Industries Department

POLICY NOTE - 2006-2007

 Demand No. 27

INTRODUCTION

The Government has a vision and a commitment.  The vision is to accelerate the rate of economic growth in Tamil Nadu by maximising investment in industry and infrastructure.  The objective is to give a boost to manufacturing, productivity, competitiveness and employment generation.  Emphasis will be  on enhancing the employability of the people and creating the right climate for all these to happen.  The potential of the services sector will also be harnessed fully for economic development of the State.  The commitment of the Government is to translate this vision into actuality within a time frame.

2. Accordingly, in the Budget speech for the year 2006-07, it has been announced that a new Industrial Policy will be announced in the current year, apart from setting up an Industrial Task Force under the Chairmanship of the Hon’ble Chief Minister.   The Task Force will not only focus on new initiatives but also address the problems of the existing industries.

3.  Chennai and its adjoining areas have become a major focal point in attracting new investments.  There are however infrastructure gaps which need to be addressed.  A High Level Committee has therefore been formed to identify infrastructure projects and to pursue implementation with the goal of transforming Chennai and its surroundings into a World class investment destination.  The other parts of the State will also receive equal attention.  Industrial hubs and IT Parks will be set up in Tier II cities.  The growth potential of the various regions will be fully harnessed.  For instance, the petroleum and natural gas resources in the eastern part of the State consisting of the erstwhile  Thanjavur and its nearby districts offer great opportunities.  Efforts will be made to tap these resources for meeting the energy requirements of the State and to set up gas based industries.  Similarly, industrial development will be speeded up by utilising the lignite resources in districts like Cuddalore and Perambalur through new investments.  The strengths of the farm sector, especially in areas like fruits and vegetables, can form the base for promotion of agro-base industries.  Above all these, the human resource of the State is the real asset.  Efforts will be made to make use of this strength to promote new investments.

4 This Government will adopt a new approach and with the help of Central Government departments and financial institutions, take steps to make Tamil Nadu attain expected Industrial progress.  Already with the help of Central Government,  more than 1600 Kms. of National Highway has been  strengthened and widened into four lane. Expansion of Chennai Airport, Ennore and Thoothukudi Ports have been planned.  The long cherished  project of Sethusamudram has also been launched and being speedily implemented.  However, this Government is not complacent with this position and  is taking steps to develop the infrastructure facilities. 

5. This Government in its previous tenure had introduced the Single Window System for expediting approvals and clearances.  A common application form was introduced in G.O.Ms.No.588 Inds.(MIB.I) Department dated 10.9.1998 for obtaining various clearances.  The position  will be reviewed and further simplification of  procedure will be explored and implemented.

6. The TIDEL Park set up at Taramani in Chennai during the previous tenure of this Government constituted the base for encouraging growth of Information  Technology.  The growth drive in this sector will be speeded up.  Hence, as announced in the Budget Speech for 2006 –07, a second TIDEL park will be established.

TAMIL NADU INDUSTRIAL DEVELOPMENT CORPORATION (TIDCO)

During the era of licensing and controls, Government had to play a major role in promoting industries.  Accordingly, the Tamil Nadu Industrial Development Corporation (TIDCO) was established as a Government of Tamil Nadu Enterprise in 1965 to promote large and medium scale industries in Tamil Nadu.  The method adopted by TIDCO is to set up new joint venture projects in the manufacturing sector in association with co-promoters from the private sector.  However, with the liberalization of industrial licensing and controls, TIDCO’s focus has now shifted more towards promoting infrastructure projects.  TIDCO identifies investments opportunities in the infrastructure sector and takes steps to implement such projects.  The TIDEL Park in Chennai and the East Coast Road from Chennai to Pondicherry are examples of this approach of TIDCO.    TIDCO has also supported ventures through venture capital funds set up in association with other financial institutions.

As a part of its focus on the infrastructure sector, TIDCO has set up the Tamil Nadu Road Development Company Limited (TNRDC), in the year 1998, as a joint venture with the IL & FS to promote roads based on collection of user charges.  After successful completion of the ECR, TNRDC has formed a subsidiary company namely IT Expressway Limited (ITEL) to implement the IT Corridor Project from Madyakailash in Chennai to Siruseri covering a distance of 20 Kms. and the ECR link road of 2.2 Kms.  The estimated cost of this project is Rs. 149 crores (excluding land cost ), which includes   Tamilnadu   Government    grant  of   Rs. 21.5  crores  and  ASIDE  grant    of    Rs. 12.5 crores. The work on this project had come to a standstill.  This Government on assumption of charge revived the project and works are now under execution.

