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HCC's Rs 40k-cr Dholera waterfront city washed out

Source : BUSINESS_STANDARD
Last Updated: Fri, Feb 08, 2013 21:01 hrs
Hindustan Construction swings to loss, shares fall

Hindustan Construction Company (HCC), which missed its January 31 deadline for down payment of the 766 hectares allotted to it in the Dholera special investment region (SIR), has forfeited the land parcel.

The company had to make a Rs 92-crore down payment for land worth of Rs 300 crore.

However, HCC failed to meet the deadline, Dholera SIR Development Authority (DSIRDA) officials said.

An emailed query to HCC remained unanswered.

During the Vibrant Gujarat Summit 2009, the company had signed a memorandum of understanding (MoU) with the government to develop a waterfront city for Rs 40,000 crore.

In October 2011, DSIRDA had issued an offer letter to HCC for land allotment, which the company accepted in February 2012.

Despite the deadline being shifted from December 2012 to January 2013, HCC couldn't make the payment.

The port town of Dholera, 120 km south of Ahmedabad, is the first notified SIR in Gujarat, in which 60,000 hectares have been earmarked for industrial and commercial activities through the SIR Act, 2009.

"We had offered HCC about 766 hectares at Rs 400 a sq metre. They were supposed to make a down-payment of 30 per cent of the total land cost by January 31. However, now that they have missed the deadline, we have cancelled the allotment. We will look at other options for using the land," said K D Chandnani, chief executive officer, DSIRDA.

The state government may now consider offering the land to companies that signed fresh MoUs at the recently concluded Vibrant Gujarat Summit 2013.

"We will now offer the land at Rs 600 a sq metre," Chandnani said.

Government officials said the rate of Rs 400 a sq metre was considerably lower than the market rate of Rs 900-1,100 a sq metre.

The government had also offered land to two other companies - Greater Dholera Infracon (an arm of Singapore-based USEL Group) and Hotmail founder Sabeer Bhatia's Nano Works Developer Gujarat. The two companies, with HCC, were allotted 2,736 hectares at an estimated cumulative cost of about Rs 900 crore


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