Free Trade Warehousing Zones
BRIEF ON KANDLA FTWZ PROJECT
(1) Kandla Special Economic Zone (KASEZ) had allotted 100 acres land to IWKPDPL for the Kandla FTWZ project in March 2007 for a lease period of 30 years
(2) The land size was reduced from 100 acres to 75 acres with effect from March 3, 2010
(3) During 2009-2011, in spite of repeated rounds of tendering, selection of a strategic partner for commencing physical roll out of the project could not be successfully completed due to legal and technical issues.
(4) Board of Directors of FTWPL, in its Meeting held on Nov 30, 2012, approved the following :
(a) Implementation of Project in 3 Phases
(b) Implementation of Phase 1 by the Project SPV at the earliest with debt funding from IL&FS - Department of Commerce Fund (DoC Fund)
(5) IWKPDPL submitted its application to DoC Fund in April 2013 for consideration of debt funding.
(6) The Project Development Committee (PDC) meeting of DoC Fund was held on June 18, 2014 which considered the proposal for debt funding of Kandla FTWZ Project. After deliberation, the PDC chaired by Additional Secretary (Commerce) decided that it would not be advisable to take up any new project for funding under the DoC Fund and advised that since the project is now ready for implementation both MMTC and IL&FS shall explore other suitable source of funding either through equity or bank finance
(7) Subsequently, in the meeting between CMD (MMTC) and CEO, IL&FS on July 14, 2014, it was decided that the Project SPV shall complete the following works for which additional PDF contribution of ` 10 million each may be sought from MMTC and IL&FS IIDC Fund :
(a) Approval of master plan
(b) Site leveling and fencing
(c) Issue of EoI for lease of plots
(8) In July 2014, tenders were invited for site development activities and appointment of an Architect. Architect was appointed on Sep 4, 2014 and Site development activities commenced on 19 Sep,2014.
(9) The Board of Approvals (BoA) for SEZs, in its meeting held in Delhi on 18 Sep 2014, cancelled the formal approval granted to Project SPV which came into our knowledge on Sep 26, 2014. The cancellation was done on the grounds that SPV has failed to make any satisfactory progress for developing the Project. However, no notice was issued to the SPV in this regard, nor any opportunity extended for a submission in the matter.
(10) Statutory appeal was filed before the BoA in Oct 2014 for restoration of the Co-developer approval. The appeal was favourably considered by the Board in its meeting held on 19 May 2015. The decision was notified through minutes issued in the third week of June 2015. During the interregnum period of Oct 2014 – June 2015, IWKPDPL was not allowed access to the land and hence no project development activities could be carried out.
(11) After restoration of co-developer approval, KASEZ Authority was approached for approval of Master Plan. The approval was granted on 05 Jan 2016.
(12) Immediately thereafter, the site development activities re-commenced. The following works were completed by 30 Jun 2016.
- Clearing of vegetation and levelling of land
- Demarcation and construction of Sub-base layer of 2.8 km roads (0.5 km of road was completed till final layer)
- Boundary wall for the FTWZ
- Common User Facility (with workstations and conference facility)
- Horticulture works
(13) On 07 June 2016, KASEZ Authority has approved the sub-leasing rates for developed plots. Two plots totalling 2.75 acres (out of 40 plots) have also been leased out (out of the total leasable area of 57 acres). One more plot measuring 3600 sq mtrs is being sub-leased. Efforts are being made to sub-lease the remaining plots.
(14) The Board of FTWPL, in its meeting on 29 Aug 2016 has also approved a business plan for starting an FTWZ Unit on its own, for leasing to third party clients. Preparatory activities for registration of FTWZ unit and construction of warehousing infrastructure is currently underway
(15) The application of Project SPV for establishing a Unit is approved by DC, KASEZ in its meeting held on 15.11.16. Architect for providing design services for Closed Warehouse has been appointed on 23.12.16. The empanelment process for construction contractors for construction of warehouses is in progress.
(16) On Oct 25, 2016 HDFC Bank has given in-principle approval for extending credit facility for Rs.27 crores (which will be given in 3 phases).
(1) In 2005, MMTC Limited and IL&FS Ltd decided to jointly develop Free Trade Warehousing Zones in different locations of the country. An equal Joint Venture, namely Free Trade Warehousing Private Ltd (FTWPL) was incorporated in March 2005
(2) One of the identified locations for setting up FTWZ was Haldia in West Bengal. For this purpose, a 100% subsidiary of FTWPL was incorporated, namely Haldia Free Trade Warehousing Private Ltd (HFTWPL)
(3) Board of Approvals (BoA) for SEZs, Govt of India accorded in-principle approval for setting up the Haldia FTWZ in 2008
(4) Haldia Development Authority (HDA) allotted 200 acres of land for the project in 2008. However, the lease deed for land was not executed at the time of allotment
(5) Due to changes in State Govt policy on SEZs, HFTWPL decided to develop the Project as a Cargo Hub in the Domestic Tariff Area, and outside the purview of SEZ Act 2005
(6) GoWB vide its letter no. 752-T C&P/C-2/IH8/2007 dated April 23, 2013 granted approval for execution of lease deed for 197.84 acres of land in Mouza Chakdwipa, Dist Purba Medinipur
(7) The lease deed was executed on Dec 16, 2013 and the foundation stone for the project was laid on Feb 22, 2014 by Hon’ble Chairman, HDA
(8) The construction of Boundary wall commenced in April 2014. Soon after the commencement of work, local villagers objected to the constructions. However, the same was resolved through discussions and work gathered pace.
(9) By Feb 2015, 3000 metres of the boundary wall was constructed. At this stage, some of the erstwhile land owners, filed Writ Petition in the Calcutta High Court, challenging the land acquisition process held in 2005-06.
(10) The Hon’ble High Court, in its interim order has granted stay against dispossession on the land. However, the entire land is already in the possession of FTWPL. To prevent local unrest and as a matter of abundant precaution, the construction of balance 1200 metres of boundary wall was suspended.
(11) The Writ Petition is pending in the Calcutta High Court for deciding the admissibility and is appearing in the Cause List. However, due to pendency of matters, the Petition is yet to be taken up for hearing, though written submissions have been filed by all parties.
(12) In July 2016, the Project SPV moved an application for Urgent Hearing of the Petition. The Petition has been allowed by the Court on 05 Aug 2016. Due to huge pendency of litigation, the Petition is yet to be taken up for hearing.
(13) An amount of Rs 36 crore has already been paid to HDA as upfront payment for lease rentals and a further amount of Rs 3 crores has been spent on construction of boundary wall.