Andhra Pradesh team to visit Wolsberg

M. Malleswara Rao

HYDERABAD: An official team of the Andhra Pradesh Government will soon go to Wolsberg at the invitation of the German carmaker, Volkswagen, to ascertain the developments leading to the payment of Rs. 11 crores to a Delhi-based agency, Vasishta Wahan.

The State Government had paid this amount to the agency as an advance at the instance of Helmut Schuster, who recently quit as Chief Executive Officer of Volkswagen India project, according to D. A. Somayajulu, Adviser to Government, Economic Affairs and Policy Implementation.

The BJP has demanded the dismissal of Major Industries Minister Botcha Satyanarayana, while the Telugu Desam Party, which brought the issue to light, met Mr. Somayajulu on Wednesday seeking important files relating to Volkswagen's correspondence about its proposed car project at Visakhapatnam. The CPI(M) also described the Government's explanations as unconvincing and wanted a detailed statement from it.

Special purpose vehicle

Mr. Satyanarayana, who is at the centre of the controversy as he had made an official visit to the Volkswagen plant recently along with his brother, said the money paid to Vasishta Wahan was as good as making a payment to the parent company. Vasishta Wahan was a special purpose vehicle (SPV) constituted at the instance of Volkswagen for the joint venture project.

Seeking to dispel doubts whether the money was safe, Chief Minister Y. S. Rajasekhara Reddy said, "We made enquires with a reputed financial consultant in Mumbai, and they said we can remit the money".

Mr. Satyanarayana and Mr. Somayajulu said Volkswagen had written a letter stating that Vasishta Wahan was indeed its nominee. The team visiting Germany will consist of the Commissioner of the Industries, Sutirtha Bhattacharya, Mr. Somayajulu and others. It will carry all the files handled by Mr. Schuster as also the correspondence between Volkswagen and the Government relating to Vasishta Wahan.

Probe scope widened

According to sources, the scope of the inquiry ordered by the Volkswagen against Mr. Schuster has been widened to cover his role in India, especially Andhra Pradesh.

The State Government is keen that Volkswagen's car project, which has been negotiated since 2002, should be located in Visakhapatnam. The Andhra Pradesh team, during its discussions in Germany, will also ask the Volkswagen executives to make the project 90 per cent indigenous so that the price difference of the proposed car could be covered. A Volkswagen team that visited the State estimated the price of their proposed car at Rs. 30,000 higher than that of Maruti.

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