The Tamil Nadu government has cancelled the permission given to Coca-Cola to build a bottling and manufacturing plant in Erode district following protests by farmers, who argued the unit would deplete groundwater reserves.
The permission granted to Hindustan Coca-Cola Beverages Pvt Ltd to set up the plant at Perundurai, 500 km from Chennai, and the allocation of land had been cancelled, sources in the department of industries said on Tuesday.
All political parties barring the ruling AIADMK had backed residents of Erode in their struggle against the beverage major.
Coca-Cola said in a statement that it was committed to investing in Tamil Nadu but it would not be "able to invest in SIPCOT, Pedundurai" because of "unforeseen pressures and delays". It said that it was allotted a parcel of land last year and that "the project was delayed due to unanticipated, outside pressures".
The firm claimed "some approvals were not coming through" despite repeated follow-ups and requested the state government to refund the money paid so far.
"Inordinate delays, coupled with local activism against the project, could not have been foreseen or prevented by us. Despite our best efforts to address concerns, we could not commence construction and the project cannot be executed," the company said in a statement.
A senior official confirmed the development on condition of anonymity. The approval given for the plant, with an estimated investment of Rs 500 crore, was withdrawn, the official said.
Coca-Cola failed to start constructing the plant within the timeframe of six months that was stipulated when the approval was given. The State Industries Promotion Corporation of Tamil Nadu (SIPCOT) had allotted 71.3 acres for the plant.
An official said the company too wanted to withdraw from the project after it found that the plant was not feasible.
Coca-Cola was to set up a state of the art greenfield manufacturing facility at SIPCOT Industrial Growth Centre in Perundurai village of Erode district, where the company would roll out its range of beverages, including fruit juices and bottled water.
The main reason for cancelling the permission is believed to be the strong opposition to the plant from local residents, who alleged the plant would consume huge quantities of groundwater. Last week, shops and establishments in Erode were shut as part of a protest against the plant.
Notwithstanding claims by Coca-Cola that it would not extract groundwater, people of the area continued their protests and sought the intervention of the union environment ministry. People further alleged that the plant would disgorge waste that would affect the environment.
This is not the first time that a Coca-Cola plant has been at the centre of controversy. Last year, the Uttar Pradesh Pollution Control Board ordered the closure of a Coca-Cola plant at Mehdiganj in Varanasi after prolonged protests by local residents that the unit was extracting too much groundwater.