TN no longer investment hub as infra projects stall

Once touted as the 'Detroit of South Asia', Chennai seems to have taken a U-turn in the wrong direction somewhere along the way. With manufacturing growth sputtering due to lack of power and infrastructure bottlenecks, projects worth Rs 25,000 crore are in limbo in the state, reports CNBC-TV18's Poornima Murali.

The much-hyped Chennai Port -Maduravoyal project announced three years ago with the PM himself laying the foundation stone, is yet to take off. This is a site through which the 19-km elevated road connecting the two major industrial hubs of Oragadam and Sriperambadur to the Chennai Port was to have run. If completed, this would have been the longest elevated corridor project in the country.
But problems with land acquisition and a blame-game between the project developer — the National Highway Authority Of India (NHAI) and the Tamil Nadu government have forced the NHAI to call for the closure of this Rs 1,815-crore expressway.
And that's just one of the projects. The Ennore Manali Road Improvement Project commissioned in 1998 has been under implementation for the last 15 years and is yet to be completed.
Abdul Majeed, leader, PwC, says, "A few projects have been stalled because of various reasons — either regulatory approvals have been given while no land was acquired or regulatory approval is awaited even after the land has been acquired."
At a time when Tamil Nadu is reeling under a 4,000MW power crunch , some of the major power projects including Videocon's 1,050MW project, the1,600MW project at Udangudi, IL&FS’ 4,000MW project and BGR's 1,320MW project, are in limbo.
A recent study by Assocham have revealed that while Tamil Nadu has attracted investment proposals worth R s 10 lakh crore as of June 2013, over 40 percent of these projects are still in the announcement stage, 2.5 percent have been stalled and there is no information of regarding 4 percent of the projects.
Says, DS Rawat, national secretary-general, Assocham, “Most of the stalled projects are because either the land has to be acquired or the environment clearances are yet to be received. It will be very difficult if projects worth Rs 25,000 crore do not see the light of day.”
While the state government is trying to do its bit by inviting more private sector participants to invest in infrastructure projects, it's clearly not enough. As Tamil Nadu- earlier ranked fourth in attracting investment proposals with MNCs like BMW, Hyundai, Ford, Samsung and Nokia having invested in the state — has now slipped to the sixth position in the country.