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YSRCP, TDP in war of words over report of Kia moving from Andhra to Tamil Nadu
News agency Reuters reported on Wednesday that Kia was in preliminary negotiations with the Tamil Nadu government for moving its $1.1 billion manufacturing plant from Anantapur.
A report that South Korea’s Kia Motors is contemplating shifting its India plant from Andhra Pradesh’s Anantapur district to Tamil Nadu on Thursday triggered a war of words between the ruling YSR Congress Party and the opposition Telugu Desam Party.
News agency Reuters reported on Wednesday that Kia was in preliminary negotiations with the Tamil Nadu government for moving its $1.1 billion manufacturing plant from Anantapur.
The report said the company was facing problems in Andhra Pradesh following policy changes in the state.
However, both Andhra Pradesh government, as well as Kia Motors’ India management, denied the report.
“There is absolutely no truth in the news report. The government of Andhra Pradesh is closely working with Kia Motors and extending all cooperation. We strongly condemn the news, which is malicious and it appears to be deliberately planted,” special chief secretary of industries, investments and commerce department, Rajath Bhargava, said while speaking to HT.
Bhargava said senior officials from the industries department in Tamil Nadu also got in touch with their counterparts in Andhra Pradesh and confirmed that there were no talks whatsoever with Kia Motors.
“The TN government never had any discussions with Kia,” the senior Indian Administrative Service (IAS) officer said.
When contacted, a spokesperson of Kia Motors India said the news about the “potential movement of the plant from Andhra Pradesh to another state is unfounded and untrue.”
The spokesperson said Kia had a long-term commitment to the Indian market and had made an investment of US $1.1 billion for the state-of-art manufacturing facility at Anantapur.
“We do not have any plans to shift our production facility from the current location and we are on the right track to utilise the full capacity of the facility,” she said.
She also said the company would continue to offer world-class, made-in-Anantapur vehicles and innovative mobility experience to its valuable customers in India.
Kia, the world’s eighth-largest automobile manufacturer, began commercial production at Erramanchi village of Penukonda block in Anantapur plant last year. It had its trial run in January 2019 and rolled out its first car Seltos in August that year.
By the time the company was getting ready for the launch of its first car, there was a change in the state government and chief minister YS Jagan Mohan Reddy enacted a legislation in the assembly seeking to reserve 75% of the jobs to locals in any industry.
Jagan also skipped Kia’s event to roll out its first car from the plant on August 8, causing a lot of embarrassment to the company. Adding to this, local YSR Congress MP Gorantla Madhav penned a protest note on the first car, “Car roll out - our youth ruled out here. Sorry.”
However, the chief minister attended the formal inauguration of the Kia Motors plant on December 5 last year, indicating the restoration of normalcy. The plant projected annual production of 300,000 cars.
But the report on the proposed moving of Kia Motors plant to Tamil Nadu comes amidst of allegations by TDP lawmaker Jayadev Galla in the Lok Sabha on Wednesday that the Jagan government is scaring away investors with its alleged illogical and irrational decisions.
“Investments worth more than Rs 1.8 lakh crore had been withdrawn due to such decisions, damaging the reputation of the state and the country,” Galla said.
TDP president and former chief minister N Chandrababu Naidu told the media on Thursday he had to lobby extensively to bring Kia Motors to Andhra Pradesh amidst tough competition from Tamil Nadu, Maharashtra and Gujarat, which resulted in an additional investment of Rs 13,500 crore in the form of ancillary industries.
“But the YSRC leaders have been intimidating the Kia management, while the government threatened to withdraw incentives to the company,” Naidu alleged.
Finance minister Buggana Rajendranath Reddy, however, said there were absolutely no issues with Kia Motors.
“We are extending all cooperation to the company. There is a conspiracy behind the media report and the government will take strict action against those who are behind such false reports,” he said.
