PROJECT INFORMATION MEMORANDUM Manikanchan Phase II

WEST BENGAL INDUSTRIAL DEVELOPMENT CORPORATION LTD.

5, Council House Street, Kolkata - 700001

Manikanchan Phase II: Project Information Memorandum

TABLE OF CONTENTS
1. Introduction 1.1 1.2 1.3 Scope of the document Manikanchan SEZ The Gems and Jewellery Hub West Bengal Industrial Development Corporation Ltd.

2. Jewellery Processing in Maniknachan The Key Advantages 2.1 2.2 Rationale for Diamond Processing and Gold Jewellery Cutting Centre in Bengal SEZ Advantages

3. The Proposed Project 3.1 Site Details

4. Implementation Structure 4.1 4.2 4.3 4.4 4.5 Terms and Conditions Role of the Lessee Eligibility Bidding Process Evaluation Criteria

5. Contact Details

West Bengal Industrial Development Corporation Ltd.

Manikanchan Phase II: Project Information Memorandum

1.
1.1

INTRODUCTION
SCOPE OF THE DOCUMENT

This Project Information Memorandum relates to the Phase II expansion of the existing Manikanchan SEZ. The purpose of this document is to invite potential Anchor to take up space in this state of the art SEZ for setting up Diamond Processing Unit and/ or manufacturing unit of platinum/ silver/ gold jewellery which may inter alia includes any one or more unit of Diamond Studded Jewellery, Cast Jewellery, Machine Jewellery, Handcrafted Jewellery, Lifestyle Items etc.

The Objective of WBIDC is to build on the balance area to create around 400,000 sq. ft. in Phase II of Manikanchan SEZ for the purpose of accommodating more jewellery units.

The space is proposed to be allotted to the selected Anchor(s) on 99 year lease.

1.2 MANIKANCHAN SEZ THE GEMS AND JEWELLERY HUB

Manikanchan SEZ has the distinction of being the first Greenfield SEZ in India. It was conceptualised in the early 2000s and started operations from the year 2004. Its Common Facilities Building is also one of the architectural marvels of the city with its inverted diamond like shape. Total land area of more or less 3.67 acres had been utilized in Phase I for building one SDF building & one Common Facility Building along with common areas. The balance area of more or less 1.92 acres has been left vacant for Phase II Development. Manikanchan currently houses some of the most well known jewellery firms in the country such as Shree Ganesh Jewellery House, Shree Vinayak Jewellers, Senco Gold Jewellers, Zenith International and many others.

West Bengal Industrial Development Corporation through its continuous endeavor for developing industries in the state came up with the idea of developing this Park. The

primary aim for building Manikanchan was to give further fillip to the already booming
West Bengal Industrial Development Corporation Ltd.

Manikanchan Phase II: Project Information Memorandum

Gem and Jewellery industry in West Bengal. Moreover, West Bengal is a home to traditional gold and silver artisans who produce exquisite pieces of jewellery in the many jewellery centres in Mumbai and Gujrat. Although Bengal has always been a stronghold for Gems and Jewellery business but it was never an active export destination. But since Manikanchan became operational, West Bengal, especially Kolkata has become a major export hub in the country registering a volume of $932 million in 2008-09 ($654 million in 2007-08) - a growth of 43% as against the all-India growth of 1.45 % during the same period.
1.3 WEST BENGAL INDUSTRIAL DEVELOPMENT CORPORATION LTD.

WBIDC, formed in 1967, is the premier agency of the State's Commerce and Industries Department responsible for the development, growth, and facilitation of industry, investment and infrastructure in West Bengal, apart from its role as a financial institution for large and medium scale sectors. The Corporation is actively engaged in catalyzing investment through promotion/marketing of West Bengal as an investment destination, assisting in the implementation of projects through its 'Single Window Facility' called the 'State Investment Facilitation Centre' (SIFC).

West Bengal Industrial Development Corporation Ltd.

Manikanchan Phase II: Project Information Memorandum

2.

JEWELLERY PROCESSING IN MANIKANCHAN THE KEY ADVANTAGES

2.1

RATIONALE FOR DIAMOND PROCESSING AND GOLD JEWELLERY CUTTING CENTER IN BENGAL

The gems and jewellery industry in India is extremely disjointed with a large number of domestic private sector players. The country has around 450,000 goldsmiths, 100,000 gold jewellers, 6,000 diamond processors and 8,000 diamond jewellers.

However, with the increase of consumer consciousness, the future of organized retail in India is very encouraging. The organized sector of the gems and jewellery industry in India is estimated to grow at 40 per cent per annum to US$ 2.2 billion by 2010. The increasingly savvy Indian consumer is becoming partial to branded jewellery which is associated with better services, premium quality products and attractive exchange policy. The growing popularity of machine-made jewellery over traditional handcrafted jewellery is also spurring the growth of the organized retail segment.

