Golden promises, humongous tasks

Soon after it had become clear that N. Chandrababu Naidu will be the Chief Minister of the new Andhra Pradesh, he reiterated the promise of a golden ‘Seemandhra.’

“We will build it from scratch,” he said. “The Telugu Desam Party, with a friendly Modi government at the Centre, has full confidence in achieving its goal.” Mr. Naidu is hoping to bring in a major chunk of development right from the first term. His dream is Singapore-like development in the State.

The first positive response to Mr. Naidu’s call for reconstruction came from the industry — over 27 firms under the banner of Industrial Development Forum (IDF) came up with investment proposals estimated at Rs. 5,600 crore in different sectors. Having seen Mr. Naidu in his earlier avatar as the Chief Minister who changed the face of Hyderabad, the industry is hoping that the new Andhra Pradesh will become a new hub of information technology.

“We submitted our investment proposals to Mr. Naidu. Many other industrial groups are also willing to invest but are waiting for the government to assume charge,” said IDF chairman J.A. Chowdary.

Investors are looking at Visakhapatnam, Kurnool, Anantapur and Vijayawada to set up firms in pharma and IT sectors, he added.

The proposed 1,600-acre Dindi Pharma Chemical Park near Guntur, about 20 km from Vijayawada, has been given environmental clearances and is expected to attract investments of Rs. 3,000 crore, say industry sources.

Mr. Naidu is understood to have roped in key officials to focus on the execution of projects such as the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) and IT Investment Region (ITIR) in Visakhapatnam; the National Technology Corridor along Vizag, Rajahmundry and Vijayawada and connecting to Chennai; and new seaports and airports and a national waterway. Several agri-processing initiatives are on the anvil.

“Several project proposals for the region are under active consideration. The new government is likely to call for Expressions of Interest as soon as it takes over,” said a senior government official on condition of anonymity.

For instance, the National Association for Software and Service Companies (NASSCOM) has already evaluated the National Technology Corridor.

“The idea is to promote niche design and electronic chip manufacturing here. The industry is new to India. … it can be set up anywhere, independent of the ecosystem. It will be a high-value and low-volume industry,” said NASSCOM vice-president Rajiv Vaishnav. In the light of electronic chip imports surpassing oil imports, the industry is estimated to spell a major economic boom for the country.

On the academic front, as per the Andhra Pradesh Re-organisation Act-2014, over Rs. 10,000 crore will be spent on development of educational institutions in the State. The plan includes an Indian Institute of Technology, a National Institute of Technology, an Indian Institute of Management, an Indian Institute of Science Education and Research, and an Indian Institute of Information Technology, besides a Central university, a petroleum university, an agricultural university and a tribal university. A super-specialty hospital on the lines of the All India Institute of Medical Sciences will be set up.

Prominent among major projects that have potential to change the face of the region is the PCPIR which was planned along Visakhapatnam all the way till the Kakinada coast in East Godavari district. The project is touted to be the biggest of the six PCPIRs across the country.

While the total estimated investment expected in the Andhra coastline is over Rs.3.3 lakh crore, a consortium led by infrastructure company GMR has already submitted a proposal for Rs. 33,000 crore.

“Land acquisition is under way along the coastline near the Kakinada port and other places. The project is likely to pick up pace very soon,” said a source at GMR. The project, spread across 640 square kilometres, is located close to the rich oil and natural gas resources in the Krishna Godavari (KG) Basin.

Many industries in sectors such as petroleum, plastic, chemical, printing etc. are expected to come up along the coastal belt. The total employment potential is estimated to be close to 12 lakh, half of them indirectly. The large presence of educational institutions in the coastal districts of the State is also expected to complement the growth potential. “Once these industries are set up along with ancillary industries and supporting physical infrastructure, the region would transform into Singapore,” said K. Haribabu, Member of Parliament from Visakhapatnam and State BJP President.

The BJP says it is determined to develop the 971-km Buckingham canal which flows through Andhra Pradesh, Tamil Nadu and Puducherry. The canal, built in 1809, had been a major driver in terms of promoting affordable local trade. It is currently nothing but a drainage canal.

The TDP is hoping that its friendly ties with the BJP will expedite development in the State through Central assistance, special status, tax sops and grants. “Andhra Pradesh has a special combination of port, airport, road and rail and waterway network, which is underdeveloped and untapped so far. We can use these networks to become a major exporter,” said Mr. Haribabu.

Andhra has a number of seaports along its 996-km coastline which can be developed to realise the State’s trade potential. The new government is expected to undertake a slew of development activity at the ports of Kakinada, Bhavanapadu, Yanam, Narasapuram, Machilipatnam, Nizampatnam, Vadarevu, Krishnapatnam, Meghavaram, Kalingapatnam, Bhimunipatnam, Nakkapalli and Gangavaram. These ports currently handle 100 million tonnes of cargo annually. The capacity is expected to be doubled by 2020, according to industry estimates.

That the TDP’s Ashok Gajapathiraju is the Union Civil Aviation Minister is also expected to help Andhra Pradesh turn some of its airports such as the one at Vijayawada international hubs.

Besides, the long-pending plan to develop mini and regional airports in different parts of the State may be a reality soon. Expert teams from the Centre have evaluated many locations for regional airports just before the general elections. One such place was near Pithapuram, 18 km from Kakinada on National Highway 5.

The TDP chief himself estimated that it needs over Rs. 4 lakh crore to rebuild the region, especially its capital city. In Mr. Naidu’s words: “There is absolutely nothing here. We need to search for nuts and bolts and build everything from scratch.”

Industry experts say that meticulous planning can save a lot of resources for the new State. For instance, most of the infrastructure projects can be brought in via Public Private Partnership (PPP) which means almost no financial burden on the State. A sizeable part of the Central grants, which are expected soon, need not be re-paid. The expected tax breaks and other sops from the Centre will invariably attract a lot of investment into public infrastructure and Mr. Naidu is apparently banking on such brownies.

As soon as he assumes office, Mr. Naidu will have to operate amid pressures emanating from the financial front. The immediate job could be getting the Central grant to support salaries of government employees as the State finances are in deficit of over Rs. 10,000 crore.

This apart, the resources needed to fund the poll promise of farm loan waiver has enough potential to destabilise the economy of the State. And the issues related to bifurcation such as division of borders, departments, manpower, river water and power sharing could be another major worry.

That is why when Mr. Naidu assumes charge on June 8, he will have to hit the ground running.