Is Chennai losing out to SriCity?

[Darmashkian]

Ever since lame duck Panneerselvam took over as Chief Minister, the TN govt has gone into stasis. Tamil Nadu is crumbling. I fervently wish Jaya takes over soon or else we're heading into the rabbit hole.

Why.. Is he That bad at governance?

& Is he basically a Rabri or a MMS??

 

[wolfschanzze]

Is Chennai losing out to SriCity?
Many firms are opting for SriCity in Andhra Pradesh, driven not only by the facilities there, but also due to a simultaneous slide in Tamil Nadu

SriCity is a manufacturing hub comprising a special economic zone of 2,700 acres and a domestic tariff area of 4,300 acres. Photo: Sharp Image

Chennai/Hyderabad:-

About a year ago, Isuzu Motors Ltd was scouting for a plot of land in India where it could open a factory. The Japanese auto maker wanted to set up its base in India from where it could export with ease to Thailand, its largest market for pick-up trucks.

The place it chose was near Chennai, but not in the Sriperumbudur-Oragadam belt, about 45km from the city, that is famous as the home to some major auto factories in India, including Daimler India Commercial Vehicles Pvt. Ltd, Hyundai Motor India Ltd, Renault-Nissan and Ashok Leyland Ltd.

Instead, Isuzu chose to set up in SriCity, just 55km further north, but in Andhra Pradesh, not Tamil Nadu. When Isuzu made the announcement in January, it became the latest in a long line of large multinationals that have opted to manufacture in SriCity rather than the industrial belts of neighbouring Tamil Nadu.

A host of companies have been opting for SriCity, driven not only by the latest facilities it offers, logistical ease and government subsidies, but also by a simultaneous slide in Tamil Nadu—marked by erratic power supply, delays and bureaucratic hurdles. Central government financial aid in the process of creating Telangana state from Andhra Pradesh, in June last year, may also be a factor.

SriCity lies 55km from Chennai, an hour-and-a-half to two hours by car, depending on the traffic, on the national highway. It’s a manufacturing hub comprising a special economic zone (SEZ) of 2,700 acres and a domestic tariff area of 4,300 acres. Isuzu Motors is setting up a manufacturing unit at a cost of Rs.3,000 crore to make 50,000 pick-up trucks per year by 2016.

Construction work is proceeding apace in SriCity, evident from the yellow cranes and earth movers that are busy levelling the land at the Isuzu Motors factory and other locations.

Neighbouring Isuzu Motors is another Japan-based company, the Kobelco group that has set up three firms in India—Kobelco Cranes India Pvt. Ltd, Kobelco Construction Equipment India Pvt. Ltd and Kobelco Plate Processing India Pvt. Ltd. They are among around a dozen Japanese companies that have either set up or are in the process of setting up factories in the complex.

Piolax Inc., a Japanese auto parts company, opened in SriCity in spite of the fact that it needs to supply its goods to Nissan Motor Co. Ltd, whose unit is based in Oragadam. Under the public-private partnership model, the government of Andhra Pradesh has granted single-window start-up approvals for setting up in SriCity, along with functional infrastructure approvals.

A distance of 10km is covered within minutes along neatly laid two-way lanes and lined by plants on either side of the road, giving the place the look and feel of a well-planned industrial park. Having attracted private equity investments from Och-Ziff PE Fund, Credit Asia Capital, Bedrock Llc US and Chintalapati Holdings, SriCity has brought some benefits for other states—labourers from Bihar, Jharkhand and Odisha have been working on the parched land where factories are in different stages of construction.

“I get paid Rs.5,000 a month and send back money home to my family,” said 40-years-old Kirodh Chawan from Bihar, who works on a construction site near a Unicharm plant that makes MamyPoko Pants diapers.

Even Tamil Nadu is a beneficiary—the factory that is making coaches for the planned Chennai Metro is at Sri City. Alstom Transport has an order worth €243 million to supply train cars for Chennai Metro.

“We did not find the usual tangles a company would face while setting up a large facility; the Andhra Pradesh government played a proactive role and clearances were quick,” said a spokesperson for Isuzu Motors India Pvt. Ltd about the choice of location. “The combination of state-of-the-art Krishnapatnam port (in Andhra Pradesh) keeping view of handling larger capacity, good infrastructure and stable power, made us decide on SriCity,” he added.

