Division pangs: AP Bill lets down north Andhra

By SNV Sudhir

Visakhapatnam, Feb 13, 2014: The AP reorganization Bill that was introduced by the union government in the Loksabha on Thursday offered nothing new to North Andhra, especially Vizag.

The Centre’s representatives have repeatedly  boasted of announcing best economic package for Seemandhra development post state bifurcation. Justice B N Sri Krishna committee report also points that north Andhra and Rayalaseema regions are most backward than Telangana and needs attention.

As per the thirteenth schedule of the Bill, the GoM recommended 11 infrastructure projects for the development of Seemandhra. Of the 11, three projects belonged to  Vizag. The two major projects, setting up of refinery by HPCL or IOCL in Vizag and metro train proposal that found a mention are old and were sanctioned long ago.

The HPCL’s proposed refinery is touted as the anchor project of the much talked PCPIR planned between Vizag and Kakinada which was sanctioned by the union government in 2005. HPCL had approached the AP government for the land in 2005 and was subsequently chosen as an anchor client for the PCPIR.

The company at that time was looking at setting up a 15-mtpa refinery with a consortium of five companies, including Mittal Energy and TOTAL of France, which had apparently backed out of the project due to various reasons. Subsequently, APIIC cancelled the allotment of 1,500 acres for not grounding the project and returned the money to HPCL.

Later in the middle of 2013 HPCL again approached the APIIC with a revival plan seeking allotment of land. The State run oil major now proposed to set up a 9.5 mtpa refinery, which will cost around Rs 20,000 crore initially, instead of 15 million tonne as envisaged earlier. 

However, HPCL is said to have informed APIIC that subsequently capacity would be doubled to 18 mt in the coming years. The fresh application by the HPCL is under active consideration of the APIIC. However, sources in APIIC said that they are now looking for time bound assurances on the execution of the project from HPCL.

Barring the proposal to be examined within 6 months for the feasibility either by HPCL or IOCL, the Bill didn’t give any impetus to the development of the region.    

Similarly, the metro rail proposal has been there since 2011, and GVMC had already initiated plans to prepare DPR for the project. In November last year, union government gave a nod for preparation of Detailed Project Report (DPR) and asked to get ready Terms of Reference (ToR) for the consultant who would be assigned the work.

Union Government had announced Metro Rail policy and the GVMC had forwarded a report with the details of the cost to be incurred to prepare a DPR for a 20-km stretch in 2011. The GVMC estimated that it would cost at least Rs 8 lakh per kilometer for the
initial 20-km stretch and it costs Rs 1.6 crore only for preparing the project report.

Both the state and union governments would equally share the total cost to prepare the DPR. Subsequently, the Andhra Pradesh Urban Finance and Infrastructure Development Corporation (APUFIDC) sanctioned funds for taking up a detailed study on the metro rail
project and the Central government has sanctioned Rs.80 lakh.

The state government is yet to finalise the agency that takes up the DPR preparation. It is estimated that a km of metro rail project cost around Rs.220 cr. The entire metro rail project will be funded by the union government.

“Its very clear that the union government was just trying to do the ‘gold plating’ to make Seemandhra people believe that the region would flourish after the bifurcation with these infrastructure projects. Whereas there are no new proposals. They are just trying to deceive public by these promises,” observed  Uttaranhdra Rakashna Vedika secretary, DVT Ganesh.

• The two major projects, setting up of refinery by HPCL or IOCL in Vizag and metro train proposal that found a mention are old and were sanctioned long back.

• The HPCL’s proposed refinery is touted as the anchor project of the much talked PCPIR planned between Vizag and Kakinada which was sanctioned by the union government in 2005. HPCL had approached the AP government for the land in 2005 and was subsequently chosen as an anchor client for the PCPIR.

• Subsequently, APIIC cancelled the allotment of 1,500 acres for not grounding the project and returned the money to HPCL.

• Later in the middle of 2013 HPCL again approached the APIIC with a revival plan seeking allotment of land.

• The State run oil major now proposed to set up a 9.5 mtpa refinery, which will cost around Rs 20,000 crore initially, instead of 15 million tonne as envisaged earlier. 

• Similarly, the metro rail proposal has been there since 2011, and GVMC had already initiated plans to prepare DPR for the project.

• In November last year, union government gave a nod for preparation of Detailed Project Report (DPR) and asked to get ready Terms of Reference (ToR) for the consultant who would be assigned the work.

• The GVMC estimated that it would cost at least Rs 8 lakh per kilometer for the
  initial 20-km stretch and it costs Rs 1.6 crore only for preparing the project report.

• It is estimated that a km of metro rail project cost around Rs.220 cr. The entire metro rail project will be funded by the union government.