The Mukesh Ambani Group's SEZ Gambit

Mukesh Ambani group has set its sights on creating world class business and residential cities in the form of 4 intergrated SEZ. One of the flagship SEZ is being set up in Navi Mumbai - Maha Mumbai region which when complete will be comparabe with China’s Shenzhen. The investment in this project could well be more than the Rs 73,000-crore annual revenues of his flagship petrochemicals company, if one goes by the Rs 25,000-crore investment, both in the form of debt and equity, planned over a decade in just Navi and Maha Mumbai.

Salient Features of the SEZ plan:

No of Hubs - 4
Size - > 25000 acres each
Investment By Reliance - USD 50 bn in Navi and Maha Miumbai
Outside Investment (from business enterprises, the hotel industry, retail, healthcare etc ) - USD 50 bn
Deadline - 10 yrs for Navi and Maha Mumbai
Targeted users will include manufacturing industries as well as services like warehousing, BPO and biotechnology.

The group's estimate that the investemt of $5 bn will attract 10 times investment in the form of FDI is considered conservative since similar Chinese SEZs attracted FDI to the tume of 40 times the investment.

The proposed Sewri trans-harbour sea link is vital to fuel the growth of the Mukesh Ambani group’s Navi Mumbai SEZ — it will cut down the commute time from South Mumbai to Sewri from a couple of hours to just around 40 minutes

Roadblocks and Pit falls:

1. Unlike in China, the land acquisition in India is slow and lengthy process and land ownership is fragmented. In China all land is owned by the state.
2. How quickly the SEZ projects take off also depends on the government’s ability to execute infrastructure upgrade and attract foreign investment. A key driver of growth of Suzhou, another Chinese SEZ, has been its road and rail infrastructure, apart from access to airports and seaports along the southern coast. But, in India, much remains to be done in this regard.
With Ambani's prior experience in developing the 7400 acres Jamnagar refinery and the 140 acre Dhirubhai Ambani knowledge city, it seems that this venture in going to be another feather in Ambani group's cap.

Source - Businessworld