AP to invite private investments into integrated township projects

The Andhra Pradesh government is planning to introduce an Integrated Township Development policy, similar to the one in Gujarat, to attract private investments for developing world-class township projects in the proposed industrial corridors.

The government would provide land to the extent of 5,000 acres for each township project while private investors, who will be selected through a bidding process, would develop the infrastructure and other amenities apart from residential plots, according to a government official. Like in any similar project under public-private participation, the government will have the equity in the project towards the land contributed by it.

"A lot of enquiries are coming from the private players pertaining to the township development in the state. This has prompted the government to formulate a policy for that," the official told Business Standard without elaborating the details as the policy is yet to be finalised.

Initially, the government is planning to promote these integrated townships in places like Naidupeta in Nellore district and Donakonda in Prakasham district among a few other locations.

Naidupeta is in close proximity to the Vizag-Chennai industrial corridor project, which will be developed by the Asian Development Bank (ADB), according to the announcement made by the state government in October this year. In Naidupeta, the government had acquired 4,000-5,000 acres of land for industrial purpose when Y S Rajasekhara Reddy was chief minister though no major development had taken place since then.

The Chandrababu Naidu government recently announced it would develop a large industrial hub in Donakonda where 40,000-50,000 acres of government land is reportedly available for such use. The state apparently wants to promote industrial and township projects in the first phase where the land is readily available.

Apart from local construction companies, investors from other countries are also showing interest in the integrated township projects, according to the industry department. "Japan wants to develop at least one such project as there is a large presence of Japanese manufacturing companies in Nellore district at Sri City. Even investors from Spain have expressed their intent to invest in townships," an industry department official said.

The Gujarat government had come out with its first integrated township development policy in August, 2007, under Narendra Modi's leadership. Making out a case for such a move, it had said knowledge and technology- based businesses were driven by global capital and their investment decisions depend on the advantages offered by the respective cities across the world.

"This means for Gujarat to attract investments in these sectors, its cities have to compete with similar city destinations across the world," the Gujarat government said in its policy statement.

Naidu recently said his government would come up with sector-specific policies soon. The government had announced an automobile manufacturing policy offering large tax incentives for integrated automobile manufacturing projects in the state.

An industrial development policy covering the entire industrial sector along with incentives and other proposals, including special incentive packages for Dalit and women entrepreneurs and a single window clearance policy, are expected to be announced early next month.