City’s Fab dreams turn sour

Upset With Slow Progress, State Govt Tells SemIndia To Get Going Or Get Out

Hyderabad: In a last ditch effort to salvage the much delayed Fab City project, the state government has given an ultimatum to its promoter SemIndia to either get going on the project or pack up.

A ‘final’ meeting has been convened on Sunday by chief minister Y S Rajasekhara Reddy to iron out the issues and get the project back on rails. SemIndia president and CEO Vinod K Agarwal is scheduled to attend the meeting. But it is understood that the state government might agree to cough up a few more incentives to get the Fab City project off the ground.

At the last meeting between SemIndia and the state held on April 10, chief secretary J Harinarayan had told Agarwal that the company seeking further concessions could not be entertained. SemIndia had sought all the 1,200 acres of Fab City for itself, to which the state had said that SemIndia cannot be given more than 300 acres and that the decision was final.

Agarwal had also sought power concession at the rate of Rs 1.80 per unit for a period of 15 years. Although the state said it was ready to supply power at the rate sought by the promoter, it cannot be given for 15 years, SemIndia was told in the last meeting.

Now, however, with real estate developers pleading with the government to push through the project failing which huge investments are likely to be lost which in turn would affect the state’s economy on the larger scale, the state is likely to look afresh a new business plan to be presented by SemIndia wherein it has been asked to establish that the concessions hitherto offered by the state are inadequate, the sources said. “We are caught between the devil and the deep sea. It is high time SemIndia moves on the project failing which we want him to pack his bags and leave,” an official said.

The state had pulled off the Fab City coup by beating Bangalore in February last year. As per the MoU that was signed between the state and SemIndia, the promoter was to invest $3 billion in collaboration with the international chip major AMD. To be located in 1,200 acres in Maheshwaram mandal in Rangareddy district on the outskirts of the city, Fab City’s groundbreaking ceremony was to have happened in March last year but took place in June. SemIndia was to have invested $ one billion in the first phase and the remaining $2 billion in the second.

The entire project was to have come up in two years time. But the delay in the announcement of the semiconductor policy by the Centre, SemIndia’s hiccups in raising the finances and further concessions being sought by the promoter have flagged down the project.