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| YSR's death may hit infra companies |
| Ch Prashanth Reddy / Hyderabad Sep 05, 2009, 01:18 IST |
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Reddy’s tenure was known for infrastructure development.
The death of Andhra Pradesh Chief Minister Y S Rajasekhara Reddy in a helicopter crash this week is likely to affect infrastructure companies more than any other enterprise in the state.
Reddy’s tenure was known for infrastructure development, including the construction of massive irrigation projects, modern ports like Krishnapatnam and Gangavaram and the proliferation of special economic zones (SEZs) and establishment of manufacturing units (see table). The Rs 12,132-crore Hyderabad Metro Rail project was also his brainchild.
It was to his credit that companies like Apache, Tata Advanced Systems, Kaizen Technologies and, most recently, NTPC-BHEL Power Projects Limited came forward to set up their units in Andhra.
BUILDING A REPUTATION
(Major infrastructure projects under the YSR regime) |
Hyderabad Metro Rail
Project - Rs 12,132 crore |
NTPC-BHEL Power
Projects Private Limited -Rs 6,000 crore |
Vadarevu-Nizampatnam Ports and Industrial
Corridor - Rs 16,800 crore |
Krishnapatnam Port -
Rs 10,000 crore |
Gangavaram Port -
Rs 14,450 crore |
Tata Advanced Systems helicopter production unit -
Rs 1,000 crore |
84 Irrigation projects -
Rs 1.76 lakh crore |
In the last five years, the state government spent Rs 41,000 crore on irrigation infrastructure, which earned Reddy the name “Apara Baghirath” (or “Today’s Baghirath”). His successor will have a daunting task continuing with his Jalayagnam programme, under which 84 irrigation projects are to be constructed at a cost of Rs 1.76 lakh crore.
All the major infrastructure companies in the state including Maytas Infrastructure, the Ramalinga Raju-promoted firm recently taken over by IL&FS, IVRCL, Nagarjuna Construction Company, Indu Projects, Navayuga Engineering and Gayatri Projects have benefited from Reddy’s programmes and they would be at a loss if his successors did not continue these with the same as vigour as he did.
Even pharmaceutical companies like Aurobindo and Hetero Drugs benefited with the Centre sanctioning 54 SEZs to the state.
In fact, when farmer-friendly Rajasekhara Reddy wrested power from industry-savvy Chandrababu Naidu in 2004 there were apprehensions that there could be a setback to the close relationship the industry enjoyed with state government at that time.
But YSR, as the 60-year-old Reddy was popularly known, continued the public-private partnership by focusing on rural development and increasing the area under irrigation in the state.
Like Naidu, Reddy maintained a cordial relationship with industrialists, without the hype that prevailed during the rule of the Telugu Desam Party. Reddy silently took forward what Naidu had started and accelerated infrastructure development in the state.
Dr Reddy’s Laboratories’ founder Anji Reddy said industrialists in the state are “lucky” to have chief ministers like Naidu and Reddy. “I have known both Chandrababu Naidu and YS Rajasekhara Reddy for the last many years. I have always told my industry peers that my state, Andhra Pradesh, is indeed lucky to have forward-looking, visionary chief ministers like them,” he said.
Assocham president Sajjan Jindal pointed out that a lot of domestic and overseas investments had flowed into Andhra due to Reddy’s “investment friendly policies.”
There are, however, some entrepreneurs who felt the heat during Reddy’s regime. Prominent among them was the Eenadu group headed by Ramoji Rao. Besides owning a Telugu newspaper and television channels, the group companies include Margadarsi finance and chit funds and the Ramoji Film City.
Cases were filed against the group for violating Reserve Bank of India norms and purchasing assigned lands. Reddy never missed an opportunity to criticise Eenadu for its “biased and anti-Congress stand.” It is no coincidence that his son and MP Jaganmohan Reddy promoted the rival Sakshi group of newspapers in the state.
Similarly, Nagarjuna Fertilisers’ group chairman, K S Raju, was arrested and jailed when his group company, Nagrajuna Finance, defaulted in repaying the deposits collected from thousands of people. An arrest warrant has also been issued against Nimesh Kampani, investment banker and chairman of JM Financial, who had been a director on the board of Nagarjuna Finance.
The most famous case was that of Satyam Computer Services’ founder B Ramalinga Raju who had been jailed for committing a massive accounting fraud, although no motives could be attributed to Reddy.
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