The Tata Economic Consultancy Services (Tecs), in its interim report has recommended the formulation of an Integrated Industrial Area and Infrastructure Development Act for the development of the proposed special economic zone (SEZ) at Dronagiri in Navi Mumbai.

TECS, which was appointed by the state-run City and Industrial Development Corporation (Cidco) to prepare an interim report on the viability and prospectus of the proposed SEZ, also recommends a separate section dedicated to tax holidays and tax break schemes, simple and effective regulatory mechanisms and the formation of a public-private partnership for the development of the proposed SEZ. The SEZ which is to come up in 704 hectares is expected to produce an output of $1.4 billion by 2008, according to the report.

The Cidco, which has been appointed as the nodal agency for the development of Dronagiri SEZ, will convene a round table conference on April 4 to discuss the recommendations of the Tecs report in the presence of Director General of Foreign Trade (DGFT) NL Lakhanpal and state chief secretary V Ranganathan.

According to Tecs, the formulation of Integrated Industrial Area and Infrastructure Development Act would provide the umbrella framework against which contractual concerns in relation to establishment of a joint venture and management of the SEZ can be addressed. It has recommended the formation of special purpose vehicle (SPV) to act as a town and country planning and development entity.

The legal empowerment of the SPV to undertake development could be through a contractual arrangement between the state government, Cidco and the SPV. Tecs has recommended that a new Lan Use Management Board should be designed and established for regulatory purpose. Tecs has suggested the extension of tax holiday scheme for 20 years with 100 per cent exemption facility for Dronagiri SEZ. It has also recommended automatic 100 per cent foreign direct investment (FDI) clearance to the entire range of activities perpetuated under the SEZ policy framework, taxable profits to be defined clearly to include profit both from domestic sale and exports and tax holiday/tax break scheme available under section 80 IA be extended to infrastructure established under the SEZ framework. Furthermore, the Tecs has called for an adoption of public private partnership structure for development and management of the Dronagiri SEZ.