L&T Metro Rail (Hyderabad) Chief Executive V B Gadgil used to face one persistent question during his frequent press conferences till recently. What would happen to the metro rail project if the state gets bifurcated? Will the project still remain viable?
If at all there is a big project that faces an absolute risk of losing money, had it not been supposedly backed by a sound economic foresight, it is the Metro Rail project. Also, the company had the audacity to begin the project right in the middle of great political uncertainty involving the future status of Hyderabad, back in 2012.
Neither the project concessionaire, L&T, nor the bankers who committed funds of over Rs 10,000 crore for the project were ever found on the back foot while facing this persistent question. "We had done our homework well and nothing adverse is going to happen to the project even if the state gets divided," was the predictable response from Gadgil, according to whom the city had gathered enough critical mass to withstand such setbacks.
As the state is now getting divided, the same question is extended to existing infrastructure facilities, both in the public and private sector, to find out if all of it could still be relevant and make economic sense for a two-state situation.
Most of the infrastructure - whether it's engineering education, health care, energy or physical connectivity like roads and airports - had come up in line with the current and future requirements of the combined state. Will some of it go waste?
"Four years had already gone waste in this statehood issue. It would be naive to think that things would be the same even after the bifurcation," says Y Harishchandra Prasad, an entrepreneur activist, in response to this question. Prasad, who hails from the affluent Krishna district, recently floated a development forum to deal with the future progress, including the industrialiation, of the residuary state of Andhra Pradesh.
What would happen to the Hyderabad International Airport, the country's first modern airport facility designed to handle 40 million passengers after the completion of the second phase, if the successor Andhra Pradesh state will have its own international airport in Visakhapatnam or Vijayawada?
The Hyderabad airport handled 8.3 million passengers in 2012-13, and achieved a break-even two to three years back but is still way behind in profitability compared to the airports in Bangalore or Mumbai.
For Prasad, everything that is connected with Hyderabad will overcome the bifurcation impact, if not tomorrow then the day after. "Even now, only half of the Seemandhra air travellers are using the Hyderabad airport. Rest of them get down at the Chennai airport because it is just four to five hours of travel time to reach their destination by road from Chennai," he said.
The same can not be said about other areas such as engineering education that had expanded out of proportion on the back of a government fee-reimbursement scheme, either in Telangana or in coastal Andhra-Rayalaseema regions. During 2013-14, engineering institutions and the corresponding seats in the private sector alone were: 336 college and 170,000 seats in Telangana; 226 colleges and 108,000 seats in coastal Andhra and 122 colleges and 54,900 seats in the Rayalaseema region, according to government statistics.
While more than half of these seats remained vacant during the past few admissions, things are expected to become difficult after the bifurcation either in terms of governmental support or in terms of locational advantage for students who aspire for software jobs, currently available only in Hyderabad within the combined state.
An officer who was informally working on the issue of alternative capital for the successor state of Andhra Pradesh told Business Standard that the existing Nagarjuna University in Guntur district could be used for this purpose by relocating the students of the university to vacant buildings of a couple of engineering colleges that were already closed down.
The Centre has sanctioned two new ports for the coastal Andhra region since the economic development of the residuary state of Andhra Pradesh largely depends on how it can make the best use of its 1,000-km coastline. The financial package is expected to provide fresh impetus to construction and other economic activities in the coastal Andhra and Rayalaseema regions.
On the other hand, the power generation capacity in coastal Andhra, is going to make the residual Andhra Pradesh a power-surplus state, while Telangana will remain a power-deficit state at least for the next four to five years. Most of the gas-based capacity under power purchase agreements with state power utilities as well as the pure merchant power plants are just kept idle since there was no natural gas to run the plants. If Telangana starts building additional capacity, then the surplus power in coastal Andhra will have to find new markets.
Other than the airport, outer ring road and the metro rail project in Hyderabad, the rest of Telangana has no major physical infrastructure. Former Industries Minister J Geeta Reddy says that the region would be developed with a good road network in the Telangana state. The lack of a well-developed road network has been one of the prominent features of Telangana's backwardness. The Seemandhra region is far ahead in physical infrastructure, especially in terms of a road network, both rural and highways.
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