The Hindu Business Line : AP to form SPV for development of leather complex in Nellore

Hyderabad, May 5 The Andhra Pradesh Government is looking at creating a special purpose vehicle (SPV) for procuring land for the development of a 413 acre International Leather Complex at Krishnapatnam in Nellore district. .

Official sources told Business Line that while Leather Industries Development Corporation of Andhra Pradesh (LIDCAP) will have a 51 per cent stake in the SPV, the rest will be with Andhra Pradesh Industrial Infrastructure Corporation (APIIC).

G.O. soon

“The State Government is likely to issue a Government Order to this effect soon,” the official said.

He added that it was necessary for the SPV to be formed as around 300 acres have to be procured from Andhra Pradesh Power Generation Corporation Ltd (APGenco).

“Since LIDCAP does not have the required finances for procuring the land, APIIC has suggested that they will pay APGenco for the land for equity in the SPV. And the rest of the 113 acres is in possession of APIIC and they are ready to transfer it to LIDCAP or the new SPV company,” the official said.

LIDCAP had earlier entered into a memorandum of understanding with the Chennai-based Central Leather Research Institute (CLRI) to prepare a project report for the Leather Complex.

“As per the project report submitted by CLRI, the projected cost is around Rs 180 crore. The Central Government has approved to part fund the project by giving a grant of Rs 30 crore, we are also looking for a matching grant from the State Government,” the official said.

Little investment

The official also said that APIIC apart from transferring the land for picking up equity in the SPV might be looking at a little investment in the Leather Complex. “We are also thinking of inviting private developers for the internal development of the land,” he added.

According to Government estimates, the global trade in leather and leather products has been increasing substantially over the years and India roughly contributes 10 per cent of the raw material to the world. .

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