Sabeer Bhatia's Nano City may be scrapped

The Haryana State Industrial and Infrastructure Development Corporation on Friday recommended to scrap Hotmail founder Sabeer Bhatia's dream project Nano City for failing to set up the project in the state.

"We have recommended that the project (Nano City) be scrapped," HSIIDC managing director Rajiv Arora told PTI, when asked about the status of the Nano City project.

"The final decision on the (Nano City) project will be taken in the next meeting of Haryana Investment Promotion Board," he said.

HIPB is headed by Haryana Chief Minister Bhupinder Singh Hooda.

HSIIDC and promoter Sabeer Bhatia signed a memorandum of understanding in 2006 to set up a knowledge hub, Nano City, under the public-private partnership model, which was to be spread over 11,138 acres of land, covering 23 villages at Raipur Rani in Panchkula district of Haryana.

HSIIDC has 10 per cent sweat equity in this project.

Modelled on the Silicon Valley of the US, the project had entailed an investment of Rs 1,850 crore (Rs 18.5 billion).

An area of 5,000 acres was to be developed in the first phase and remaining in the second phase.

Expected to be completed in 10 years, the project seeked to attract world-class companies involved in creation of Intellectual Property, particularly those involved in software development, nano sciences, drug discovery, bio-technology, energy research and semiconductor research.

It would also boast of IT, University, Airport and Biotech.

However, the ambitious project could not take off as its promoters could not buy land from farmers at Raipur Rani in Panchkula, primarily because of high land prices.

Enraged over no work being done by Nano City promoters even after a span of four years, Haryana government had asked them last year to scale down the size of the project to develop it.

The state government had also asked the promoters to submit its revised business plans and acquire at least 500 acres of land.

Promoters of Nano City had also roped in real estate developer Parsvnath Developers Limited, which picked up 38 per cent stake in the project in July, 2008 and it had proposed investment of Rs 400 crore (Rs 4 billion) as equity and debt.

After the dilution of stake, Sabeer Bhatia was left with 52 per cent stake in the project.

Project promoters had even decided to raise funds through private equity placement, the funds of which were proposed to be utilised for acquiring land and development of project.

When contacted, Naval Bhatia, MD of SPV formed for Nano City feigned ignorance over the project being recommended to be scrapped.

"No. . .," he said when asked whether he knows the project has been recommended for being scrapped.

However, he said, "We are reducing the size of the land area for developing the project."

Image: Sabeer Bhatia