“Yes, we did consider Sriperumbudur and Oragadam industrial belts in Tamil Nadu but then the distance to Krishnapatnam would be longer. Routing it through Chennai port, which handles large volumes, would have been tougher,” said the spokesperson.

The distance between Krishapatnam and SriCity is 112km; the travel time is close to three hours.

The head of a leading Chennai-based auto component company, who did not want to be named said, “It takes an hour to fly to Chennai from Colombo, Sri Lanka, but to get the goods through the congested roads to Chennai port takes a day or more.”

Chinta Sasidhar, managing director of Krishnapatnam Port Co. Ltd, said industries are opting for Andhra Pradesh because of congestion at Chennai and Ennore ports (in Tamil Nadu) on the one hand and greater availability of land and a proactive government in Andhra Pradesh on the other.

The cost of setting up a facility (in terms of real estate) is 35-40% cheaper in SriCity than in Chennai, with good infrastructure and single window clearance, said Vikram Sharma, managing director, Kobelco Construction Equipment. The company was an early entrant in 2011.

Tamil Nadu Industrial Development Corporation, which identifies and promotes the establishment of large- and medium- sized businesses in the state, did not respond to Mint’s calls or email.

“Bureaucratic procedures have delayed projects but investing companies that put up with the Tamil Nadu government’s lethargy no longer do so. They just hop across to SriCity,” said the head of a Chennai-based manufacturing company, who did not want to be named.

Good infrastructure and accessibility to a sea port are the most important factors for multinational companies looking to set up a manufacturing facility, said N.K Ranganath, managing director of Grundfos Pumps India Pvt. Ltd, whose parent company is based in Denmark.

Proximity to a huge market like Chennai, easy access to Chennai and Tirupati airports, connectivity to Krishnapatnam port in the north and Ennore and Chennai in the south, as well as National Highway-5 and railways, is what makes SriCity and its adjoining areas attractive to industrialists, said K.V Ramana Reddy, zonal manager of the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) for Chittoor district.

Reddy oversees Industrial Area Local Authorities (IALA), an extended arm of APIIC. IALA works with companies, helping them with their land and infrastructure requirements.

In August 2013, US multinational Mondelez International Inc., maker of Cadbury chocolates, said it will set up its largest international manufacturing facility in the Asia Pacific region and its largest chocolate manufacturing facility at SriCity. It is to house a multi-category food campus on 134 acres of leased land with a proposed investment of Rs.1,000 crore. Four months later, PepsiCo. India announced its largest beverage manufacturing unit at SriCity with an investment of Rs.1,200 crore.

So far, Sricity has attracted over 100 companies and signed memorandums of understanding (MoUs) for investments close to Rs.18,000 crore.

Presenting a counterpoint to Andhra Pradesh’s success with SriCity is the story of Tamil Nadu’s woes—one of a slowing economy compounded by political fights. In the last two years, Tamil Nadu’s economy has grown at the slowest rate among India’s 17 large states. The southern state’s growth rate fell by two-thirds to 4.14 % in 2012-13 from a galloping 13.12% in 2010-11, according to the Central Statistical Organization. Andhra Pradesh’s growth rate halved to 5.04 % in 2012-13 from 9.66% in 2010-11—partly a fallout of the agitation for a separate Telangana state.

In November 2012, J. Jayalalithaa, the then chief minister of Tamil Nadu—currently out on bail after being jailed and fined in a disproportionate asset case—blamed the previous Dravida Munnetra Kazhagam (DMK) government for delays in the execution of a joint venture between Ashok Leyland and Nissan. She said her government had to sign a fresh MoU with the joint venture company that makes light commercial vehicles because although the agreement was signed in 2008 during the DMK’s tenure, land was not allotted till February 2011.

In 2012, she signed MoUs with 12 companies for investments worth Rs.20,925 crore, including pledges for Rs.4,500 crore by Indo Rama Synthetics (India) Ltd to set up a petrochemical unit, Rs.2,325 crore for a BGR Energy Systems Ltd-Hitachi Ltd joint venture, and Rs.4,100 crore by US-based paint maker PPG Industries Inc.

Pledged investments by auto and auto components companies Sundaram Clayton Ltd, TVS Motor Co. Ltd and Sundaram Auto Components Ltd were far lower—at Rs.700 crore over the next three years.

