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Russian Sukhoi and Malaysian SKS Ventures offer Rs54,320 crore investments at Nagpur's MIHAN facility news
27 September 2008

Nagpur: Famed Russian aircraft designer and manufacturer Sukhoi and Malaysia-based SKS Ventures, a diversified Group involved with power and energy sectors among others, have offered to set up an aircraft manufacturing plant and a special economic zone for production of renewable energy equipment components, it was announced here Friday.

The two companies would like to move through their Indian partner, the Knowledge Commission chairman Sam Piroda-backed Vavasi Group. The projects are intended for the MIHAN (Multi-modal International Hub Airport at Nagpur) project, currently being executed by the Maharashtra Airport Development Company (MADC).

These developments were revealed by the new and renewable energy minister, Vilas Muttemwar, who has been elected to the Lok Sabha from the Nagpur constituency. The proposals have emerged in discussions held by the Vavasi Group with the minister.

According to the minister, Sukhoi would like to partner with the Vavasi group to set up an aircraft manufacturing plant in Nagpur at an investment of euro 2 billion (Rs13,580 crore). He revealed that the Russian aerospace giant is likely to sign an MoU with the Maharashtra government on 10 October.

Initially, Sukhoi expects the plant to manufacture between 25-50 civilian aircraft on an annual basis with production rates being ramped up to 100 aircraft a year, in four years. The aircraft will be the 90-130 seater Sukhoi 100 Super Jet medium-haul passenger aircraft.

The plant alone is expected to create 15,000 direct and 75,000 indirect jobs. The minister also said that Sukhoi was prepared to spend whatever it took to compensate people whose land would be acquired for the project.

As for SKS Ventures, it has proposed a mammoth renewable energy SEZ in the MIHAN facility. ''The group has initially sought 400 hectares land in the MIHAN-SEZ operational area to set up a mono-crystalline growing facility, a 2,000-megawatt mono-crystalline TV (photo-voltaic) module and a float-glass plant. It will later seek 3,000 hectares in the (nearby) Butibori industrial estate to create the world's first renewable energy park,'' the minister said.

''Once the SEZ gets fully operational, it would account for almost 50 percent of the current global production of renewable energy components,'' Muttemwar said.

He added that Vavasi had sought land in the existing MIHAN-SEZ to begin with because the proposed renewable energy SEZ would take time to get all mandatory clearances.

According to the minister, these proposals provide a viable solution to the problem of providing acceptable compensation to project affected people in the MIHAN-SEZ area and their rehabilitation.

Like Sukhoi, the minister said, SKS Ventures too is ready to share compensation expenses for acquisition of land. The Malaysian company also wants to set up a 2,000 MW captive power plant for the entire cluster of facilities it will create with an investment of euro 6 billion (Rs40,740 crore), he said.

According to Muttemwar, the renewable energy SEZ will create an estimated 20,000 direct and 150,000 indirect jobs. Both Sukhoi and SKS Ventures are willing to accommodate one suitable candidate from each affected family at their facilities, he said.

SKS Ventures is a privately held company owned by billionaire businessman Tan Sri Syed Mokhtar Al-Bukhary. It controls Malaysia Mining Corporation (MMC), has stakes in Malaysia's Johor Port, the country's largest independent power producer Malakoff; and natural gas distribution company Gas Malaysia. It has invested in MPH, a book retailer in Singapore and Malaysia.

The firm also signed an agreement last year with Iran where it will partner the country's state-owned firm to develop a $16 billion  gas project in the Golsahn and Ferdos gas fields.

Vavasi describes itself as a multi-faceted group with diverse interests including, telecommunications, real estate, renewable energy, aviation and steel and cement. It says that over the years it has grown to become a global company with partners and associates in all the geographical areas including south east Asia, CIS, the Middle East and North Africa, South America and the USA.

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Russian Sukhoi and Malaysian SKS Ventures offer Rs54,320 crore investments at Nagpur's MIHAN facility