Peugeot chief visits sites in AP, Tamil Nadu

French car-maker Peugeot Citroen chairman Philippe Varin, along with a contingent of his top officials visited, Andhra Pradesh and Tamil Nadu to meet the heads of both the state governments besides checking out the site for its proposed car manufacturing plant in India.

The company, which is planning a 2-million unit capacity plant with an investment of about $1 billion, was to take a call this month itself on the project location based on the possible advantages, including incentives, the two states offer.

However, officials here were given to understand the company would take a final view on this only by June, 2011, ie, after the new government in Tamil Nadu is put in place.

 

The government officials in Andhra Pradesh were tight-lipped over the outcome of the discussions held by Varin with chief minister N Kiran Kumar Reddy at the latter's official residence late evening yesterday even as the company delegation proceeded to Tamil Nadu to meet deputy chief minster MK Stalin.

One of the reasons behind postponing its decision, as sources pointed out, was that the company's consulting firm has favoured Tamil Nadu over Andhra Pradesh and Peugeot is keen to take a final view only after the elections in that state are over.

Kiran Kumar Reddy is reported to have told Philippe that the state would offer a stable policy support to the company irrespective of recent changes in political administration.

Meanwhile, Peugeot head visited a site at Tada on the Tamil Nadu borders in Andhra Pradesh and later visited a site at Vallam near the Nokia plant in Tamil Nadu, where the land was offered to the company by the respective governments, according to sources. The two governments are vying for the car project leaving scope for a better bargain by the company.

Earlier, chief secretary of Andhra Pradesh had given a letter to the company agreeing in-principle to allot over 800 acres of land at almost free of cost under a long-term lease arrangement along with a 21-year value added tax (VAT) waiver for the project.