After large investments went to SriCity, Tamil Nadu slowly realized that the act of carving Telangana state out of Andhra Pradesh would make these two states more attractive investment destinations than itself.

Five months ago, Jayalalithaa wrote to Prime Minister Narendra Modi, warning that any area-based concessions extended to Andhra Pradesh and Telangana will lead to a flight of capital and relocation of industries from neighbouring states. “Such concessions to new industries will render the existing industries, both in neighbouring States and even in the States where such concessions are granted, completely uncompetitive. These are grave risks which cannot be ignored,” Jayalalithaa said.

At the time of bifurcation in June, residual Andhra Pradesh was promised special category status for five years, which includes concessions on excise duty to attract industry, said Sasidhar of Krishnapatnam Port Co.

There are very few complaints to be heard about SriCity—other than insufficient residential accommodation and recreational and entertainment activities. There too, SriCity is working on providing more residential apartments—currently it has 101 rooms on a twin-sharing basis and 600 houses for workers and it is in the process of building two-bedroom apartments.

The only area of concern is an anticipated shortage of labour once the larger companies begin operations. Currently, labour is sourced from the neighbouring villages of Tada, Varadaiahpalem, Sullurpeta, Arambakkam and Koduru.

And although the industrial SEZ promises continuous supply of power, factories have to run generators for a couple of hours every day. “Earlier, Tamil Nadu had an advantage in terms of power but with the state reeling under a power crisis, it does not present itself as good alternative,” said a company head in SriCity, who did not want to be named.
That may hold some lessons for SriCity as well.

“Yes, SriCity has attracted big names but only time will tell how it will manage with the availability of power supply and labour,” said Jai Subramaniam, co-founder of the consultancy Shop 4 Solutions.

Read more at: Is Chennai losing out to SriCity? - Livemint

Gotta Give it to CBN, he might eat, but he delivers and is a shrewd politician.That is how you take the initiative and develop a Industrial corridor.
Meanwhile, understand there is a power vaccum in Tamil Nadu for 10 years.
Kanneruselvam ooops, Paneerselvam is the CM of TN ,while Amma is pulling strings like a puppet show.
I said Kanneru(TEARS) selvam because of this.No offense my Tamil bro's

Both CBN and KCR are chip of the old block, shrewd and Go-Getters. I only hope both Telugu states along with other states in India are prosperous.
Well we are waiting for KCR to deliver his promises though .

I hope that the electronic clusters will attract big investments we need to make more electronics at home

We had a Semi-Conductor and Chip Manufacturing Industry coming up around Hyderabad, that was stalled due to this state Bifurcation thing.
Still hope, it's on the list

Ever since lame duck Panneerselvam took over as Chief Minister, the TN govt has gone into stasis. Tamil Nadu is crumbling. I fervently wish Jaya takes over soon or else we're heading into the rabbit hole.

Nope sorry, she is banished for 10 years, since she was Convicted in a case by court.
Just like Lalu Prasad Yadav, she will try to pull strings, but won't be effective.
Like i said, TN got all the best deals when AP was fighting for Bifurcation and there was a power vacuum.Now TN has a power Vacuum, its our turn to get the best deals

 

[Echo_419]

Gotta Give it to CBN, he might eat, but he delivers and is a shrewd politician.That is how you take the initiative and develop a Industrial corridor.
Meanwhile, understand there is a power vaccum in Tamil Nadu for 10 years.
Kanneruselvam ooops, Paneerselvam is the CM of TN ,while Amma is pulling strings like a puppet show.
I said Kanneru(TEARS) selvam because of this.No offense my Tamil bro's

Both CBN and KCR are chip of the old block, shrewd and Go-Getters. I only hope both Telugu states along with other states in India are prosperous.
Well we are waiting for KCR to deliver his promises though .


