Economy

Telangana turmoil, recession put brakes on most projects

Our Bureau Visakhapatnam | Updated on January 13, 2011 Published on January 13, 2011




Ever since 2004, when the Congress wrested power from the Telugu Desam in alliance with the Telangana Rashtra Samiti in Andhra Pradesh, it has always been a talking point — the likely impact of the Telangana agitation on the growth of the rest of Andhra Pradesh, especially the Visakhapatnam-Kakinada corridor.

After seven years, the issue has not been resolved yet.

The Srikrishna Committee appointed by the Union Home Ministry has submitted the report recently, listing six options but in effect favouring only two — conditional integration of the State with a regional council for Telangana or, if it is inevitable, the bifurcation of the State.

There does not seem to be an end in the near future to the uncertainty and the political instability in the State, following the death of Y.S Rajasekhara Reddy, and none of the projects proposed by him during his first term as the Chief Minister is taking off. Several special economic zones (SEZs) and other major projects have been proposed, or are under implementation, between Visakhapatnam and Kakinada such as the Kakinada Special Economic Zone (KSEZ), the Petroleum, Chemical, Petro-Chemical Investment Region between the two port towns, the multi-product SEZ at Atchyuthapuram in Visakhapatnam district and the IT special economic zones.

All these projects — taken up with private sector participation — have suffered and they are almost at a standstill.

Telangana is not the only problem, of course, and the global economic recession has also impeded the pace of progress of many of the projects, but the political instability in the State has compounded the problem. For instance, even the consultant has not been appointed for the proposed PCPIR between Visakhapatnam and Kakinada.

The KSEZ is still languishing, even though the land acquisition has been completed. The pharma city at Parawada in Vizag district, the SEZ at Atchyuthapuram, the Brandix apparel park and the IT SEZs are making slow progress.

The only projects unaffected by the political climate in the State or global recession are the ones taken up by the public sector units — the expansion project of the Visakhapatnam steel plant and the project to expand the capacity of HPCL refinery and several projects taken up by the Visakhapatnam port to augment its capacity.

If there is any delay in the expansion projects of the PSUs, it cannot be blamed on the two factors cited above. It may be due to other factors.

Real estate

The realty sector has shown signs of recovery in the past six months or one year in Visakhapatnam, with most of the apartment projects getting completed and sold out and prices showing some recovery on the outskirts, but there have been no major projects taken up by private companies.

They are adopting a wait-and-watch stance keeping in view the Telangana issue.

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Published on January 13, 2011
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