Mumbai: 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. City Industrial and Development Corporation (CIDCO) officials say TECS, which was appointed by 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.

CIDCO is the implementing authority of the SEZ. The SEZ, which is to come up over 704 hectares at Dronagiri, is expected to produce an output of $1.4 billion by 2008, the officials say.

TECS says the formulation of the act will provide the umbrella framework under which joint ventures with foreign strategic investors and the new management of the SEZ can be formed. It has recommended the formation of a special purpose vehicle (SPV) to act as a planning and development entity.

The legal empowerment of the SPV to undertake the development of an SEZ could be through a contractual arrangement between the Maharashtra state government, CIDCO and the SPV. TECS has also suggested the extension of the tax holiday scheme for 20 years with 100-per cent exemption facility for Dronagiri SEZ and has also recommended automatic 100-per cent foreign direct investment clearance to the entire range of activities perpetuated under the SEZ. Besides, TECS has called for an adoption of public private partnership structure for development and management of the Dronagiri SEZ, the official add.