A fortnight back, the Essel group approached the Housing and Urban development Corporation (Hudco) for a Rs 250 crore loan for the proposed Project E-citi. The company has submitted a draft proposal to Hudco on the project.

Hudco is expected to take a decision on the proposal only after the company submits the final proposal. The final proposal, according to company sources, is expected to be submitted within a month.

The `Project E-citi', a showpiece of local culture, will comprise a theatre, audio and movie complexes along with other forms of entertainment centres. This is in keeping with Chandra's plans of transforming his televsion software company into a mediaconglomerate.

Essel group president Sanjay Das refused to speak on the proposed entertainment project. "The proposal is just at a conceptual stage. The details of the financing part is yet to be worked out. It will not be right on my part to give any details at this stage."

According to sources, the Maharastra government has agreed in principle to give the company concession on the entertainment tax.

Sources who are familiar with the proposal say that the company submitted the proposal to Hudco for advancing separate loan facilities for each entertainment centre. It is planned that each E-citi will have total investment of Rs 20-25 crore with a debt equity ratio of 1.5:1. "The total debt requirement for the projects in western India will be to the tune of about Rs 192 crore," sources said.

Going by the plan, Maharashtra is expected to have 11 E-cities, followed by three in Gujarat and two each in Madhya Pradesh and Andhra Pradesh. At the second phase, the company plans to set up E-Cities in WestBengal and Punjab. "The company plans to set up 18 projects by 2002," sources said.

Through the E-citi, the company plans to build mega tourist and social infrastructure by developing the growth of domestic and foreign tourist traffic as well as generating employment avenues in the service industry, sources said.