AP's Fab City is gone

DESARAJU SURYA
Hyderabad: Andhra Pradesh’s dream project, the Fab City is gone. The state government issued orders for resumption of 78 acres of land allotted to SemIndia Fab Pvt Ltd as it “failed to fulfill any of the obligations in bringing investment and creating employment” at the proposed Fab City near Hyderabad. Andhra Pradesh wanted to emerge as the largest cluster of semiconductor manufacturing and entered into a memorandum of understanding with SemIndia Fab Pvt Ltd as the anchor industry. It was allotted 100 acres of land in 2007 as an investment of 75 million USD was promised in the first phase for an assembling, testing, marketing and packing plant (ATMP) with an employment potential of 2,000 within 18 months. In the second phase, an investment of 750 million USD was promised for setting up semiconductor chip manufacturing facilities with an employment potential of 1,000. The third phase plan was for an investment of 2.25 billion USD for an advanced semiconductor plant with employment potential of 5,000.
State Industries Principal Secretary B Sam Bob noted that SemIndia Fab failed to implement the project within the timelines as stipulated in the MoU. Sem India, in reply to a notice issued by the Andhra Pradesh Industrial Infrastructure Corporation, the nodal agency for implementing the Fab City project, stated that it spent only about 55 crore on the project so far, including construction of a building. “Thus, admittedly, there is violation of terms and conditions of the orders issued by the government and it was not rectified in spite of intimations from the APIIC /Fab City SPV (India) Ltd,” Sam Bob pointed out. SemIndia Fab Pvt Ltd informed APIIC, in reply to a show-cause notice, that the recent financial crisis has impacted all major companies globally, including the Semiconductor and Electronics Systems-related companies, and it would be rather difficult for new green filed projects like theirs to implement projects as per the planned schedule. Accordingly, the Board of Fab City SPV (India) Limited decided to resume 78 acres of land from SemIndia Fab and also fix December 2010 as the deadline for implementation of the project in the reduced extent of 22 acres. The state government today granted permission to APIIC to resume the land. With the Fab project gone, four clean technology companies -- Solar Semiconductor, KSK Energy Venture Limited, XL Telecom and Energy Limited and Surana Ventures Limited – are currently setting up solar cells and photovoltaic modules manufacturing facilities.