Infosys gets co-developer status in MIHAN SEZ

Friday, 30 March 2012 12:00 Vinit Taori Nagpur City - News & Analysis

IT major Infosys Limited has secured the approval to become a co-developer in the MIHAN special economic zone (SEZ).

Investors in a SEZ can be broadly divided into two categories - co-developers and units. The former can acquire land from the developer MADC (Maharashtra Airport Development Company in this case), set up the infrastructure and let it out to other firms. The latter can either acquire land directly for themselves or use space provided by a co-developer.

The other co-developers in Mihan are DLF, Shaporjee Pallonjee, and other such units which have planned an IT park. Such entities will have to look for units willing to start operations on their premises, instead of starting on their own. But, Infosys is the only company in Mihan that plans to acquire land for its own use and also have co-developer status, as reported.

The approval was granted by the board of approvals (BoA) in the ministry of commerce during its meeting on March 13. Infosys plans to acquire 140 acres of land, with plans to initially invest over 100 crore and create a couple of thousand jobs. Once the formal letter is received, MADC plans to sign the final lease deed with Infosys.

Being a co-developer has its own advantages. Unlike a unit, a co-developer does not have to meet the net foreign exchange earning obligations, which means it does not have to worry about generating enough exports. A unit that has taken up space in a co-developer's premises has to meet the condition, said a senior official in the ministry of commerce.

MADC vice-chairman-cum-managing director UPS Madan, who confirmed Infosys' co-developer status, said even as the ministry does not lay down a time limit, this company's agreement with the IT major does. Infosys will have to come up with a unit in three years, and it may let out the space to its subsidiary but not a third party altogether, he said.