AP plans manufacturing investment region

The Andhra Pradesh government is planning to establish a Manufacturing Investment Region (MIR) "� which can qualify for infrastructure grants from the Centre "� between the port town of Krishnapatnam and Satyavedu on the National Highway 5. This move is seen as an answer to the Tamil Nadu government's proposed MIR on the Chennai-Bangalore highway.

Being closer to Chennai, the Andhra MIR can as much boost the Chennai port, Chennai airport and Ennore port as access points for transport and other logistics for manufacturing companies as its counterpart.

Besides, the four-lane NH5, which connects to Chennai and Kolkata, has the railway network passing through. This is in addition to the Krishnapatnam port, which is scheduled to be fully ready by June this year and the Tirupati airport for connectivity requirements.

"The proposal is in the initial stages. We need to work out several other details," BP Acharya, chairman and managing director, Andhra Pradesh Industrial Infrastructure Corporation (APIIC), told Business Standard.

APIIC has entrusted L&T Ramboll with the job of preparing a master plan, feasibility report, infrastructure and funding requirements for the proposed MIR. A detailed proposal would then be submitted to the Centre for seeking viability gap funding for the development of infrastructure.

This is the second investment region being conceived by the state government. APIIC is already developing a Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) on about 35,000 acre near Visakhapatnam, which is in advanced stages of clearance by the Centre.

The grounds for declaring the 75-km stretch between Krishnapatnam and Satyavedu as an MIR are already in place with several special economic zones (SEZs), manufacturing parks and power projects, some of which are in the initial stages, proposed in this region. Besides, about 25,000 acres of land for industrial usage is readily available in different pockets of this region, according to officials. The total employment potential projected in this area is nearly 5 lakh jobs once it is fully developed.

It may be recalled that close to half-a-dozen coal-based power projects, including the 4,000Mw ultra mega power project (UNPP), which has been awarded to Reliance Energy, a 1,600Mw project by APGenco, the 540Mw Simhapuri project, and a 540Mw Vikas Power project have been proposed at Krishnapatnam. Navayuga Engineering Limited, the concessionaires of Krishnapatnam port, has also proposed a 1,360Mw thermal power project in this port town of Nellore district, which would see it emerge as the power hub in the next five years.

Among the SEZs, which have either been set up or are proposed in this area, include the 5,000-acre Sricity, 2,700-acre Kisan SEZ of Iffco, and Apache Footwear SEZ. A garment SEZ proposed by MAS Holdings on 750 acres, and a leather goods SEZ by Bharatiya International also fall in this region.

Major industrial houses like the Caparo group are keen on setting up auto and aviation component manufacturing units in the 5,000-acre industrial area available at Naidupeta. A couple of steel product manufacturers such as RKKR and SBQ Steels are also operating in Nellore district.

According to government officials, the establishment of an MIR with good infrastructure can attract the labour-intensive manufacturing industry to the state, which has so far been the forte of Tamil Nadu in the south.

The strategy of the government is to develop the manufacturing base on the doorsteps of its neighbouring state by offering an alternative destination to companies, which usually look to Tamil Nadu.

The Andhra Pradesh government feels the proposed MIR on the Chennai-Bangalore highway can throw a spanner into its plans if it did not pitch for the development of a similar region.