Andhra says Adani asking for too much land

You're asking for too much land, the Andhra Pradesh government has told the Gujarat-based Adani Group, which has proposed to invest Rs. 25,000 crore (Rs. 250 crore) in the state. Looking for a foothold on the eastern coast of the country, the $6-billion conglomerate had approached the state government last year for allocation of land at Pentikota in the Petroleum, Chemicals and Petrochemical Investment Region in Visakhapatnam district, with a plan to develop a port and a port-based industrial cluster, power and refinery plants, plus some more.

It had sought 10,000 acres in the first phase and 40,000 acres in the second phase.

The AP Industrial Infrastructure Corporation recently reported to the government that the extent of land requested by the company was on the higher side.

"Though they are welcome to develop a port and other projects in the state, the extent of land they have asked is a bit unrealistic. Therefore, the government has instructed APIIC to ask the Adani Group for a revised proposal, with a realistic estimate of land required," a government official told Business Standard.

Officials denied the government had rejected the group's proposal, as was recently reported in a section of the media.

"We welcome Adani Group's plans for developing a port on the Andhra coast, as it is the operator of the country's biggest private seaport at Mundra and its presence would definitely help expand a port-based industrial economy in the state. As we have few operating ports, unlike Gujarat, some port players in the state are reportedly charging a premium for handling bulk cargo," a senior government official said.

Adani representatives had met industry department officials recently and reiterated their keenness on the projects.

Adani was in the news early last year on its reported interest in buying the privately operated Gangavaram port near Visakhapatnam. This was denied by both parties.

More, Gangavaram does not have hinterland at its disposal, unlike the Krishnapatnam port, which owns 13,000 acres earmarked for industrial projects, including power plants based on imported coal.

Port projects are considered viable only if they have sufficient hinterland or captive cargo that comes from an industrial cluster being developed near the port.

The group wants to expand its operations to the eastern coast as its mining interests in Orissa and Australia are getting bigger. Adani Enterprises, a coal trading subsidiary of the group, commands a 60 per cent share in coal imports.The group is also planning to develop a port in Orissa.

"We may not be able to provide 10,000 acres for the first phase project as requested but we can certainly manage to give them an adequate extent, as we have some government land at the proposed location," the official said.

When contacted, an Adani Group spokesman refused to offer any comments. He also refused to acknowledge any such investment plan drawn up for Andhra Pradesh.