Andhra yet to see major investments

Andhra Pradesh may have been successful in attracting the attention of big corporates like Reliance in the non-IT sectors but it has to wait for at least three more years to see the flow of investments as in states like Gujarat and Maharashtra.

Though the gas production by Reliance and GSPC in KG Basin, which may commence in the second half of 2008, is expected to give the much-needed fillip to industrialisation in the state, other mega projects may go beyond 2008 to reach a decisive stage of implementation.

Even as about Rs 73,783 crore worth of investment proposals are in the pipeline, including mega projects worth about Rs 42,201 crore, only 47 proposals, worth Rs 10,608 crore, are actually under active implementation.

These projects are expected to commence production within 2-3 years' time, according to a recent report prepared by the industries department. Of this, the expansion of Vizag Steel plant alone accounts for an investment of more than Rs 6,000 crore.

The other projects under active implementation include a Rs 171-crore integrated steel plant by Maa Mahamaya Industries Private Limited, Rs 137-crore CI components and machine parts plant by Tecumesh Products Private Limited, and a polished & glazed tiles and sanitaryware unit by RAK Ceramics.

Of the 47 proposals, only 16 are of the size of more than Rs 100 crore worth of investments. The remaining are in the range of Rs 25 crore to Rs 100 crore investments.

As far as mega projects are concerned, there is a list of 12 proposals with investments ranging from Rs 125 crore to Rs 18,000 crore on the table but most of them, even if they conclude by the early financial closure, would see the light of the day only by 2009-2010.

HPCL's greenfield petrochemical complex proposal tops the list in terms of investment with an estimated Rs 18,000 crore in addition to the expansion of the existing refinery at Vizag at an estimated cost of Rs 1,635 crore.

The other mega projects under initial stages are Rs 2,500-crore refinery by ONGC-Mangalore Refineries & ILFS joint venture at Kakinada, Rs 2,000-crore expansion project by ITC Bhadrachalam (paper), Rs 9,000-crore aluminium project by the Jindal group, Rs 1,000-crore paper project by White Field Paper Limited in West Godavari, Rs 2,100-crore fertiliser project by Nagarjuna Fertilisers Limited at Karimnagar, and Rs 650-crore automotive glass manufacturing plant by Pilkington.

At present, the steel and ferro alloy industry is the leading sector in the state followed by bulk drugs and chemicals, and non-metallic minerals like cement in terms of investment.

The year-wise investment proposals received by the state industries department also indicate that the real break is yet to come in the manufacturing and other non-IT sectors in terms of size of investments.

During 2004-05, a total 75 projects with an investment of Rs 1,811 crore went into production. This is much lower as compared to 2001-02 when over 105 projects with Rs 2,240 crore investment went into production.

Till November, 2005, only 44 proposals involving Rs 494 crore investment have gone into production, according to the industries department. So far, 256 proposals with Rs 4,380 crore investment have been received during the current year.

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Only 47 proposals worth Rs 10,608 crore are under active implementation

A list of 12 proposals with investments ranging from Rs 125 crore to Rs 18,000 crore is on the table

The real break is yet to come in the manufacturing & other non-IT sectors in terms of size of investments