The Hindu Business Line : AP asks Volkswagen to `come out with stand on car plant'

Wrong drive
`THEY (VOLKSWAGEN MANAGEMENT) had bargained for host of concessions and after the State accepted them they began negotiating with other States with the package of incentives. This is not a pleasant scenario.'

DR Y.S. RAJASEKHARA REDDY

Hyderabad , Sept. 13

The Andhra Pradesh Government has written a letter to the management of Volkswagen AG seeking its stand on the proposed Indian car plant.

This move comes in the backdrop of recent reports about the company board approving the India car plant to serve as a hub for the region.

Addressing presspersons here on Wednesday, the Chief Minister, Dr Y.S. Rajasekhara Reddy, said that the Government has sought the German automative major's stand on the project and the progress since the agreement with their emissary, Mr Helmut Schuster.

Over the last week, there have been reports that the company was close to finalising plans with either Punjab or Maharashtra Governments for the Rs 1,800-crore greenfield plant.

Concerned about the lack of communication from the company management about the project status after several rounds of negotiations, Dr Reddy said "We have requested the Volkswagen management to come out with their stand on the project as Mr Schuster, representing the company, had entered into a memorandum of understanding with the State."

"They chose to work with Andhra Pradesh even though they had interests in other parts of the country (referring to its subsidiary Skoda Auto plant in Maharashtra). Nothing has changed since then.

"In fact, they had bargained for host of concessions and after the State accepted them they began negotiating with other States with the package of incentives. This is not a pleasant scenario," he said.

Asked if the State was contemplating initiating legal proceedings against the company, Dr Reddy said, "Such reports are purely speculative in nature."