For Andhra Pradesh devoid of a proper capital as well as a big commercial city after historic Hyderabad went to Telangana in the bifurcation, organising an investors’ meet is an audacious move in itself. In this backdrop, turning such an event into a successful one is by no means a small achievement. That way, the residual AP had more or less emerged victorious from the recent CII Partnership Summit at Visakhaptnam, with the three-day event – the State’s maiden attempt at attracting investments after the division – generating over Rs 6 lakh crore in total investment proposals earlier this week. If grounded, these projects will provided over 10 lakh new job opportunities across AP.
Irrespective of what percentage of the 330-odd MoUs inked and a slew of large scale projects from central government announced at the event will turn into a reality, the meet has definitely put Brand AP into a new orbit of industrial growth.
Contrary to initial fears by organisers about the kind of response that the Partnership Summit would evoke given the infrastructure bottlenecks in Visakahapatnam, nearly 1,600 delegates made a beeline to the coastal city and the delegate count, to the delight of organisers, comprised about 400 foreign participants, representing 41 countries. Importantly, a large number of Non-Resident Indians (NRIs) also landed in the steel city to explore feasible avenues for their investments. As result, organisers had to scramble for providing accommodation to all the delegates as the coastal city is home to not more than 400 luxury and five-star hotel rooms.
Nonetheless, enthusiasm among the participants was palpable as the venue, a spacious temporary structure constructed at Harbour Park in the city, was abuzz with activities all three days. General trend at such events is that the delegate count starts heading south after the first day and hits the nadir on the final day. But the 22nd edition of Partnership Summit, a joint effort of industry body Confederation of Indian Industry (CII) and Andhra Pradesh government, was starkly different in the sense that the event saw large attendance even on the third and final day, indicating keen interest among investing community on the investment prospects in AP. Moreover, majority of the companies and business groups which took part in the summit had inked one memorandum of understanding (MoU) or the other.
Among the corporates that offered big ticket investments to AP included Anil Dhurabhai Ambani Group (ADAG) led by Anil Ambani, the younger Ambani scion, which inked agreement with the State to set up Rs 5,000-crore shipbuilding facility in Visakhapatnam. Homegrown Amara Raja Group also lined up Rs 5,000 crore for expansion and new ventures, while Essel Group led by media baron Subhash Chandra came forward to pour in $2 billion (about Rs 13,500 crore) on a solar equipment plant, in joint venture with China’s Golden Concord Holdings Limited (GCL). The two entities will also set up a smart industrial park that, they claim, will bring in an additional investment of $9 billion (Rs 61,000 crore). Australia’s Queensland Coal Corporation signed a deal to establish 5,280-MW thermal power plant that would entail investments to the tune of Rs 30,000 crore. Petrogas Pvt Ltd, a JV between Isomeric Holdings Bhd from Malaysia and Vijayawada-based LEPL Ventures, is also set to construct a regasification and floating storage LNG terminal at Krishnapatnam Port with an outlay of over $500 million. In the retail space, global giant Walmart and India’s retail majors such as Future Group, Spencer’s and Arvind, have signed big ticket investment deals.
Public sector entities also did not lag behind, with local major Rashtriya Ispat Nigam Limited (RINL), which operates Visakhapatnam Steel Plant, committing a whopping Rs 38,500 crore that will go into expansion and other works. The Housing and Urban Development Corporation (Hudco) and Andhra Bank extended Rs 7,500 crore and Rs 5,000 crore respectively towards development of infrastructure in and around Amavarati, the Greenfield capital city that’s coming up near Vijayawada. The icing on the cake is the slew of announcements made by Union Minister for Chemicals and Fertilisers Ananth Kumar, involving expansion of HPCL refinery in Visakhapatnam and a Greenfield petrochemical complex which together bring close to Rs 60,000 crore into AP.
But how could AP, a State without proper capital and sufficient infrastructure, attract so many investments in its first attempt itself? Many attribute the success of the Partnership Summit to what they call ‘Brand Naidu’. The fact that AP secured second rank in World Bank’s ‘Ease of Doing Business’, had also come in handy. Chandrababu Naidu, known for his business-friendly attitude and popular as darling of investors, had pulled all the strings and leveraged his friendships in the business circles to make the event a resounding success. But the experienced Chief Minister of Andhra Pradesh has two bigger challenges before him now. One of them is to convert the investment proposals received at the event into a reality. As the strike or conversion rate of MoUs signed at the previous Partnership summits and other investor meets is abysmally low and sometimes in the range of five per cent, it’s not going to be an easy task for Naidu, despite his long experience and track record of chasing investors with dogged determination, to see that even 25 per cent of the agreements signed at Visakhapatnam are grounded before next edition of the event takes place in the same city in early 2017.
Secondly, he should also exercise caution, keep in mind the collateral damage that any rapid industrialisation causes to environment, and opt for clean growth – an economic progress that inflicts minimum or no damage to the environment. Otherwise, lush green fields that dot its 974-km long coast line will turn into a cesspool. And that will definitely be a great disservice to AP’s future generations. It’s really intriguing to see how Andhra Pradesh and its Chief Minister strike a balance between industrial growth and environment protection, while pursuing the enticing new investment proposals that are on the table now.