The park is expected to be completed by January 2006. According to Ayodhyarami Reddy, chairman of Ramky Group, the developer of the project, pharmaceutical majors including Novartis, Sembcorp and Pfizer have already evinced interest to set up their facilities in the park.
Out of the total investments, local companies represented by the State Bulk Drug Manufacturers Association are expected to invest over Rs 500 crore (Rs 5 billion) in their new and expansion operations to be set up in the project.
According to the association representatives, about 40 members have booked their plots in the 450-acre land that was specially earmarked for BDMA members at concessional rates in the Pharma City project.
The project is being developed at a cost of Rs 210 crore (Rs 2.1 billion). Besides, the developer will have to pay Rs 4 lakh per acre towards land cost to the state-owned Andhra Pradesh Industrial Infrastructure Corporation, which has an 11 per cent stake in the project.
The remaining 89 per cent equity is held by the developer on a build-own-operatebasis.
While the price fixed by the developer stood at Rs 21 lakh per acre, the state government has ensured a Rs 7-lakh concession to the local manufacturers, besides earmarking 450 acres of land to them.
An agreement to this effect was signed between the developer and the association in the presence of B Satyanarayana, minister for major industries, in Hyderabad on Friday.
The premium on the actual maintenance cost to be incurred by the developer on various common facilities has also been reduced to 15 per cent from 22 per cent, the minister said at a press conference.
The state government has also exempted 50 per cent of the land conversion charges payable to Visakhapatnam Urban Development Authority by the developer.
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