We had a Semi-Conductor and Chip Manufacturing Industry coming up around Hyderabad, that was stalled due to this state Bifurcation thing.
Still hope, it's on the list


Nope sorry, she is banished for 10 years, since she was Convicted in a case by court.
Just like Lalu Prasad Yadav, she will try to pull strings, but won't be effective.
Like i said, TN got all the best deals when AP was fighting for Bifurcation and there was a power vacuum.Now TN has a power Vacuum, its our turn to get the best deals

Let's hope the Semi. Conductor thing is not dead we badly need those in India

 

[Tshering22]

@Darmashkian You didn't irritate at all. This article is an interesting fact that puts India as an emerging manufacturing sector. With Andhra becoming the first pilot project for 24 hours power supply, I am sure there will be a lot of manufacturing facilities coming up, especially in the coastal region.

For all we know, Vishakhapatnam may become a premier port of eastern coast due to rapid investment in manufacturing sector.

Chennai is already a well developed city. They should focus on cleaning up the city and making it tourism-friendly so that it can actually become like Singapore. A lot of planning is needed to achieve this.

They should stop politician worshipping in their state between DMK and AIDMK and focus on getting the city onto its true potential.

 

[protest]

@Darmashkian You didn't irritate at all. This article is an interesting fact that puts India as an emerging manufacturing sector. With Andhra becoming the first pilot project for 24 hours power supply, I am sure there will be a lot of manufacturing facilities coming up, especially in the coastal region.

For all we know, Vishakhapatnam may become a premier port of eastern coast due to rapid investment in manufacturing sector.

Chennai is already a well developed city. They should focus on cleaning up the city and making it tourism-friendly so that it can actually become like Singapore. A lot of planning is needed to achieve this.

They should stop politician worshipping in their state between DMK and AIDMK and focus on getting the city onto its true potential.

Chennai is really really dirty I cannot explain how much. I don't know if Municipality of theirs actually go around cleaning the city or no. It just seems City is cleaned once a year. Roads are filled with potholes and dirt. Shrubs along the road sides irritate you to hell. I was so disappointed when I first visited the city.

 

[Tshering22]

Chennai is really really dirty I cannot explain how much. I don't know if Municipality of theirs actually go around cleaning the city or no. It just seems City is cleaned once a year. Roads are filled with potholes and dirt. Shrubs along the road sides irritate you to hell. I was so disappointed when I first visited the city.

Then my friend, your state is a miracle on tourism list; retaining number two spot in terms of most tourists visited as of 2013.

Even we in Sikkim don't cater to that many number of tourists despite being a super tourism-friendly state.

What's your secret?

 

[protest]

Then my friend, your state is a miracle on tourism list; retaining number two spot in terms of most tourists visited as of 2013.

Even we in Sikkim don't cater to that many number of tourists despite being a super tourism-friendly state.

What's your secret?

We have Tirupathi, hence the tourists. But I was disappointed because as an Indian I would like to see our major cities reflect the culture and ethos of our country that includes cleanliness. But Chennai really disappointed me.

Cities form the basis for our image to foreigners. But in India, the cities lack even the basic amenities. I sometimes feel if only foreigners visited states like Sikkim, Himachal Pradesh instead of these big cities to form an opinion on us. When will GOI learn? When we develop our major cities, people change their opinion about us being poor and all. We should have learned that from China.

 

[Darmashkian]

@Darmashkian You didn't irritate at all. This article is an interesting fact that puts India as an emerging manufacturing sector. With Andhra becoming the first pilot project for 24 hours power supply, I am sure there will be a lot of manufacturing facilities coming up, especially in the coastal region.

For all we know, Vishakhapatnam may become a premier port of eastern coast due to rapid investment in manufacturing sector.

Chennai is already a well developed city. They should focus on cleaning up the city and making it tourism-friendly so that it can actually become like Singapore. A lot of planning is needed to achieve this.

They should stop politician worshipping in their state between DMK and AIDMK and focus on getting the city onto its true potential.

Vishakapatnam already has a port, Sir & a naval base . I think it has the biggest port of AP..

And coming to ports, Andhra Pradesh has one of the longest coastlines in India & the longest on the Eastern Coast, with one major and 14 non–major ports, with six ports under development in the PPP mode.

CBN is aiming to develop 14 major ports and three international airports to leverage the advantage of having such a long coast-line & to help boost the manufacturing sector in AP
Andhra Pradesh Plans 14 Ports, Three International Airports

Then my friend, your state is a miracle on tourism list; retaining number two spot in terms of most tourists visited as of 2013.

Even we in Sikkim don't cater to that many number of tourists despite being a super tourism-friendly state.

What's your secret?

