The Hindu Business Line : Volkswagen may drive to Vizag; MoU likely soon

VOLKSWAGEN AG, the German automotive major, is likely to enter into a memorandum of understanding (MoU) with the Andhra Pradesh Government on the greenfield Rs 5,400-crore automotive assembly line.

The MoU, detailing the concessionaire, is ready.

It is learnt that the carmaker has, after years of speculative reports and multiple rounds of parleys, and a scam that involved its India representative, has finally decided to locate its India plant at the port city of Vizag.

Ending speculation and also the possibility of the carmaker moving on to locate its India project in neighbouring States of Tamil Nadu, a traditional automotive and manufacturing hub, and Karnataka, this comes in as another shot in the arm from the State, which recently bagged the SemIndia project.

Coming out of the shadow of a Rs 11-crore payment scam, which involved pay offs to Mr Helmuth Schuster, the Volkswagen India representative, this development would see a team from Germany heading here to sign up for the project. All details of the memorandum, including the concessionaire and land related issues have been sorted out, it is reliably learnt.

After the scam broke out and a CBI inquiry was announced, the carmaker continued to explore other States, causing concern in the State political and administrative circles. But a recent communiqué from Volkswagen about the choice of site will pave the way for MoU next month.

In fact, the payment scam has had several heads rolling including a portfolio change of the State Major Industries Minister, Mr Botsa Satyanarayana.

The carmaker, which is itself going through a major restructure process, has been working on the proposed car plant in India to make it a regional hub. It is likely to assemble cars and light commercial vehicles and the choice of Vizag is aimed at shipping it to other parts of the region.

More Stories on : New Projects | Cars | Andhra Pradesh

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