplar of excellence and would be comparable to the best of the SEZs in countries like China, Malaysia and Singapore.
There is a lot of lament about India's poor infrastructure. This project would show how we can develop world class facilities by adapting the public private partnership model.
According to HSIIDC, the project involves an initial investment of Rs 40,000 crore, and on completion it would generate an annual revenue of Rs 10,000 crore (this is half of Haryana's current total annual revenue).
It would provide direct and indirect employment to around five lakh people and the process area of the SEZ would generate an annual turnover of Rs 1,00,000 crore.
This agreement signifies is the long commitment of Reliance towards investing in Haryana.