A free trade and warehousing zone (FTWZ) has been proposed to be set up by the Visakhapatnam Port Trust near the port exim park near the airport. The FTWZ, which will be spread across 106 acres, will be considered a special economic zone governed under the 2001 SEZ Act and SEZ rules, 2006.
“The project will cost around Rs 500 crore, most of which is expected to be funded by the VPT and Sagarmala Development Corporation Ltd (SDCL). A draft DPR for the same was prepared by the Indian Ports Association on January 2,” a senior port official said.
VPT deputy chairman PL Haranadh confirmed the development. “We have already formulated a DPR, and a SPV will be formulated a DPR, and a SPV will be formed soon. Once that happens, we can fix a timeline for the project,” he told.
FTWZ is designated as a deemed foreign territory and is envisaged to be integrated zones to be used as international trading hubs. FTWZ status allows units to provide value added services to customers including packing, re-packing, labelling, knitting and bundling among other services . Thus, the zones could act as consolidation or distribution hubs for foreign and Indian clients alike.
As per the initial blueprint, land utilisation has been divided into three parts: Processing zone, non-processing zone and infrastructure-related land in the ratio of 69:12:19, an official said.
“Processing zone would primarily include warehousing zones of various kinds. The infrastructure zone would have roads and drainage facilities. The non-processing zone will comprise facilities such as power, fire, restrooms, green belt, truck terminal, office space and miscellaneous functions,” the officer added.
SDCL is expected to invest around Rs 240 crore towards infrastructure and other work related to the project. Both VPT and SDCL will form an special purpose vehicle (SPV) which will invest around Rs 110 crore to run the facility and retain earnings from the project. The cost of land provided by VPT is Rs 150 crore.
“As per proposal, road shows and awareness campaigns will be conducted to pick up the demand of the FTWZ. It’s animportant project because the region lacks any facility of this nature,” an official pointed out.