Home India Adani pares AP investments from Rs 70,000 crore to Rs 3,000 crore
Adani pares AP investments from Rs 70,000 crore to Rs 3,000 crore

Adani pares AP investments from Rs 70,000 crore to Rs 3,000 crore

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Hyderabad : The Andhra Pradesh government headed by YS Jaganmohan Reddy has asked the Indian multinational Adani Group to credibly revise its investment plans with precise time frames and investments, making the Gautam Adani-headed conglomerate to substantially slash its investment plans.

This comes weeks after the new government in Andhra decided to reclaim around 4,700 acres of land allotted to Navayuga Group’s Krishnapatnam Infratech near Nellore after cancelling contracts of Polavaram irrigation and Machilipatnam port awarded to Navayuga by the previous regime of Chandrababu Naidu.

Adani group, which had agreed to invest Rs 70,000 crore over 20 years to set up solar-powered data centres in Visakhapatnam during Naidu’s regime has now decided to settle for an investment of Rs 3,000 crore over two years.

Confirming this, Andhra industries minister Mekapati Goutham Reddy told ET that it was part of the government’s exercise to assess the realistic commitments of the investors with exact timeframes and not overambitious ones so that the government can judiciously allot land to genuine investors. Reddy said the government cannot afford to leave huge tracts of precious land lying idle with investors in Vizag, a city on India’s east coast that the new government is trying to push as the next IT destination. As part of this exercise, the YSR Congress government will also review all the MoUs worth over Rs 4 lakh crore signed during the Naidu regime, he said, adding that “the government does not want non-functional MoUs.”

Accordingly, Adani will now settle for around 80 acres of land for its greatly reduced investment plan on digital technology infrastructure, down from around 500 acres that the Naidu regime had allotted at Vizag. The diversified conglomerate had on January 9 announced its single largest investment till date involving Rs 70,000 crore for the first-of-its-kind 100% renewable energy powered project in the world.

Adani had signed a MoU with the AP government in the presence of the then CM Chandrababu Naidu.

“In their (Adani’s) original DPR (detailed project report), they had asked for 500 acres of land and they had envisaged over a 20 year period that they would bring in this much (Rs 70,000 crore) of investment,” said minister Reddy, adding that the new government headed by YS Jaganmohan Reddy has found that many investors were sitting idle on land parcels allotted to them without any activity and pledging the land with lenders for raising large amounts of loans.

“We have asked them (Adani) what exactly is their actual investment plan. Their plan is for 20 years and we are not sure what is going to happen three years down the lane. We have asked them to give a realistic business plan as our policy is not to dole out huge land parcels for the publicity sake investments,” Reddy said.

Reddy said Adani group, when asked to submit a guaranteed investment plan with commitment, expressed inability to give guarantees on the proposed investments. Accordingly, Adani has conveyed to the Andhra government that it would confine their investment to around 80 acres of land with a plan of around Rs 3,000 crore for now. “Adani Group has conceived its first phase of Data Center Park in the land parcel of 89 acres at Kapuluppada and is committed to usher in the concept of Data Center Park with presence of Hyperscalers in a differentiated manner at Vizag,” an Adani spokesperson told ET.

Source : economictimes
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Anand Gupta Editor - EQ Int'l Media Network