The number of gold retailers in the country has increased by 40 per cent since the year 2000, with 150 domestic and over 65 internationally established brands. Faced with the changing dynamics, traditional jewellers are looking to jump on the "brandwagon" by investing in advertising and trying to build a presence in the minds of consumers.

Even though India is not producing diamonds anymore, but over the years it has emerged as a monopoly player in the sphere of diamond cutting and polishing in the world. The industry at present enjoys 60 per cent value share, 82 per cent carat share and 95 per cent share of the world market in terms of number of pieces. In other words, nearly 9 out of 10 diamonds sold worldwide are cut and polished in India. India exported cut and polished diamonds worth US$ 14.18 billion in 2007-08. Diamond cutting industry has also emerged as a major export element and accounted for 8% of total industrial exports. Realising this potential, most of the worlds premiere producing companies has opened their units in India who previously used to outsource this cutting process to India.
West Bengal Industrial Development Corporation Ltd.

Manikanchan Phase II: Project Information Memorandum

Indian artisans have been able to build a reputation for themselves over the years in both diamond cutting skill as well as intricate designing of gold jewelleries. In case of Diamond, Surat has over the years emerged as prime centre whereas Bengal holds the same position for Gold Jewellery. Bengal has traditionally been the hub of designing gems and jewelleries especially gold. Bengal has a rich and continuing tradition of craftsmanship for handmade jewellery. Jewellery from this part is famous throughout the world by the sobriquet Calcutta Jewellery for its intricate designs and quality of workmanship. Some of the most renowned Jewellery Houses based in Kolkata are P.C.Chandra Jewellers, Anjali Jewellers, Senco Gold, Chandrani Pearls etc. who are quite well known across the world and some of them have retail stores in various countries and almost all of them exports huge quantity of jewellery to US markets, UK markets and Middle East countries.

In recent years diamond cutting has also evolved strongly in West Bengal. Artisans from this part of the country are spread worldwide and revered for their cutting, polishing and processing skills. Since diamond cutting is a labour intensive industry with highly specialised skills, Bengal and artisans from Bengal have been fortunate to inherit this skill through generations. This makes them indispensable in such industries among which diamond cutting is foremost. Since diamond processing industry has remained largely confined to the western part of the country in places such as Surat, these artisans have to migrate to such places in search for work. These artisans will always be better off if they are offered work in Bengal closer to their homes. This will allow for a good supply of skilled artisans at reasonable price which will be a more cost effective price solution to the diamond processing entrepreneurs. The investor in Bengal has a win-win situation in this regard where he will get good quality artisans and also at reasonable price which will make the products more competitive in the market.

With the state of the art common facilities already available in the Manikanchan SEZ complex (refer Sec. 3.1 below) the anchor units would be able to leverage the present infrastructure and reduce start up operating expenses. This will enable them to design and structure the allotted space to their full advantage. Since Phase II is a new initiative by

West Bengal Industrial Development Corporation Ltd.

Manikanchan Phase II: Project Information Memorandum

WBIDC, the anchors would also be in a position to book space for their ancillaries under the same roof thereby ensuring effective linkages in the supply chain.

2.2

BENEFITS TO BE ENJOYED BY PROCESSING UNITS IN THE SEZ

Apart from the overall benefits of making available state-of-the-art infrastructure and access to well trained work force and more conducive working conditions, the framework of SEZ policy in India ensures the availability of a number of incentives and benefits to both the developer and the units set up in the SEZ. An overview of such benefits available to the units is summarized below: Imports and Exports License free imports. Exemption from customs duty on import of capital goods, raw materials, consumables, spares etc. Exemption from Central Excise duty on procurement of capital goods, raw materials, consumable spares etc. from the domestic market. Exemption from Custom/Excise Duty on goods for setting up units in the zone. Supplies from DTA to SEZ units will be treated as deemed exports. Reimbursement of duty paid on furnace oil, procured from domestic oil companies to SEZ units as per the rate of Drawback notified by the Directorate General of Foreign Trade. Re-export imported goods found defective, goods imported from foreign suppliers on loan basis. No routine examination by Customs of export and import cargo and no separate documentation. In house customs clearance.

Sales Tax Central Sales Tax paid will be reimbursed on domestic purchases.

West Bengal Industrial Development Corporation Ltd.

