Special Correspondent

German team holds talks with Government officials after inspecting site at Vizag

HYDERABAD: The German auto major Volkswagen has given fresh hopes to the State Government on the car project.

After inspecting the 300-acre site on Monday at Aganampudi at Visakhapatnam offered by the State Government for the car project, a five-member team of the company held daylong parleys at Hotel Taj Krishna here today with officials of the Industries Department. The team was led by Peter Walter, head of India Project, and Frank Elbe, former German Ambassador to India.

Details of the visit were kept a secret at the instance of the company. The team left for New Delhi after the talks.

However, a senior official later told The Hindu that the discussions had raised hopes about the project. "If the company is not interested in Andhra Pradesh, why should the Volkswagen team pay a visit within two months of earlier one to Tada in Nellore district ?" he asked. He said the talks were inconclusive with the German team not clearly indicating "yes" or "no" about the project. Frank Elbe was brought specially to defuse the difficult situation, if any, during the discussions.

According to sources, the discussions centred not around the sites offered at Visakhapatnam and Tada, but mainly on the likely concessions and incentives by the Government. The German team was keen this time to know the possible impact of VAT, which was introduced all over the country, on the project. Apart from reiterating the plea for reduced tariff for electricity and water supply, the German team sought clarifications on Central Excise.

The Government team was led by Principal Secretary, Industries, Lakshmi Parthasarathy.