The Hindu Business Line : AP Govt hopeful, awaits communication from Volkswagen

THE Andhra Pradesh Government continues to await communication from the German automotive major Volkswagen AG on its greenfield plant near the port town of Visakhapatnam, even as reports of bribery suggested they would drop India plans.

The State Major Industries Minister, Mr Botcha Satyanarayna, who was very active in the project discussions, told Business Line that a team from the carmaker would visit the State to inquire into the issue concerning some recent reports.

Mr Satyanarayana said, "I have also read the reports published in Germany after getting them translated. These relate to some inquiry which they are conducting internally and we have been requested to cooperate in the inquiry as well."

"However, we have received positive information from them and are confident that the project will come to Andhra Pradesh," the Minister said dismissing suggestions that the project had been dropped.

Reports quoting German dailies mentioned that the automotive major has instituted an inquiry into allegation of bribery and enlisted the support of KPMG to take up the matter following a complaint by its shareholder.

Following the bribery charges, Mr Helmut Schuster, the man who was referred to as their Indian project leader, has been suspended by the company, recent reports have mentioned.

The VW saga dates back to nearly two and a half years, when the company initiated negotiations with the Telugu Desam Government led by Mr N. Chandrababu Naidu .

The then Industries Minister, Mr M. Vidyadhar Rao, said he had led high-level State teams twice to Germany for discussions. But, it was at Davos (World Economic Forum) that they could convince Volkswagen to zero in on Andhra Pradesh.

Mr Vidyadhar Rao told Business Line that four teams (logistics, technical (twice) and HR), visited to State for `study and discussions'. Mr Schuster led all the teams.

What was surprising was that even after signing a MoU with the present State Government, the carmaker was reportedly `dithering' in its decision and negotiating with other competing State Governments, he said.

Mr Rao felt that lack of follow up at the highest level (State CM) and the imbalanced composition of the negotiating team, which met the company officials recently in Germany, were some of the reasons for the dithering.

Interestingly, after the high pitched drive by the TDP Government, its defeat at the hustings in 2004, led to a lull. In January 2005 the VW team visited the State.

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