Manikanchan Phase II: Project Information Memorandum

Income Tax 100% income tax exemption for a block of five years, 50% tax exemptions for two years and up to 50% of the Profits ploughed back for next 3 years FDI 100% FDI in manufacturing, sector allowed through automatic route barring a few sectors. Forex Benefit Facility to retain 100% foreign exchange receipts in Exchange Earners Foreign Currency (EEFC) Account. Facility to realize and repatriate export proceeds within 12 months Profits allowed to be repatriated freely without any dividend balancing requirement

Other Key Benefits Write-off of unrealised export bills up to 5%. Commodity hedging by SEZ units permitted Domestic Sales on full duty subject to import policy in force. No fixed wastage norms. Full freedom for subcontracting including subcontracting abroad. Duty free goods to be utilized in 5 years. Job work on behalf of domestic exporters for direct export allowed. Exemption from electricity duty or taxes on sale of self generated or purchased electric power for use in the processing area All units in SEZ declared as public utility services Exemption of stamp duty and registration fees for purchase or lease of land or Purchase / lease of constructed/built up space Exemption from VAT on all inputs Waiver of requirement of municipal trade license Development Commissioner to be the Reconciliation Officer for all Labour disputes in SEZ and also issue Pollution Control Certificates.

West Bengal Industrial Development Corporation Ltd.

Manikanchan Phase II: Project Information Memorandum

3.

THE PROPOSED PROJECT

3.1

SITE DETAILS Site Location The exact location of Maniknahcan is 2234'45"N and 8825'52"E. The following satellite picture gives a good idea about the location of the SEZ in Kolkata.

Manikanchan and its Location with respect to major other Locations of Kolkata

Project Site

West Bengal Industrial Development Corporation Ltd.

Manikanchan Phase II: Project Information Memorandum CFB Building and SDF Building inside Manikanchan Complex Site Accessibility The site has got excellent connectivity and is located in one of the most well maintained and well planned part of the city of Kolkata. It is also very close to the New Town which is being developed as the Central Business District of Kolkata in future. The distance of the site from other important nearby locations, and administrative buildings of the city are given below: Sl. No. Locations 1. City Centre Kolkata 2. Rajarhat New Town 4. Dalhousie - Central Business District of Kolkata 3. Kolkata Airport 4. Kolkata Port 5. Sealdah Railway Station 6. Howrah Railway Station Source: Wikimapia Land Area The total area of the land is more or less 5.00 acres. Present Condition of the site Manikanchan Phase I was set up by WBIDC in the year 2003 04. Total land area of more or less 3.67 acres had been utilized in this Phase for building one SDF building & one Common Facility Building along with common areas. The balance area of more or less 1.92 acres has been left vacant for Phase II Development. Manikanchan is a fully integrated Gems & Jewellery SEZ with all vital services and logistic supports for the units being available in the centrally air-conditioned Common Facilities Building architectural splendor 6 storeys high, which has
-

Kms (approx) 2.6 1 8.4 8.6 8.8 6.1 12

Customs office Office of the Development Commissioner Specialized Courier Bank Branch Canalising Agents Business Centre Restaurant

West Bengal Industrial Development Corporation Ltd.

10

Manikanchan Phase II: Project Information Memorandum Exhibition cum Conference Hall A 912 sq. mt. air-conditioned open space hall with no pillars ideal for world class jewellery shows and exhibitions

The 7- Storey SDF building has 24 different modules of space. There is also one 2 storey building with a health centre, children's crche and canteen kitchen on the ground floor and dining room.

Other Common Amenities available within the SEZ area are:

High Security 30m high mast security lighting High security fencing surrounding the Park Constant monitoring of activities in CFB through CCTV Security rooms at all gates Excellent Power supply 9 Double feeder power supply from State Electricity Board to ensure good quality uninterrupted power. 9 3000 kVA dedicated fully-automated substation for quality power. 9 Supply with a hot stand-by transformer to ensure power supply in event of transformer failure.

Reliable Water supply 9 Abundant supply of water from deep tubewell 9 Pump house & reservoir with capacity equivalent to 1 day's consumption.

State of the art fire detection & fighting system 9 Automatic fire detection and alarm system 9 Photo-luminescent safety signage in common areas 9 Ring main around all buildings 9 32 zone fire panels to ensure timely detection of fire 9 Separate wet riser system & sprinkler system for SDF and CFB 9 Hook-up provision in the corridor area of every SDF module 9 Each SDF module has a conveniently located fire escape stairway

Elevators Sufficient area for Parking Concrete roads Dedicated telephone exchange in Park

West Bengal Industrial Development Corporation Ltd.

11

Manikanchan Phase II: Project Information Memorandum

Solid Waste Disposal Vat Sewerage Treatment Plant

Other Salient Features are: All building structures on pile foundations Extensive landscaped area Ground coverage of only 42% Vaastu Friendly building plan High quality project ensures low maintenance cost of project assets & services Quality Control Measures as per ISO standards Earthing & lightning protection system in Park as per IS code

West Bengal Industrial Development Corporation Ltd.

