Prolonged economic slowdown, and the fallout of demonetisation and Goods and Services Tax (GST), besides shortage of land, have hit the growth of industries in the North Andhra region during 2017.
Despite Visakhapatnam generating a lot of interest on the investment front from within and outside the country at the CII Partnership Summit, no major project has been grounded during the year.
Logistics park
There is, however, good progress with regard to multi-modal logistics park being established by the Container Corporation of India and the Visakhapatnam Port-Balmer Lawrie as a joint venture.
“The slump has hit hard everyone. The impact of demonetisation and GST is temporary. We are expecting that some changes sought in the GST rates will materialise during the new year,” pointed out State president of A.P. Chamber of Commerce and Industry Federation G. Sambasiva Rao.
SriCity prominence
He said, of late, the demand for investment is growing in South Andhra Pradesh, mainly Nellore, due to the location of SriCity and its close proximity to Chennai and Bengaluru.
“If land bank is created and given to the industries, definitely Visakhapatnam is the most favoured destination for the investors,” Mr. Rao said.
The Visakh Refinery Modernisation Project launched by the HPCL at a cost of ₹20,928 crore, the largest after bifurcation, to expand the capacity of the refinery from 8.33 million tonne to 15 million tonne is progressing as per schedule. Engineers India Limited is the project management consultant for the Brownfield venture.
Capital blues for RINL
Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant, is hit by working capital crunch as well as adverse market conditions.
In the later part of the year, it was affected due to iron ore supply from the NMDC on account of non-payment of dues and suspension of rail traffic on the Kottavalasa-Kirandul section, the lifeline for the ‘navratna’ company.
One welcome feature during the year is the ramping up of units under the ₹12,300-crore 6.3 million tonne expansion project of RINL.
It is currently modernising the blast furnaces with pulverised coal injection technology at a cost of ₹4,000 crore to increase the capacity further by one million tonne.
A setback
A major setback during the year is the shelving of the ₹26,828-crore 4,000 MW coal-fired Pudimadaka Super Thermal Power Project by the NTPC.
Though an official declaration is awaited, for all practical purposes NTPC has dropped the project.
It was conceived to generate power with imported coal. Now, due to change in policy, NTPC has been asked to produce power with domestic coal, which the power major considers technically and financially unviable.
Industrial corridor
There is not much progress on developing the Visakhapatnam-Chennai Industrial Corridor mooted with the funding of $625 million by the Asian Development Bank and $215 million by the State government and other sources.
Visakhapatnam Port faced a setback due to stoppage of work on coal and steam coal berth by SEW Infrastructure and coal berth by Adani.
The port is in the process of cancelling the concession agreements and exploring various options to make them operational.
Notwithstanding the slump and diversion of certain cargoes to the neighbouring ports, the Visakhapatnam Port is confident of achieving the target of 65 million tonne during the current fiscal.
“Our thrust is on increasing techno-economic efficiency parameters and offering handling and other charges at a competitive rate,” says VPT Chairman M.T. Krishna Babu.
Land acquisition is in progress for the nuclear power plant at Kovvada in Srikakulam district by the Nuclear Power Corporation of India Limited (NPCIL). The project will involve a total investment of ₹1 lakh crore.
Land acquisition for the Bhogapuram International Airport under the Land Pooling Scheme in Vizinagaram district is also on the verge of completion.
Brandix plans
Brandix India Apparel City located at Atchutapuram has big employment plans for women with efforts to woo investors in the world-class apparel park. It has already provided employment to 18,000, most of whom being women from the rural background.
The recent inauguration of air cargo complex at the Visakhapatnam International Airport has brought cheers among the seafood exports, pharma and apparel units due to the prospects of reducing the logistics cost and earning more foreign exchange.
