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The reasons: politically motivated agitations and severe power cuts, which are making these units rethink on their plans.
Recently, senior officials of about 25 pharma units located in the pharma city at Parawada met district collector and city police commissioner and apprised them of their problems.
"We are ready to provide jobs to the land losers if government officials provide a proper list and at the same time we are ready to shut shop if they do not provide safety and security to our operations from local political leaders," they said.
Major pharma companies like Lupin, Biocon, Hetero Drugs, Arked Chemical and Andhra Sugars have together invested around Rs 500 crore in land here. But, due to the frequent agitations by local political leaders these companies are reluctant to establish their units. Existing unit holders too say they would be forced to shut operations, if authorities do not provide adequate security, according to M Nagaraja, chief administrative officer, JNPC Manufacturers Association.
"We have already told higher officials in state government and district collector the problems we are facing due to these political leaders. If we do not get a proper response most of the existing operators may also close their operations," he said.
Local politicians, according to him, are brainwashing villagers to stage sit-ins and block roads, thus disrupting operations. Sometimes, they even manhandle officials, he alleged. Over the last one year, there have been some 15 dharnas in and around the area.
"Around 3,000 locals are working in the pharma city. The district collector had prepared a list of 1,850 families, who have lost their land and we are ready to provide jobs to these family members, but local political leaders have rejected this and are coming out with their own lists," he added.
The Ramky group has developed the pharma city on 1,400 acres, allotted by the Andhra Pradesh government in a non-SEZ area. The group is now selling this developed land at more than Rs 1 crore per acre.
By 2006, the pharma city had attracted 26 small and medium units. But between 2006 and 2013, only 10 new units came up. At present, 36 units are in operations, Nagaraja said. Besides, another 26 are under construction. The major ones - some 7-8 units - have bought land to the extent of 400 acre but are yet to begin construction.
A pharma unit owner alleged political leaders were also demanding construction and material supply contracts.
Other problems
Power cuts are another problem facing these units. The association has requested the government to provide continuous power to enable them to function normally.
Nagaraja also said high maintenance costs were eating into their profits and therefore unit operators. "The Ramky group, which is maintaining the pharma city, is collecting very high charges in the name of fixed charges, water charges, solid waste management charges and effluent treatment charges," he said.
Ramky chairman Ayodhya Rami Reddy, however, said the charges were being collected as per the concessional agreement between Ramky and the Andhra Pradesh Industrial Infrastructure Corporation. "The charges are fixed by the government, and accordingly are being collected," he said
Admitting that some local leaders were creating troubles for the unit operators, Bandaru Sathyanarayana Murthy, former minister and Telugu Desam leader, said he had initiated a few agitations in the pharma city demanding jobs for local. Quoting a survey, he said 500 fishermen and about 1,600 villagers, who have lost their lands in acquisition, were eligible for jobs. "If unit owners give a time frame on providing jobs, then we would not take up any agitations," he added.
At the meeting, district collector V Seshadri assured all help. "Without any apprehensions investors should continue their activities and if need be, we will provide police protection to the pharma city to build confidence among the investors. The police has already appointed local villagers as community guards there," he said.
Among those who met the district collector and city police commissioner included Industrial Area Local Authority chairman and managing director Vishanu Chemicals Krishna Murthy, Glochem Chemicals owner and vice president JNPC Manufacturers Association Subba Rao, Mahidaara Chemicals managing director and secretary JNPC manufactures association C Narasimha Raju, Eisai Pharmatechnology president and managing director Sanjit Singh Lamba.
