Due to inordinate delay in project execution, Moser Baer India?s $500-million manufacturing SEZ in Andhra Pradesh has been called off by the state government. The Andhra Pradesh government has canceled the memorandum of understanding (MoU) with Moser Baer Infrastructure Developers, a subsidiary of the company, according to sources.
The state government had signed an MoU on April 16, 2008, providing 100 acres to Moser Baer to set up a manufacturing SEZ with an investment of $200 million, in phase-I spread over two years, and another investment of $300 million in phase-II spread over three years.
Land was provided to the company at a lease amounting to R15 lakh per acre for a period of 66 years and the company had plans of employing about 2,000 people. But the company did not make any progress and also failed to pay lease premium to the state government as per the MoU.
?After 1-1/2 years, Moser Baer has replied that due to economic recession the photovoltaic industry was hard hit and wanted extension by another two years to complete the project,?? highly-placed government sources told FE. When contacted, the company officials said that they have not received any communication from the government.
In April 2010, a showcause notice was issued to Moser Baer as to why the MoU should not be cancelled. But the company sought another two years’ time quoting the same reasons of economic recession and adverse conditions prevailing in the solar photovoltaic business.
?The company had not paid even the initial lease premium till date and also not made any investment in the land they had taken possession of. After a recent review meeting chief minister Kiran Kumar Reddy has issued a directive to cancel the MoU,?? sources added.