Tourism projects in Vizag in limbo, no pacts inked

By SNV Sudhir

Visakhapatnam, Dec 22, 2013: The state government’s ambitious tourism projects in Vizag, to showcase the city as the tourists’ next destination in Andhra Pradesh are in a limbo. The increased land prices and policy of state tourism department to entrust the projects to private players on lease basis instead of Hyderabad model of revenue sharing, had discouraged many potential private parties to take up the projects.

The consultant appointed by the Centre and the state government, IL&FS prepared more than 11 Detailed Project Reports (DPR), two years back and 29 firms responded to the global expression of interests called last year for five of the DPRs. However, none came forward to sign the agreements with the state government to kick start the works.

After identifying the city’s tourism potential and its rich natural resources, the union government in 2011 entrusted the job of preparing a blue print of ‘attractions’ to be set up in Vizag to India's leading infrastructure development and finance firm, Infrastructure Leasing & Financial Services Limited (IL&FS).

Except offering tour packages on a couple of websites of the tourism department there was no attempt to make outsiders know about Vizag. Apart from 17 tourist spots in the city, besides enchanting Araku valley, centuries old Borra caves, the north Andhra region has more than 100 heritage sites.

Of the 100 heritage sites more than 12 are age old Buddhist monuments which can attract tourists from most Asian countries.  Except Visakha Utsav which was held last in 2005 no event was held, even planned in recent times to showcase the city.

The IL & FS officials have prepared DPRs for around 11 mega tourism projects at a cost of Rs 1,800 cr. Of the 11, around 5 projects at a cost of Rs 850 cr were approved in principle by the union tourism ministry.

Global tenders were also called for 5 projects. Around 29 submitted their technical and financial bids, out of which, 28 were qualified. The tourism department had also finalised the tenders after receiving request of proposals from the successful qualified bidders.  But no firm has evinced interest in signing the agreements after looking into the actual modalities of handling the project.

The state government had fixed the land price at Rs 4 crs per acre and asked the successful bidders to pay 5 percent of the price as an annual lease amount per acre. The lease policy has discouraged the potential bidders.

The IL & FS has recently written to the state government to review the policy to attract investors. “The lease model is not at all viable. Each project requires at least 20 acres of land and after that they need to pump in so much of money to develop the tourist attraction. Whereas in Hyderabad, state adapted revenue sharing model for projects like HICC, Samshabad airport, which is viable and encourages investors. Unless state government changes the policy no project can be grounded in Vizag. We should have actually signed the agreements and grounded the projects by now. Hope we get a positive response from the state government for the letter we have written on change in the pattern. We are waiting for that to go ahead,” a top official at IL &FS told this correspondent.

The 5 DPRs belonged to Multi Theme Park at Madhurawada in 100 acres, Wonders of the world park at Yendada in 40 acres, international convention centre at Madhurawada in 20 acres, science city near Thotlakonda in 25 acres and Arogyadham-traditional health care centre at Madhurawada in 20 acres.

The remaining 6 projects are giant Ferris wheel, Vizag Eye, on the lines of London Eye,  fourth generation aqua Marine Park with 180degree view, for which a suitable location is identified at Endada, a sea cruise terminal, dedicated tourism train to Araku, rope way at Meghadrigedda and another theme park. All the works would be taken up under PPP mode.