12

Manikanchan Phase II: Project Information Memorandum

4.

IMPLEMENTATION STRUCTURE

4.1

PROJECT DEVELOPER West Bengal Industrial Development Corporation Ltd. is the developer for the project.

4.2

Objective WBIDC invites Sealed Proposals from intending Applicants who will set up Diamond Processing Unit and/ or manufacturing unit of platinum/ silver/ gold jewellery which may inter alia includes any one or more unit of Diamond Studded Jewellery, Cast Jewellery, Machine Jewellery, Handcrafted Jewellery, Lifestyle Items etc. on a minimum 100000 sq.ft. built up space (Manufacturing Space) and set up and Operate/ Maintain a Training Center on 25000 sq.ft. in Manikanchan Phase II, Special Economic Zone, Kolkata. The Built up space of will be allotted to the Anchor Unit(s) on a 99 years lease.

4.3

ROLE OF LESSEE Set up and run the unit on the space allotted at his own cost and risk.

4.4

ELIGIBILITY

(a) Technical: The Applicant and Consortium Partner(s), if applicable should have minimum 3 years business experience in operation of Gems & Jewellery unit(s)/ Diamond Processing including cutting, polishing of raw diamond and its ancillary activities The Applicant and Consortium Partner(s), if applicable should be very experienced and possess established brands of Jewellery/ diamond items (b) Financial: The Applicant should have an average minimum turnover of Rs.250 crore in the last three financial years ending 31st March 2009 and minimum turnover of Rs.150 crores in each of the financial years. The Applicant should have a minimum Net Worth Rs.50 crore as on 31st March 2009

West Bengal Industrial Development Corporation Ltd.

13

Manikanchan Phase II: Project Information Memorandum

For computing the Turnover and Net Worth of the Applicant, the respective Turnover and Net Worth of the Consortium Partner(s), if any, shall be taken into consideration for assessing eligibility criteria.

Note: Further details of eligibility criteria are given in the RfP Document. 4.5 BIDDING PROCESS In order to select the Anchor Unit in the Manikanchan Phase II, WBIDC will undertake single stage bidding process. All the Applicants will have to submit an RfP document in two parts: Technical Proposal and Financial Proposal. Technical Bid will be opened first to shortlist Applicants. Financial Bid of only the shortlisted Applicants will be opened and the highest financial quote will be the benchmark price allotment of space in Phase II of Manikanchan SEZ. RfP Document should be downloaded from the website http//www.wbidc.com or www.srei.com. The cost for the document shall be Rs 25,000 (Rupees Twenty Five Thousand) only which shall have to be submitted in the form of DD / Pay Order drawn in favour of The Managing Director, West Bengal Industrial Development Corporation Ltd payable at Kolkata and submitted along with the proposal. Note: Further details are given in the RfP Document 4.6 EVALUATION CRITERIA The proposal of applicants satisfying the eligibility criteria and responsiveness test will be evaluated technically to determine the technical soundness of the Proposals. In order to reach such a determination, WBIDC will examine and compare the technical aspects of the Proposals on the basis of the information supplied by the Bidders. The evaluation of technical proposal will be on a pass / fail basis with due justification for each case.

Financial Bid will only be opened for those Bidders adjudged as responsive and qualifying as per the decision of the Authority. The highest quote for the Manufacturing Space and Training Space will become the deciding benchmark price for allotment.

West Bengal Industrial Development Corporation Ltd.

14

Manikanchan Phase II: Project Information Memorandum

5.

CONTACT DETAILS

Deputy General Manager, Special Projects, West Bengal Industrial Development Corpn Ltd, 5, Council House Street, Kolkata 700001. Tel: +91 33 2210-5361 -65/2248-6648 Mobile: 9831706772 Email: jayanta.chakraborty@wbidc.com

Chief Executive Officer, Bengal Srei Infrastructure Development Ltd., Trinity Plaza (5th Floor), 84/1A, Topsia Road (South), Kolkata 700046. Tel: +9133 3987 3917/3860 Mobile: 9830069788, 9830888419 Email: bengalsrei@srei.com

The Technical data and information provided in this document is only for providing general information and guidance to the potential Applicants. WBIDC or its Advisors and Consultants do not accept any responsibility or liability for its completeness and correctness, any errors, omissions, inaccuracies or errors of judgment with respect to information or data provided in this document. Prospective bidders should conduct their own investigation and analysis and check the accuracy, reliability and completeness of the information in this RfP and obtain independent advice from appropriate sources.

West Bengal Industrial Development Corporation Ltd.

15