To augment the oil refining capacity of the State, Nagarjuna Oil Corporation Ltd (NOCL) , a joint venture  of TIDCO & Nagarjuna Group was set up in  9.1.1998.   The company  is   constructing a 60 lakhs  tonnes per year capacity  of petroleum refinery project in Cuddalore  district with a total investment  of Rs. 4790 crores. This is the single largest joint venture investment ever in the State. The company has tied up the equity participation.  Industrial Development Bank of India has sanctioned term loans. The project construction would restart in September 2006.

TIDCO is also promoting industrial Parks and Special Economic Zones.  The Mahindra Industrial Park Project (now known as Mahindra World City) was launched in the year  1997-98 near Chengalpattu.  Similarly the  Ennore SEZ Co Ltd  ( ESCO) has been formed to implement a SEZ Project near Ennore. About 2500 acres of land adjoining the Ennore port  has been  earmarked for this SEZ  project. TIDCO has completed the Project Information Memorandum, topographical /contour surveys and soil  investigations. The cost of developing this SEZ has been estimated at   Rs. 900 crores. The target industries identified include Auto Ancillary, Finished Leather, Electronics, Apparels and Engineering Goods industries.  It is expected that this project will generate direct and indirect employment for about 50,000 persons in 7-8 years period.  The Government is taking steps to speed up the implementation of this project.

TIDCO has received “in-principle” approval from Government of India for establishing a multi product Special Economic Zone in an area of about 1055 Hectares in the Hosur and Denkanikotta taluks of Krishnagiri District in December 2005.  Market Survey and preliminary Feasibility Study for the proposed SEZ project has been completed. TIDCO has requested Government of Tamil Nadu for the issue of Administrative Sanction to acquire  and alienate the lands for this project. The cost of developing this SEZ has been estimated    as  Rs. 500 crores.  This SEZ is expected to generate employment for about 70,000 persons over 8-10 year period in IT / ITES, Pharmaceuticals, Apparels, Electronics and Food processing Industries.  The Government is now working on widening the scope of the project and restructuring the project company for speedy implementation.

Government of India is planning to establish Petroleum, Chemicals & Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR) in the country.   A detailed report on two candidate sites in Tamil Nadu  one in at Ennore area in Tiruvallur District and another in the Cuddalore District  has been submitted to the Department of Chemical & Petrochemicals, Government of India. The Hon’ble Chief Minister had addressed the concerned Hon’ble Union Minister for Chemicals, Fertilisers and Petrochemicals for selection of one of the sites.  Such a PCPIR when established  may attract investments in the    Petroleum and Petrochemicals sector upto about  Rs. 15,000 crores. 

There has been delay in the implementation of Hi-Tech Industrial Park at Nanguneri in Thirunelveli District.  Action is now being taken to implement the project  at a project cost of Rs. 640 crores.

On completion of First  Phase for 5,40,000 sq. ft, Ascendas IT Park   (Chennai ) Limited, a Joint Venture  Company  between TIDCO and Ascendas, Singapore has commenced work for second phase for construction of building for 7,30,000 sq.ft at an estimated cost  of Rs. 190 crores. This project is expected to be completed in 2007 and provide employment for about 8,000 persons.

Kanjamalai in Salem District and Kauthimalai/Vediappanmalai in Thiruvannamalai District have low grade iron ore deposits of 75 million tons and 35 million tons respectively.  A new escort sector company, viz., Tamil Nadu Iron Ore Mining Corporation Limited (TIMCO) was formed and a promoters Agreement  was signed by TIDCO with Jindal Vijayanagar Steel Limited to implement the projects at a cost of Rs. 400 crores for Iron Ore Mining,  Beneficiation and Pelletisation which will be used  as raw material for Sourthern Iron & Steel Company Limited, another Joint Venture Company of TIDCO. Government of India have been requested to accord necessary approval to mine iron ore in the land already identified including forest land.

STATE INDUSTRIES PROMOTION CORPORATION OF TAMIL NADU LIMITED

At a time when the Banking industry and the financial service sector had not fully developed, Government had to play an active role for speedy development in these areas to spur industrial growth. Thus, the State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT) was established in the year 1971, under the Companies Act.  SIPCOT was originally a term loan lending organization for large and medium industries. However, with changing times, term loan activities of SIPCOT have been transferred to TIIC. SIPCOT is now primarily concentrating on the following activities.

(a) Developing, Marketing and Maintaining Industrial  Complexes / Parks and Growth centers

(b) Implementing Infrastructure Development Schemes.

As the Term Loan activities were transfered to TIIC w.e.f 1.4.2000, SIPCOT is concentrating only on the servicing and recovery of the existing term loans. The details of area acquired, developed and sold upto 31.3.06 are given below –

Proposal for the year 2006-07