Flying high

Indias first greenfield airport, near Hyderabad, will go a long way in aiding the overall growth of the State.

in Hyderavad

WITH the formal inauguration of the Rajiv Gandhi International Airport on the outskirts of Hyderabad on March 14 by United Progressive Alliance chairperson Sonia Gandhi, India will have its first greenfield airport. Developed on 5,500 acres (1 acre = 0.4 hectare) in Shamshabad at an initial cost of Rs.2,478 crore, the airport will significantly upgrade infrastructure in Andhra Pradesh and also improve Hyderabads position on the global aviation map. Commercial operations of the airport, which can cater even to giant aircraft such as the A380, will commence two days after the formal inauguration.

The airport is designed to cater to 40 million passengers a year. The State government is planning to put in place approach roads and other ancillary infrastructure, such as the P.V. Narasimha Rao Expressway, to facilitate movement to and from the airport. It is confident that the city will become a major destination-cum-transit hub between the East and the West given its strategic geographical position it lies in a four-hour radius from all major cities in West Asia and South-East Asia.

This state-ofthe-art airport has been developed by the GMR Group in a public partnership mode in which it holds 63 per cent equity, while Malaysia Airports Holdings Berhard holds 11 per cent and the Andhra Pradesh government and the Airports Authority of India (AAI) 11 per cent each.

It is becoming operational at a time when the State is set to witness a flurry of activity on the industrial and the infrastructure fronts, what with 46 of the 70 Special Economic Zones proposed in the State being notified and 19 of them securing formal approvals. Andhra Pradesh has more notified SEZs than other States in the country since the Central government was impressed by the proactive approach of the State government in putting in place the infrastructure required for the industrial hubs.

The government has announced its intention to promote industrial hubs in the State by allotting lands for SEZs and developing the infrastructure required for setting up units. Besides, it will give concessions to private sector firms that come forward to set up ventures. To supplement the connectivity requirements, the government has decided to set up eight minor airports in public-private partnership mode in the hinterlands. The National Bank for Agriculture and Rural Development (NABARD) has come forward to assist the government in 116 road projects in remote and interior areas with funding to the tune of Rs.125.25 crore.

The measures adopted so far have resulted in achieving over 9 per cent growth in the industrial sector; the growth is expected to exceed an average of 10 per cent once the infrastructure is in place. Several Information Technology majors, including Google, have expressed interest in setting up dedicated campuses along the Outer Ring Road project. Infosys and some others will significantly increase the head count to augment the operations from their existing campuses.

The State is already witnessing excellent growth in IT and IT-enabled services, a segment that is registering an annual growth rate of more than 50 per cent, coupled with a 11.5 per cent growth in the services sector, which is generating huge employment opportunities. IT exports by the end of the financial year 2007-08 are set to cross Rs.25,000 crore. Dedicated SEZs for the IT and ITES sectors will help increase the quantum of exports significantly in the coming years.

One of the prestigious projects announced by the government, FAB City, has received assurances for investments to the tune of a few hundred crores from entrepreneurs. The majority of them have committed to putting their investments in promoting the semi-conductor establishment being set up by the government in association with Sem India. Besides announcing an industry-friendly semiconductor policy, the government has come up with a series of incentives for the semiconductor segment. In what could be a major boost to the governments efforts to promote the Fab City project, which will have an initial investment estimated at Rs.20,000 crore, and is expected to employ over 50,000 skilled and semi-skilled workers, delegations from South Korea and China have been visiting the State to study the possibility of diverting a portion of their operations here.

This apart, Andhra Pradesh, which has the distinction of being the capital of the bulk drug industry in the country in the past, has now intensified efforts to attract biotechnology units as the sector is supposed to be the driver of the economy in the future. The Genome Valley promoted by the government already has over a hundred biotech companies, including 53 companies of international repute, in operation. The petroleum, chemical and petrochemical industry is another area that the government hopes to reap benefits from in terms of employment and industrial development. The investment in this sector will be made between Visakhapatnam and Rajahmundry. This is aimed at providing the infrastructure for manufacturing and the facilities for export-led production in chemicals and petrochemicals, along with associated services and infrastructure. The Oil and Natural Gas Corporation plans to set up one of its major petroleum refineries at Kakinada. The proposed gas grid by Reliance Industries, which will cover a major portion of the State, will give a boost to the ancillary industry which provides employment to a few thousands. Coupled with this is the effort to tap the vast mineral resources, including bauxite and iron ore, in the State.

While Brahmani Steels has commenced tapping the iron ore resources in Anantapur district with an investment of Rs. 20,000 crore, Jindal South West has secured permissions for tapping bauxite, which is abundant in Visakhapatnam.

Even as the international airport at Hyderabad is getting ready, the government has simultaneously launched the expansion plans for the Vijayawada and Visakhapatnam airports, where provisions for night landing, modern runways and support structure to handle international aircraft are being developed. In Hyderabad, steps have been initiated to improve road and rail connectivity by strengthening the multi-nodal transit system. Preliminary work has started on the Metro Rail project, costing over Rs.8,000 crore.

The construction of the Outer Ring Road project, at an estimated Rs.4,000 crore, covering 160 km and connecting all major locations in the twin cities of Hyderabad and Secunderabad to decongest traffic and allow free access to the new international airport, is another feather in the governments cap. It has led to the development of housing townships by construction majors, including the U.S.-based Tishman Speyer and domestic companies such as Unitech.

The efforts of the government received a boost with Railway Minister Lalu Prasad granting a dedicated line for the Krishnapatnam port where multi-product SEZs, including food processing facilities are set to come up shortly. This is in addition to the SEZs set up in Nellore and other places. Cement and related industries also received a boost when assurances were given for the expeditious completion of the railway line between Nandyal and Yerraguntla to transport cement.

Efforts have been initiated to enhance the installed power generation capacity from 12,000 megawatts to 15,000 MW during the Eleventh Plan period, a majority of them through hydroelectric power stations planned along with irrigation projects in different parts of the State. The total investments in these is over Rs.100,000 crore.

The Central government, on its part, is promoting a mega power project at Krishnapatnam with an installed capacity of 4,000 MW. The National Thermal Power Corporation has commenced work on the expansion of the Simhadri power project so as to increase its generation capacity by another 1,000 MW.

Consistent efforts of the government to promote an investor-friendly atmosphere have ensured a significant growth in investments, which stood at Rs.10,570 crore during 2004-07, with a growth rate of over 130 per cent. Employment generation has reached a new high; more than 1.2 lakh new jobs were created during the same period. Andhra Pradesh, according to the latest survey conducted by the Central government, is ranked second in terms of attracting investments, after Gujarat.