Firms put plans on hold in AP

The Telangana agitation has forced several companies including Bharat Forge, Lakshmi Mittal Group and NTPC-BHEL join venture to either put their expansion plans on hold or explore other states.Addressing the media here on Tuesday after a meeting with industry representatives, chief minister K Rosaiah said Bharat Forge, which planned to set up a nuclear power plant equipment unit at Nellore at an estimated cost of Rs 2,500 crore, was considering Gujarat.

The proposed project was to generate 5,000 employment opportunities. Andhra Pradesh succeeded in getting the project after a stiff competition from Tamil Nadu.

Likewise, French car maker Peugeot, which was considering investments in the state, and steel major Lakshmi Mittal Group, which had planned a unit here, were going slow on their proposals.

The chief minister said Sri Lanka-based Brandix Apparel, which has units in Nellore and Visakhapatnam, was now rethinking on its decision to set up a unit in the Telangana region. The company provides large scale employment to the locals, he added.

The proposed Rs 6,000-crore power project equipment manufacturing unit in Mannavaram village in Chittoor district by NTPC-BHEL Power Projects Private Limited, a joint venture between public sector giants NTPC Limited and BHEL, was also in the limbo. The state cabinet in June this year had already approved allotment of 750 acre for the project. The state had faced stiff competition from Rajasthan to bag the project.

The NTPC-BHEL project was supposed to be the largest public sector investment in the state after the Vizag Steel Plant and had a potential to provide direct employment for 6,000 people besides indirect employment for over 25,000 persons. It had plans to manufacture equipment for thermal, hydro, gas and power plants.

Prime Minister Manmohan Singh was to lay the foundation-stone for the unit but this was postponed following the death of former chief minister YS Rajasekhara Reddy. “We are not able to approach the Prime Minister asking to lay the foundation stone in view of the turmoil in the state,” Rosaiah said.

Financial services firm JP Morgan Chase, which planned to create direct employment for 6,000 people apart from indirect employment in the state, too is in the two minds now.

Rosaiah said the bulk drug and pharma companies had lost close to Rs 500 crore due to recent bandhs. Drug processes were also affected as the raw material supplies could not reach the companies in time.

Orders from African countries, which depend on the state for 90 per cent of their drug requirements, could not be honoured on account of bandhs.

The turmoil in the state has also seen several inaugurations being postponed. For instance, Japanese drug major Eisai, which set up a unit in Visakhapatnam recently, had delayed its inauguration, which was slated for December 12.

Among others, CII Partnership Summit, an industry event, slated to be held in Hyderabad on January 21 and 22, was set to move to Chennai in view of the fluid situation in the state. The state government, however, persuaded them to conduct the event in Hyderabad by promising additional security. “We told them that the agitation in the state is against investments or the industry,” he said.

Hotel, tourism, IT and other sectors too have been hit badly in the state, he said, adding the state was losing the destination hub tag that it earned over the years.

The state government would form a special task force to protect the industries and their employees.

A separate number, like 100 for police and 108 for ambulance, would be created for the industries shortly, he said.