Medical device park project set to miss deadline

The upcoming medical device park at Nalagarh in Solan district is set to miss its March 31 deadline due to a shortage of funds. The state government recently returned Rs 30 crore granted by the Central Government and Rs 105 crore allocated by the state for the levelling of 265 acres and establishing civic infrastructure has already been exhausted. The contractor concerned has halted the civil work, as over Rs 25 crore remains unpaid to him for several months.

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Initially, the project cost was pegged at Rs 349.83 crore, with the Central Government providing Rs 100 crore for the development of common scientific facilities and the state government contributing the remaining funds. The project has now been restructured. Under the new plan, only 25 per cent of the land will be allocated exclusively to medical device industries and the remaining 75 per cent will be used for other strategic industries. The government expects to earn Rs 500 crore in the next five to seven years through this modification.

Though the state government had planned to secure a loan from the Small Industries Development Bank of India in 2023 to complete the project, it did not materialise. As against the earlier mandate of the project, the government will no longer offer the investors land at a subsidised rate of Re 1 per sq m, nor provide power at Rs 3 per unit, water, maintenance and warehouse facilities for 10 years without any charge. It remains uncertain whether the investors will be attracted without these incentives, especially given the state’s geographic challenges, such as the lack of raw materials and a market for products. Investment in the state has significantly declined in the absence of financial incentives.

Industries Minister Harshwardhan Chauhan says that efforts are afoot to secure Rs 200 crore for the project and the civil works like road construction, drainage, convention centres and plot carving are in an advanced stage. Prime Minister Narendra Modi had laid the foundation of the park in October 2022. While Rs 810 crore in memorandums of understanding (MoUs) for 15 projects were signed for this project in March 2022, the restructuring of the park could negatively impact these future investments.

In the first phase, 15 plots, measuring 5,000 sq m to 50,000 sq m, have been carved out. The number of laboratories has been reduced from four to two, including one for material testing. Infrastructure, convention centres and factories are also being set up.