Minerals will be andhra building blocks

Post-bifurcation, Andhra Pradesh, with 13 districts, has a lot going for it as it starts to develop the ‘new’ State, a capital and support infrastructure.

The region, mainly dependent on Hyderabad — and to some extent on Chennai and Bangalore — for its international links, will now have to develop its own international airport. The airports at Visakhapatnam, Tirupati, Vijayawada and Rajahmundry are at best basic.

Even the unified State of Andhra Pradesh had a relatively poor record in terms of attracting large manufacturing units such as automobile companies.

However, the long coastline, fertile coastal districts, oil and gas reserves in the Krishna-Godavari (KG) basin, and the huge mineral resources in the Rayalaseema region should attract investments.

The KG basin has thus far proved disappointing for Andhra Pradesh, with output from the Reliance Industries fields dwindling. This has left nearly 5,000 MW of gas-based projects stranded.

However, there is fresh hope on the revival of output from KG basin wells.

RIL has indicated that it will step up output, GSPC is close to starting production, and State-owned ONGC has indicated that huge investments in the region are in the pipeline.

These can attract downstream projects. The stranded gas plants are awaiting the setting up of new LNG terminals at Kakinada and near Visakhapatnam.

These will enable gas plants to operate, even if at a higher cost, till gas flow increases from KG basin.

The long-planned Petroleum, Chemical and Petrochemical Region (PCPIR) has much potential, but the State has so far failed to attract investments. Similar is the case with the industrial corridor between Visakhapatnam and Kakinada.

Mineral projects

Rayalaseema has not been much of an investment-puller, barring some projects in the minerals sector. The NTPC-BHEL power equipment unit near Tirupati was among the big investments in the recent past, but this too is yet to be completed.

The other major initiative has been Sri City, the integrated industrial and business hub in Chittoor district, about 55 km from Chennai. This has managed to attract several large MNCs and many others are in talks to invest in infrastructure.

The proposed industrial corridor between Chennai and Bangalore is expected to pass through Rayalaseema, triggering more investments. Japanese lending agency JICA is keen to be part of the corridor and electronics units from Japan are looking at making their base in AP.

For the new Government under N Chandrababu Naidu, it will be the beginning of a long journey in seeking to attract new investments.

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