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It was about 7 in the evening when Business Line ended a 30-minute chat with Mr M. Velmurugan, the Executive Vice-Chairman of the Tamil Nadu Industrial Guidance and Export Promotion Bureau. Mr Velmurugan regretted his inability to speak any longer about the investment climate in Tamil Nadu. “Now I must have my lunch,” he said.
An ‘evening lunch' has become a part of the routine of Mr Velmurugan, who has headed the guidance bureau for over a decade now. Incessant meetings with prospective investors, presentations and site visits are only to be expected of an agency tasked with wooing, and guiding, investors into the State. But Mr Velmurugan also has to often run to the airport to receive a VIP investor and see him through immigration.
In short, hand-holding.
These efforts have not been in vain. In the last five years, Tamil Nadu has secured investment commitments of Rs 62,350 crore.
“In the pipeline, there is Rs 22,000 crore more,” said Mr Velmurugan, “not counting the fence-sitters.”
The “fence-sitters”, though Mr Velmurugan declines to name them, include the likes of Peugeot, LG and Alstom, who have their legs hanging on the Tamil Nadu side of the fence. And the pipeline is set to get fatter.
Last year, the Tamil Nadu government sent two high-level delegations to Japan, Korea and China and these have been of consequence. “Not a day passes without me meeting one Korean and two Japanese (potential) investors,” said Mr Velmurugan.
From a year ago and until recently, the Japanese interest in Tamil Nadu was huge, but the recent tragedy the country is facing is bound to slow down any investing, and that will perhaps help Mr Velmurugan have a more timely lunch. But the Korean and Chinese companies are still there.
Mr Velmurugan points to a notable feature of Tamil Nadu's industrialisation — investments are widespread.
In the last three years, the southern districts have secured investment commitments of Rs 11,000 crore in manufacturing — apart from a similar amount in power generation. ATC Tyres, Videocon, Sundareswarar Alloys are some examples of new projects coming up in the southern districts.
The attraction is cheaper land and the incentive package for those who invest in this region.
What could potentially be dampeners to this kind of investment flows? Land is aplenty, so is manpower.
Infrastructure bottlenecks do exist, but they are not believed to be deal-breakers.
By far, the only constraining factor is the availability of power. And that is getting solved.
At least five power projects are on track to get completed either in 2011 or by mid-2012 — Mettur (600 MW); North Chennai (1,200 MW), Coastal Energen — of the private sector ETA group — (1,200 MW); Neyveli Lignite Corporation (500 MW) and Kudankulam nuclear power project (2,000 MW).
At a conservative estimate (allowing for delays), Tamil Nadu will be better off by 3,000 MW by the end of 2012 for sure.
Today the State's peak power deficit is about 2,000 MW. This means that by the beginning of 2013, Tamil Nadu will be able to meet all its power requirements.
The message is clear: If an investor is to think of a project now, by the time his plant is ready to begin production, there will be sufficient supply of power to it.
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