Skoda Exports to ink MoU with Incap today

To set up a $1bn industrial port complex at Nizampatnam

Czech-owned Skoda Exports will be signing a memorandum of understanding (MoU) with the Infrastructure Corporation of Andhra Pradesh (Incap) for the establishment of an industrial port complex at the port town of Nizampatnam on Monday.

The project, proposed to be set up at an investment of about $1 billion, would comprise four components, namely, port development, development of an SEZ, establishment of a urea plant and a thermal power project.

Besides being the nodal agency for the implementation of the whole project, Incap will also hold an equity in the Nizampatnam Industrial Port Complex Company (NIPCCO), the size of which will be decided at a later date.

Speaking to Business Standard, Sroslav Hubacek, CEO of Skoda Exports, said the company was expecting to complete all the formalities, including environmental clearances, required for the implementation of the project in a year from the date of signing the MoU.

According to him, all the four components of the project would be taken up simultaneously and would roughly require about 35 months for the completion.

Former state chief minister and Union industry minister Jalagam Vengala Rao's son Jalagam Venkat Rao, who is the MLA of Sattupally, has played an active role in bringing Skoda Exports and the state government together for setting up the project.

The company proposes to develop Nizampatnam port as a multi-product deepwater port facility. Besides this, Skoda Exports proposes to develop an SEZ for manufacturing operations in 2,500 acres near the port and to set up a 5-lakh tonne capacity urea plant and a 250-mega watt thermal power project which would be scaled up later.

"This would be the first such project to be undertaken by us in India and we are certainly taking up it as a challenge," Hubacek said while terming the state as the best destination for investments in India.

Skoda Exports is already thinking beyond the proposed Nizampatnam project, as according to its chief executive, the company is also keen to undertake the implementation of 950-mega watt Polavaram hydel power project in the state.

The government is expected to sign the state support agreement with the company after the submission of a masterplan and a detailed project report (DR) of each of the project components. In January this year on his brief stopover at Hyderabad, Czechoslovakian Prime Minister Jiri Paroubekhad had discussed the project with chief minister Y S Rajasekhara Reddy.

Vlastimil Lorenz, special envoy of the Czechoslovakian industry minister, expressed the hope that the Nizampatnam project would deepen the trade ties between his country and India and Andhra Pradesh.

He said the Czech government was aiming to reach $1 billion trade turnover in the next couple of years from the present $500 million. He accompanied the Skoda Exports delegation, which delivered a letter from the Czech Prime Minister to Rajasekhara Reddy inviting him to visit his country.

Meanwhile, Hubacek indicated that one of the Skoda Exports' associated entities was in talks with a Chinese company to jointly establish a ship building project at Hamburg, Czechoslovakia's exclusive port facility in Eastern Europe, and would also consider Nizampatnam port for the same.

Nizampatnam, the historic port in Guntur district, is expected to transform into a huge industrial port with the proposed handling of containers, bulk cargo, including chemicals, cement, granite, coal, iron ore among other things. Skoda proposes to build three berths at Nizampatnam, one of which would come up initially for coal handling.