L&T Metro Rail (Hyderabad) Chief Executive V B Gadgil
used to face one persistent question during his frequent press
conferences till recently. What would happen to the metro rail project
if the state gets bifurcated? Will the project still remain viable?
If at all there is a big project that faces an absolute risk of losing
money, had it not been supposedly backed by a sound economic foresight,
it is the Metro Rail project. Also, the company had the audacity to
begin the project right in the middle of great political uncertainty
involving the future status of Hyderabad, back in 2012.
Neither the project concessionaire, L&T, nor the bankers who
committed funds of over Rs 10,000 crore for the project were ever found
on the back foot while facing this persistent question. "We had done our
homework well and nothing adverse is going to happen to the project
even if the state gets divided," was the predictable response from
Gadgil, according to whom the city had gathered enough critical mass to
withstand such setbacks.
As the state is now getting divided, the same question is extended to existing infrastructure
facilities, both in the public and private sector, to find out if all
of it could still be relevant and make economic sense for a two-state
situation.
Most of the infrastructure - whether it's engineering education, health
care, energy or physical connectivity like roads and airports - had come
up in line with the current and future requirements of the combined
state. Will some of it go waste?
"Four years had already gone waste in this statehood issue. It would be
naive to think that things would be the same even after the bifurcation," says Y Harishchandra Prasad,
an entrepreneur activist, in response to this question. Prasad, who
hails from the affluent Krishna district, recently floated a development
forum to deal with the future progress, including the industrialiation,
of the residuary state of Andhra Pradesh.
What would happen to the Hyderabad International Airport, the country's
first modern airport facility designed to handle 40 million passengers
after the completion of the second phase, if the successor Andhra
Pradesh state will have its own international airport in Visakhapatnam
or Vijayawada?
The Hyderabad airport handled 8.3 million passengers in 2012-13, and
achieved a break-even two to three years back but is still way behind in
profitability compared to the airports in Bangalore or Mumbai.
For Prasad, everything that is connected with Hyderabad will overcome
the bifurcation impact, if not tomorrow then the day after. "Even now,
only half of the Seemandhra air travellers are using the Hyderabad
airport. Rest of them get down at the Chennai airport because it is just
four to five hours of travel time to reach their destination by road
from Chennai," he said.
The same can not be said about other areas such as engineering education
that had expanded out of proportion on the back of a government
fee-reimbursement scheme, either in Telangana or in coastal
Andhra-Rayalaseema regions. During 2013-14, engineering institutions and
the corresponding seats in the private sector alone were: 336 college
and 170,000 seats in Telangana; 226 colleges and 108,000 seats in
coastal Andhra and 122 colleges and 54,900 seats in the Rayalaseema
region, according to government statistics.
While more than half of these seats remained vacant during the past few
admissions, things are expected to become difficult after the
bifurcation either in terms of governmental support or in terms of
locational advantage for students who aspire for software jobs,
currently available only in Hyderabad within the combined state.
An officer who was informally working on the issue of alternative
capital for the successor state of Andhra Pradesh told Business Standard
that the existing Nagarjuna University in Guntur district could be used
for this purpose by relocating the students of the university to vacant
buildings of a couple of engineering colleges that were already closed
down.
The Centre has sanctioned two new ports for the coastal Andhra region
since the economic development of the residuary state of Andhra Pradesh
largely depends on how it can make the best use of its 1,000-km
coastline. The financial package is expected to provide fresh impetus to
construction and other economic activities in the coastal Andhra and
Rayalaseema regions.
On the other hand, the power generation capacity in coastal Andhra, is
going to make the residual Andhra Pradesh a power-surplus state, while
Telangana will remain a power-deficit state at least for the next four
to five years. Most of the gas-based capacity under power purchase
agreements with state power utilities as well as the pure merchant power
plants are just kept idle since there was no natural gas to run the
plants. If Telangana starts building additional capacity, then the
surplus power in coastal Andhra will have to find new markets.
Other than the airport, outer ring road and the metro rail project in
Hyderabad, the rest of Telangana has no major physical infrastructure.
Former Industries Minister J Geeta Reddy says that the region would be
developed with a good road network in the Telangana state. The lack of a
well-developed road network has been one of the prominent features of
Telangana's backwardness. The Seemandhra region is far ahead in physical
infrastructure, especially in terms of a road network, both rural and
highways.
