In a set back to Moser Baer Infrastructures Developers, the Andhra Pradesh Government has issued orders withdrawing the memorandum of understanding (MoU) it had entered into with the company in 2008 for setting up a 100-acre Manufacturing Special Economic Zone here.

“With the company failing to respond to the queries, the Government has decided to cancel the agreement,” reliable sources in the Government said.

Under the agreement, the company was to pay a rental of Rs 15 lakh an acre for a period of 66 years to develop the project in two phases. The first phase was to have investments of $200 million within two years after signing the pact. In this phase, the company was to make solid state memory devices such as pen drives.

In the second phase, the company required to invest $300 million for manufacturing products such as semiconductor optical storage media and photovoltaic's thin film technology.

The company did not pay the lease premium despite notices sent by APIIC (Andhra Pradesh Industrial Infrastructure Corporation), the Government agency that took care of land allotment and development, to pay premium and submit relevant applications.

Eighteen months after signing the deal, the company told the Government that the global slowdown had hit the photovoltaic industry very hard and sought an extension of two years to take up the project.

Show-case notices

Based on a report prepared by APIIC, the Government issued show-case notices to the company in April, 2010, wondering why it should not withdraw the agreement. “Without giving any firm commitment assigning specific business plans, the company simply requested for an additional expansion of 24 months. They kept mum on the query as to why they had not paid the fee,” they said.

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