We had so many guests in 2013 because of 2 main reasons:-
1)Hyderabad- IT & the Historical past of the City
2)Tirupati- Religious. Hindus from all over India come here to seek the blessing of Lord Balaji. Infact Tirupati is the main reason why AP is no. 2
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I've reached 500 'Likes'

 

[Tshering22]

We have Tirupathi, hence the tourists. But I was disappointed because as an Indian I would like to see our major cities reflect the culture and ethos of our country that includes cleanliness. But Chennai really disappointed me.

We also have lots of ancient monasteries and temples. But yeah, Tirupathi is a big attraction. Andhra gets a mighty share of it.

Cities form the basis for our image to foreigners. But in India, the cities lack even the basic amenities. I sometimes feel if only foreigners visited states like Sikkim, Himachal Pradesh instead of these big cities to form an opinion on us. When will GOI learn? When we develop our major cities, people change their opinion about us being poor and all. We should have learned that from China.

Foreigners do visit small cities. The problem is the terrain.

In Himalayas there is only so much you can do in terms of human interaction.

When we had earthquake in Sikkim, there was a major crisis. Why? Because we have only one roadway access to the rest of the country. Rest is all forest and hill tracts. As a result IAF and Army had a real headache to get to us.

This is not the case with metro cities.

BTW if you notice, a lot of non-English speakers visit small towns and they write good about our country.

Just some people have issues with it.

 

[itachiii]

We had so many guests in 2013 because of 2 main reasons:-
1)Hyderabad- IT & the Historical past of the City
2)Tirupati- Religious. Hindus from all over India come here to seek the blessing of Lord Balaji. Infact Tirupati is the main reason why AP is no. 2
--------------------------------------------------------------------------------------------------------
I've reached 500 'Likes'

Tirupati has to be made an international city, it can't be completely dependent on pilgrims for its survival... It is the only city that rayalasemma people have to take pride in...

Foreigners do visit small cities. The problem is the terrain.

In Himalayas there is only so much you can do in terms of human interaction.

When we had earthquake in Sikkim, there was a major crisis. Why? Because we have only one roadway access to the rest of the country. Rest is all forest and hill tracts. As a result IAF and Army had a real headache to get to us.

This is not the case with metro cities.

BTW if you notice, a lot of non-English speakers visit small towns and they write good about our country.

Just some people have issues with it.

any remarkable change with infrastructure in NE sir, from the earth quake days??

 

[Darmashkian]

Tirupati has to be made an international city, it can't be completely dependent on pilgrims for its survival... It is the only city that rayalasemma people have to take pride in...

Why only Tirupati?? Yes it should be made an international city. I agree..

But don't invest the pride of an entire region in just one city(or make it clear to CBN not to do so).
Rayalaseemaites should force the govt. to work towards developing Anantapur, Kadapa & Hindupur(or atleast 2 of them) which have proximity to Bangalore, Hyderabad, Chennai & VGTM Capital area & developing the entire region on the whole & not just one city which lies on the border of that region.

So that one day you can have pride in your entire region & it's largest cities which will be in it's heart & not just Tirupati which lies at the region's border.

 

[Abingdonboy]

It's good to have this kind of competiton in India, cities will push each other to do more to attract investment and this will only be good for India on thw whole.

 

[Tshering22]

any remarkable change with infrastructure in NE sir, from the earth quake days??

It is returned back to what it was but what we need is a major airport. And more national highways.

There is a lot of work suddenly being done from strategic standpoint which is pretty good.

The airport at Pakyong is the game changer. If they make it an open, market-oriented airport, it will save me loads of hours travelling to Bagdogra and then to Delhi for my international work missions. Not just mine but for a lot of people from our state including traders, SME owners etc.

 

[itachiii]

A pic of bangalore chennai industrial corridor.. If these people had hindsight and included the underdeveloped districts of Anantapur and kadapa and chitoor in it, these areas would have had great development potential...

 

[utraash]

Good to see all this n this how a healthy competition would eventually benefits to ppl .... This would also help other small size local industry .....

Northern states are still sleeping including my state though we have limited option to achieve what others can as we are one of the Himalayan states......
But central n state gov needs to contemplate n come up with comprehensive planning to make such state at par with other states......
There is no big IT industry despite being its proximity to national capital....