Peugeot eyes sites in Andhra Pradesh

French carmaker PSA Peugeot Citroen has surveyed two sites in Andhra Pradesh to set up a manufacturing facility.

The Paris-based carmaker is expected to revert to the state government with a detailed plan of action in the next calendar year.

A state government official said Peugeot officials surveyed two sites -one near Sri City in Chittoor district and another near Sitarampet in Ranga Reddy district - at different times.

According to sources in the state government, Peugeot officials - including Gregoire Olivier, overseeing Asia operations, and India representative Rajesh Nelluri – on Wednesday met state government officials, including Principal Secretary (industries) B Sam Bob, Andhra Pradesh Industrial Infrastructure Corporation's Managing Director, B R Meena, Principal Secretary (investments) Ajay Mishra and Principal Secretary (energy) Sutheertha Bhattacharya, at the secretariat to discuss the project.

The company is expected to invest about Rs 10,000 crore (Rs 100 billion), including Rs 1,500 crore (Rs 15 billion) in the first phase, in the facility.

The manufacturing unit could provide employment to more than 10,000 people. However, another state government official said, "It is too fluid to say if the company has zeroed in on Andhra Pradesh."

Sources said the French carmaker had sought a slew of incentives, including 900 acres land, a Rs 600-crore (Rs 6 billion) interest-free loan, 100 per cent value added tax (VAT) reimbursement for 21 years and physical infrastructure like roads, power and water and others.

The company has asked the Andhra Pradesh government to offer more incentives than Gujarat and Tamil Nadu  have and insisted the state government buy 'some' cars from it.

So far, Tamil Nadu has allowed 100 per cent VAT reimbursement. The official said Andhra Pradesh had never offered 100 per cent VAT reimbursement for 21 years to any company.

The state government will take some time to take a call on the matter, with the Assembly session commencing on December 10, followed by festivals.

The company has been evincing interest to set up a manufacturing plant in the state for almost two years now. However, the plans did not move with the demise of the former chief minister Y S Rajasekhara Reddy last year.