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L&T, Shirke, Shapoorji Pallonji in race for Rs 700-mn gem and jewellery park at Hyderabad

Syed Amin Jafri in Hyderabad

Larsen & Toubro, Shapoorji Pallonji, B G Shirke and the Hyderabad-based GS Group are in the race for setting up a world-class Gem & Jewellery Park in Hyderabad.

The state-owned Andhra Pradesh State Trading Corporation, which is co-promoting the Rs 700-million project, has convened a meeting here on August 3 to evaluate the offers made by the four companies and finalise the partner for executing the ambitious project. The foundation for the project will be laid in September and the complex will be ready in 24 months' time.

Giving details of the project, APSTC managing director S Balasubrahmanyam says that the APSTC has received offer of interest from the four companies in response to the invitation of bids from interested parties with turnover of Rs 2.5 billion or more.

The promotion of the gem and jewellery park is aimed at making Hyderabad a hub for exports of jewellery and processed diamonds and give fillip to local artisans. The park will bring back recognition to this historic city which, in the bygone area, achieved global fame as the Kohinoor diamond that adorns the crown of the British queen was mined in the Golconda kingdom.

The Rs 700-million project will be financed with a debt-equity ratio of 2:1. The APSTC will contribute Rs 25.9 million towards equity and the land cost of Rs 54.1 million will be treated as interest-bearing loan. A special purpose vehicle will be promoted by the APSTC and co-promoter for implementing the project on a build and operate basis.

The park will be located on a four-acre site in the upmarket Banjara Hills area. It will have 300-odd shops which will be allotted to gem and jewellery manufacturers from across the world. The proposed park has received enthusiastic response as 70 jewellery firms have already requested for allotment of space in the complex.

The Andhra Pradesh has enlisted the support of the Gem and Jewellery Council of India, Mumbai and the AP Jewellery Association. The Indian government is being approached to accord special export zone status for the park so that the units located there are provided tax exemption and other incentives.

Hyderabad already has an apparel park, an IT park (Hitec City) and a knowledge park. Shapoorji Pallonji is setting up a biotech park in collaboration with the state government. Since Hyderabad is famous all over India as the 'pearl city', Chief Minister N Chandrababu Naidu is keen to add "glitter" to this happening city.

The state-of-the-art Gem & Jewellery Park will export not only processed stones but also value-added designer jewellery to lucrative international markets. "The idea behind this park is to garner part of the booming gems and jewellery export business in the country," says Balasubrahmanyam.

India clocked exports of gems and jewellery worth Rs 330 billion in financial year 1999-2000 and over Rs 350 billion in the year 2000-01. However, Andhra Pradesh accounted for a miniscule share of Rs 700 million and Rs 800 million respectively in these two years, comprising exquisite jewellery, pearls and filigree work.

"Once the park comes up, we hope to increase these exports from the state to Rs 10 billion in a couple of years and Rs 20 billion within five years," Subrahmanyam points out.

With the modest beginnings, Hyderabad is expected to join the big league of cities like Antwerp, New York, Tel Aviv, Singapore and Mumbai on the world map of gem and jewellery trade. Of the 100 million carats of gem quality diamonds produced every year, about half are processed in India and are again exported back to USA, South Africa, Europe, Singapore etc. Mumbai ranks first in the country with gems and jewellery exports of Rs 200 billion per annum.

The proposed park will have a built-up area of 3,59,805 square feet consisting of six floors. The government has allotted 2,05,603 sq ft of land at Road No 10, Banjara Hills for the complex. The 100 per cent export-oriented jewellery manufacturing and diamond processing complex will be an export house with international standards, specifically delineated duty-free enclave.

The park will have single window clearance for licences, procedures, rationalisation of terms, forms and specifications.

The park will have conference halls, exhibition stalls, mini auditoria and banks so that all the facilities are offered under one-roof. The facilities for entrepreneurs include web kiosks and portals, training facilities, fool-proof security, optic fibre connectivity and uninterrupted power supply.

The APSTC is acquiring another 20 acres near the park to build housing facilities for the 2,000-odd artisans expected to work in the park.

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