Hyderabad: Andhra Pradesh is planning to experiment with a new model by granting privately held industrial park Sri City powers of local governance in a bid to localize decision-making. The state government will depute bureaucrats to the multi-product zone, and authorize them to give permissions to companies interested in setting up a base in Sri City, which houses a special economic zone, a free trade and warehousing zone, and a domestic tariff zone spread across 7,600 acres.
The Andhra Pradesh government will grant Sri City “industrial area local authority status,” chief minister N. Chandrababu Naidu said on Friday. “We plan to do this so they (companies) don’t need to come to Hyderabad for small permissions,” Naidu said after meeting business executives of companies operating in Sri City, located 600km from the state capital in the southernmost corner of Andhra Pradesh.
Although it is located closer to Chennai (at a distance of 55km), companies planning to open a unit there have to travel to state capital Hyderabad for approvals. Executives of companies operating out of Sri City brought this issue to Naidu’s notice on Friday.
“We will process this immediately,” said Naidu, who is largely credited with transforming Hyderabad into an information technology hub. “We will create a single centre for all clearances.”
“Industrial area local authority (IALA) is like a cantonment board,” said V. Srinivas Chary, director at Hyderabad-based Administrative Staff College of India. Such an authority gives entities municipal-like powers to collect property taxes, develop facilities and charge people for using those facilities, said Chary, who specializes in urban governance and institutional reforms.
These entities, however, will have to share a portion of their revenues with the government, Chary noted.
IALA is a special provision created by the Andhra Pradesh government, and gives Andhra Pradesh Industrial Infrastructure Corporation such powers. The IALA model can lead to more efficiency, and possibly lesser corruption, said Chary. “There is a positive vested interest to develop good roads and provide good facilities to have good companies (to invest),” he observed.
The model, if successful, will be replicated in other parts of the state, said Naidu, who is trying to attract investments from industries into Andhra Pradesh. A total of 106 companies with an investment commitment of Rs.22,500 crore operate out of Sri City, established by entrepreneurs Srini Raju and Ravindra Sannareddy. These include 16 Japanese and nine US-based companies.
Beverage maker PepsiCo Inc. became the latest multinational corporation to open a facility in the industrial park, joining Kellogg Co., Alstom SA, Kobelco and Hunter Douglas NV.
PepsiCo chairman and chief executive officer Indra Nooyi and Naidu opened the first of nine production lines the US-based maker of Pepsi, Mirinda, AquaFina, Tropicana, and Gatorade plans to operate in Sri City with a total investment of Rs.1,200 crore. This will be the company’s largest beverage manufacturing plant in the country. PepsiCo operates 38 beverage bottling plants and three food plants in India.
Mondelez International Inc., the maker of Cadbury’s chocolates, and Isuzu Motors Ltd, the Japanese automobile maker, are in the process of setting up their manufacturing units. Apart from PepsiCo, Naidu also inaugurated 11 industrial units that have been set up in Sri City involving a combined investment of Rs.1,500 crore.
