Encouraged by the response from industrial houses,the state government has raised the land prices in Sanand GIDC,which is home to Tata Nano,by about 20%.
The hike in prices comes after several high-profile companies like Ford,Peugeot,Colgate and Bosch have followed Tata Motors into Sanand and set up bases in this industrial cluster located 40 kilometers from Ahmedabad.
The Gujarat Industrial Development Corporation (GIDC) has increased the land prices here to Rs 3,225 per square metre from Rs 2,600/sqm,making Sanand GIDC the most expensive industrial cluster in the state. Post-hike,any industry buying land here will have to shell out at least Rs 25 lakh more for every acre of land.
There has been a healthy response from the industry (for purchase of land at Sanand GIDC). We decided to increase the prices after making some calculations, B B Swain,vice-chairman and managing director of GIDC,told The Indian Express.
This is the first hike in land prices since Tatas shifted their Nano plant to Sanand three years ago.
In spite of the increase,GIDC land within Sanand continues to be cheaper compared to those sourced from private land-holders like farmers or land traders. While an acre of land in Sanand GIDC costs Rs 1.3 crore (post-hike),private land could cost as much as Rs 3 crore,especially those near the Tata Nano plant.
The hike makes Sanand GIDC the most expensive industrial cluster in Gujarat, says Nirav Kothary,an expert on industrial real estate at Jones Lang LaSalle (JLL),a global property consultant.
Kothary warned that the move to raise land prices could also backfire. There is a danger that the hike in land prices could make investments in Sanand unviable for smaller companies having limited capital. Cost of land,preferential location charges,stamp duty and registration fees tend to weigh heavy on a smaller firm, he added.
In the first phase,GIDC has already acquired 3,700 acres of land in Sanand. About 80% of this land has already been allocated to different industries while GIDC has started the acquisition process for the second phase, sources said.
Before Nano came in,the GIDC had a tough time hard-selling the industrial cluster. The state government in 1984 had established a mini-GIDC that began with a few units at Sanand. Lack of basic internal infrastructure and paucity of manpower were two main hurdles.
Before 2008,even the secondary sector of Sanand town had only 40 small to medium scale rice mills and about seven chemical manufacturing units,sources in GIDC said.
Today, as per official figures of year 2011,there are about 147 large industries in Sanand taluka,having a total investments of over Rs 171,000 crore.
The proximity to the Delhi-Mumbai Industrial Corridor (DMIC) and the urban settlement of Ahmedabad city has added to the allure of Sanand.
Among the recent entrants in Sanand is Nestle India,which is setting up a snacks and confectionery plant. The government has also given nod to projects of Hyundai Engineering,Hitachi Hi-Rel,Tbea,Corning,Allied Minerals and Bosch on the Sanand belt. prices at Dahej GIDC up by 30 per cent
The GIDC has also increased the prices of the industrial cluster at Dahej by about 30%. The prices have been raised to Rs 1,020 per square metre from Rs 750. This region in Bharuch district is one of the fastest developing industrial nodes in the state.