The Tamil Nadu government said on Tuesday it had cancelled the allotment of 71.2 acres of land to Coca-Cola India on the grounds the company had failed to commence construction at the site within the stipulated time-frame. The land, in Perundurai of Erode district, was to be used for a R500-crore bottling plant.
Saying it could not have foreseen local activism against the project, Coca-Cola countered the TN government’s claims saying it was yet to receive any communication cancelling the land allotment. In a statement, the company said it has written to the TN government about its inability to carry on with the project due to the failure of the state government agencies to provide water and power connections along with a host of other approvals without which construction work cannot start. Accordingly, Coca-Cola has asked for a refund.
“These inordinate delays, coupled with local activism against the project, could not have been foreseen nor prevented by us. Despite best efforts to address concerns, we could not commence construction and the project cannot be executed. We have requested state government to refund entire money paid so far,” Coca-Cola said in its statement.
State government sources told FE that while the allotment had been officially revoked because of a delay in starting construction, the project, they said, had become controversial with farmers and environmentalists protesting against it. Under the circumstances, the state government did not want to go ahead with it, they said.
When contacted CPI Erode district secretary, K R Thirunavukkarusu, ex-chairman Perundurai panchayat union and a campaigner against the project, told FE that local villagers have been protesting against the plant being set up because they felt the project would not only affect the source of drinking water but also create environmental issues. A number of villages surrounding Perundurai source water from New Tiruppur Scheme which draws water from the Cauvery river at Bhawani.
“We are not fully satisfied with the state government as its statement didn’t talk about the water problem and instead blamed the company for not starting work as per the stipulated time. We are still suspicious,” he added.
The AIADMK government has shown support for farmers and has said it would protect their interests. The major opposition parties in the state and locals, including farmers, recently protested against the plant at Perundurai and in March around 3,500 shops in Erode district had downed their shutters in protest.
Company sources said that Coke has so far paid around Rs 70 crore towards the land, allotted to the company by the State Industries Promotion Corporation of Tamil Nadu (SIPCOT), in January 2014. “Hindustan Coca-Cola Beverages Pvt Ltd (HCCBPL) is committed to invest in the state of Tamil Nadu and looks forward to invest in the state. However, the company has written to the state government that due to unforeseen pressures and delays it will not be able to invest in SIPCOT, Perundurai,” the company said.
Sources in the company said they see better prospects in Andhra Pradesh or Telengana. While a Rs 1,000-crore plant is coming up in Andhra Pradesh, in Telengana the investment is of around Rs 500 crore. The locals, in Tamil Nadu, they said, had been against the plant since they believed it would create environmental problems and pollute the water in the area. Such fears, they said, were totally unfounded.
The US-based beverage maker through its bottler, Hindustan Coca-Cola Beverages Coca-Cola has said it will invest $5-billion in India. “In spite of repeated follow-ups, the following pre-requisite approvals/permissions were awaited without which, we are unable to apply for ‘Consent to Establish’ and start construction work on the site. Despite sending repeated reminders to SIPCOT there has been no progress.