Finally, Andhra Pradesh has been divided and 29th state in the form of Telangana has been created. No doubt, united Andhra was one of the favourite investment destinations in the recent times. But the creation Telangana has created a cloud of uncertainty in the minds of investors who have seen a spate unrest and protests in Hyderabad and parts of Seemandhra. According to ProjectsToday database, Andhra Pradesh had over 4,075 live projects worth Rs. 8,00,096 crore as on 31 Jan 2014. However, for our analysis of the impact of bifurcation of the state, we have chosen five projects of Telangana which are currently under execution or have been completed recently.
Hyderabad Information Technology Investment Region
The central government recently approved the formation of an Information Technology Investment Region (ITIR) near Hyderabad. The project involves development of self-contained integrated knowledge clusters for growth of IT and electronic hardware manufacturing. According to the government ITIR project is likely to attract an investment of Rs.2.19 lakh crore. However, after the bifurcation of the state, these projections may have to be reworked. Also, an important factor to be noted is that Telangana is likely to face power shortage of up to 2,000 MW after the state is formed which may discourage potential IT companies from investing in the region.
Indira Sagar Polavaram Project
It is interesting to see the impact of creation of new state of Telangana on Indira Sagar Polavaram Project. In case of Polavaram project most of the displacement will take place in Telangana while districts in Seemandhra will utilize the water available form the irrigation project. Also there is an allegation that most of the contracts of Polavaram projects were bagged by the contractors from Coastal Andhra. The project will provide irrigation facilities to an extent of 7.20 lakh acre in Visakhapatnam, East Godavari, West Godavari, and Krishna districts. It will also provide 23.44 TMC of water supply to Visakhapatnam city and industries en route villages. Though the government has declared the Polavaram irrigation project () as national project, it is unlikely that the project will have a smooth ride in the coming days. Polavaram project is key to the industrial development of Seemandhra in the future.
Hyderabad International Airport
Hyderabad International Airport has already completed the first phase of the project in March 2008 and has the capacity to handle 12 million passengers per annum. The airport has the provision to increase its capacity to 40 MPPA which will be done in a phased manner. However, with the bifurcation of Andhra, GMR may have to rework the passenger growth projections for the airport as Seemandhra is likely to have another airport which will impact the passenger growth at Hyderabad. Under such circumstances, long term viability of the project remains suspect.
Hyderabad Metro Rail Project
Speed breaker on tracks is not very uncommon for Hyderabad Metro Rail project. First, it was Satyam scam which delayed the project and now T factor which is likely to cast its shadow over the project. As a result the cost of the project too has moved northwards, from Rs. 6,000 crore in 2003 when it was conceptualized to Rs. 15,000 crore at present. More importantly, Telangana Rashtra Samithi (TRS) is demanding certain stretches of Hyderabad Metro to go underground to avoid evacuation of project affected people. If that happens, project cost too will shoot up to Rs. 20,000 crore and the viability of the project may become a subject of debate.
Further the project was conceptualized when the united Andhra was the reality and with the bifurcation of the state certain statistics like potential growth in passengers may have to be reworked. With the creation of Seemandhra which will have its own Capital in next ten years, influx to Hyderabad city from other parts is likely to be less than what one might have projected at the time of project conceptualization. This in turn may impact the yearly growth in passenger traffic in the city.
Lanco Tech hills project
Lanco Hills Technology Park has set up a township ‘Lanco Tech Hills’ SEZ project at Manikonda in Hyderabad district spread over 100 acres of land. The project consists of:
- 12 towers of 15-20 levels with various floor plans and sizes ideal for IT and ITES enterprises
- 16 residential towers of 30 floors each with various amenities
- Recreation zone with a 12-screen multiplex and 22 acre lake
- Service apartments and two international hotels (5-star and 4-star)
- A commercial complex with several retail and business outlets
The project estimated to cost Rs. 7200 crore. However, with the change in the map of the state, the project details may have to be reworked. Pepper spray in the Parliament may keep haunting Lanco for long time to come.