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The Asian Development Bank (ADB), the funding agency of upcoming Visakhapatnam-Chennai Industrial Corridor (VCIC) project, sees a high growth potential for the currently non-existent auto and electronics manufacturing activities in the corridor that covers the areas abutting the entire coastline of Andhra Pradesh.
According to ADB’s projections, auto and electronic manufacturing is set to grow at the rate of 24% over the next two decades, while the other identified sectors, namely food processing, textiles and apparels, chemicals and petrochemicals, pharma, plastics and metals are expected to see a rate of growth between 7 and 13% during the same period.
These projections assume significance as the funding agency estimates that the GDP in the corridor districts will increase by six times and manufacturing output by seven times over the next two decades following the implementation of the industrial corridor project, which covers eight coastal districts starting from Srikakulam to Nellore district down south and Chittoor district bordering Tamil Nadu.
The project extends to nine out of 13 districts of Andhra Pradesh and it was considered to be an important segment of the East Coast Economic Corridor (ECIC) being developed between Kolkata and Tuticorin. The VCIC project is expected to bring an average two-fold increment in industrial output and a 30% improvement in productivity over the period, according to the multi-lateral lending agency.
The $840-million VCIC project involves the development of infrastructure in urban services, connectivity between the industrial nodes, strengthening of power transmission and distribution network among other things. It proposes to develop four industrial nodes- two brown industrial nodes at Visakhapatnam and Kakinada and two green-field nodes called Gannavaram-Kankipadu and Yerpedu-Srikalahasti nodes. Industrial activity will be centered around these four industrial nodes.
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The project is anchored on an 800-km segment of National Highway(NH) 16 that passes through the entire stretch of AP coast line with six laning of the existing four-lane highway was also envisaged by the government.
ADB country director M Teresa Kho stated at the just concluded AP Partnership Summit that the funding for the project will begin this year as most of the preparatory work including the masterplan development was completed by 2015. ADB is extending $ 625 million loan, which also include a $ 125 million policy-based loan for the project while balance funding was coming from the AP government.
According to the ADB data, manufacturing sector contribution to AP's GDP was currently about 10% as compared to 25% for Gujarat, 18 % for Maharashtra and 17% for Tamil Nadu. The proposed industrial corridor project combined with the state government's efforts at attracting the investments in manufacturing sector are expected to take the state closer to the front-line industrial states in India.
