The government of Telangana has formed a Special Purpose Vehicle (SPV) to expedite construction of Pharmacity on the outskirts of Hyderabad. As part of this initiative, the government is roping in private players to take part in the construction process.
As declared last year, the state government of Telangana has decided to construct an integrated Pharmacity of international standard for which more than 12,000 acres of land has been demarcated on the outskirts of Hyderabad. However, earlier, the government had thought of building the Pharmacity on a public-private partnership (PPP) mode, but now it has changed its strategy and now it wants to rope in private players for developing the Pharmacity.
“Earlier, some portion of land had already been acquired and given to Telangana State Industries Infrastructure Development Corporation (TSIIDC) for the development of roads, drainage, power lines and other facilities. However, now the government wants to speed up the development process and has decided to move away from PPP mode to complete privatization and has formed an SPV by roping in private players. This SPV will now be registered as a private limited company,” informed a senior official from TSIIDC.
The main reason for the government to change the mode of development from PPP to SPV is because of the financial crunch it is facing during the past few months. With the central government demonetizing the higher denomination notes of Rs.500 and Rs.1000, this crunch is further aggravated and to overcome this, the minister for industries and municipal administration and urban development K. Taraka Rama Rao has decided to rope in the private players to take part in the construction of the Pharmacity.
As part of the SPV, now the funds for development of infrastructure for Pharmacity will be mobilized from private investors, while acquisition of land and payment of compensation to land owners will be done by the government.
However, the state government had also got the central government’s approval to accord Pharmacity as National Investment and Manufacturing Zone (NIMZ) status. This is going to further boost the prospects of private investments into the Pharmacity.
To speed up and accelerate the pace of development in the Pharmacity, industries minister’s efforts are commendable. He has been playing a crucial role in getting faster approvals and clearances from the Union commerce ministry. Recently the government has set up a world class common effluent treatment plant with a cost of Rs.1,500 crore in the Pharmacity.