The Hindu Business Line : Blame game over Volkswagen issue

Even as Volkswagen has decided to set up its plant in Pune, putting to rest all speculation, the issue has refused to die in Andhra Pradesh, with the Opposition and the ruling Congress blaming each other.

Chief Minister Dr Y.S. Rajasekhara Reddy reacted sharply to the Telugu Desam remarks that the shift of venue from Visakhapatnam to Pune was a failure of the State Government.

Speaking to newspersons on Monday, Dr Reddy gave a blow-by-blow account of the whole issue since it began four years ago during the Telugu Desam Party (TDP) rule.

Terming TDP leader Mr Chandrababu Naidu's remarks as objectionable, he said that Mr Naidu himself had announced several times during his tenure that Volkswagen would set up the manufacturing facility at Visakhapatnam.

The then Government even offered sops worth Rs 709 crore - or more, if sales tax concessions were to be included - for a unit that was worth Rs 1,350 crore, he said.

He also reminded the announcements on "arrival of General Motors, Ford Motors, Hyundai and Honda" to the State. The reason behind the company's decision to shift to Pune was basically because of the availability of the strong base of vendor and ancillaries. "The TDP that ruled the crucial phase when the auto industry boomed did not bother to improve that kind of environment here," he said.

MLR offer

Terming the shift of venue as "unfortunate," the Chief Minister said that the Government had already initiated efforts to invite other auto companies. "MLR has come forward to set up a Rs 1,200-crore facility. They have asked for land and we have agreed."

Dr Reddy also said that only a small fraction of the investments promised during CII partnership summits actually materialised.

In the 2000 edition of the summit, as many as 23 MoUs were signed for investments worth Rs 22,877 crore. "But actual investments that came out of those pacts were just Rs 83 crore."

The two successive summits fared no better, with actual investments of Rs 99 crore (pacts worth Rs 17,000 crore) and Rs 212 crore (Rs 7,000 crore) respectively.

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