Real estate and hotels major Royal Palms will invest around Rs 600 crore (Rs 6 billion) to set up an IT/ITeS special economic zone in Mumbai that would be ready for occupation by end of next year. The company intends to develop the SEZ on a 26-acre land and would rent the space to 15-20 large and a host of small software firms.

The company has received both Central Government and state government  (empowered Group of Ministers) approvals for the IT SEZ, and is awaiting development commissioner's approval to commence work. Mumbai-based Hiranandani Builders had also sought approvals for setting up an SEZ for software and is awaiting a notification (approval under SEZ Act).

Confirming the development, Royal Palms Estates joint managing director Dilawar Nensey told Business Standard that " the SEZ will provide an opportunity to Mumbai-based unorganised IT players to use international standard facilities and common infrastructure benefits, helping in increasing software exports from the state".

Under the SEZ Policy, several financial and regulatory incentives would be provided to companies operating out of the SEZs by both the central and state governments. This would also help the companies improve their revenues and become competitive in global markets, he said.

Royal Palms is planning to build the SEZ under two phases, with a development of around 10 lakh square feet in the first phase and similar area in the second phase. Upon completion, it would be offered on rent to software companies.

Around 70 per cent of the total investment would be raised from internal accruals and promoter's stake, and the remaining through debt.

The SEZ that would come up in the north-western suburb of Goregaon and would have three buildings -- two 30 storey and one 20-storey structures.

Under the Phase-I, the company would provide 20,000 to 50,000 square feet of office space for 15-20 large firms and a host of smaller and start-up IT firms to set up office on its premises. The first phase will be completed by the end of 2008, and the second phase will commence thereafter.

Royal Palms has already roped in Singapore-based M A Architects to design and develop the project.

India's great rush for SEZs