Fab City: will it be in Hyderabad or Chennai?

New Delhi, Nov 28: Intense jockeying by IT-centric states, Andhra Pradesh and Tamil Nadu in particular, to corner the prestigious Fab City project has put Prime Minister Manmohan Singh in a quandary of sorts.

At stake is the proposal to set up a mega Fab City that will become India’s largest hardware manufacturing hub, especially for semiconductors, with direct investments worth billions of dollars and providing direct employment to thousands.

The Prime Minister was on Monday evening accosted by a 60-strong all-party delegation of MPs from Andhra Pradesh led by chief minister YS Rajashekhara Reddy, who strongly lobbied in favour of Hyderabad becoming the venue.

Andhra is facing direct competition from Chennai, with the strong backing of IT and telecom minister Dayanidhi Maran. Kolkata and Noida are the other venues being considered.

In the representation to the Prime Minister made on Monday, YSR Reddy has pointed out that Hyderabad is the only city which satisfies three critical criteria for setting up the Fab city— plentiful availibility of water (50 million gallons per day), uninterrupted power (600 mw at Rs 2.25 per unit) and humidity-free weather. Reddy contends that based on recommendatiions made by McKinsey, Andhra has already done the groundwork to establish itself as a major IT hub.

Besides dedicating 1,500 acres for the Fab City, he said Andhra has taken care of connectivity —international airport, railroad, national highways and bandwidth. He also promised to commit $500 million as initial venture fund for investment in varous units.

Mr Reddy also made a representation to the UPA chairperson Sonia Gandhi for the project, that is being called — what else — the Rajiv Gandhi Nano Technology Park.

Andhra Pradesh has already approved the first private sector Fab unit in Hyderabad, which is being promoted by South Korean company Intellect Inc headed by former Daewoo executive June Min. Min has already established eight Fabs in Vietnam and China. The proposed Fab in Hyderabad, with investments totalling $1.6 billion in two phases and employing over 10,000 workers, is to be called India Semiconductor Manufacturing Co.

Mr Maran, on the other hand, is keen that semiconductor fabrication units that will drive growth of the country’s hardware industry be set up in Chennai.