Chandrababu Naidu has always prided himself for having brought Kia Motors to Anantapur in Andhra Pradesh. He patted himself on the back again in the Assembly on Monday, when the ruling YSR Congress claimed that Rs 39 crore was spent on Naidu’s foreign trips without translating into tangible investments.
“They are questioning about my foreign tours. Yes, I went to South Korea and got Kia Motors to Andhra Pradesh. Under our government, we brought South Korean township to Anantapur. That is our credit,” Naidu said.
Finance minister B Rajendranath had come prepared with what he thought was ammunition to prick Naidu’s balloon. Quoting from a letter written by the President and CEO of Kia Motors, Han-Woo Park to Jaganmohan Reddy on 13 June 2019, Rajendranath said it was YS Rajasekhara Reddy as CM of united Andhra Pradesh in 2007 requested Hyundai Motors to invest in the state.
“Around 2007, when I was leading the establishment of the Hyundai Motor R&D Centre in Hyderabad, I had the pleasure of meeting Dr YS Rajasekhara Reddy who requested me to invest in an automobile factory in the state. I promised him we would do so if the Hyundai Motor group were to have any additional investment plans in India. I firmly believe that our long-standing relationship played an important role in the decision by Kia Motors, a member of the Hyundai Motor Group, to locate its first India plant in Andhra Pradesh,” wrote Park.
The intention of the YSRCP is to pooh-pooh Naidu’s claim of having brought Kia Motors to Andhra Pradesh. What Rajendranath does not realise was that there are a few issues with claiming credit for it now.
One, when the plant was being set up, the YSR Congress had criticised the Kia Motors investment, claiming it did not employ more than 100 local youth.
In a tweet on 11 March 2019, the general secretary of the YSRCP VijayaSai Reddy said that the Kia Motors plant in China had shut down because the cars were not getting sold and enquired about the status of the Anantapur plant. Reddy had alleged that with an eye on commissions, Naidu had given the company incentives to the tune of Rs 2000 crore.
Two, the YSRCP had also maintained that credit for this investment in Andhra Pradesh should go to Narendra Modi’s Make in India campaign and not to Naidu. This is because the Centre since 2015 has classified seven districts of Andhra Pradesh, including Anantapur as backward districts and hefty financial benefits are given to companies that set up base here.
Three, there is a back story to the Kia investment. The project till mid-2017 was originally meant for Tamil Nadu since the Hyundai Motors plant is based in Sriperumbudur. But the plan was shelved after allegations of corruption leveled by Kannan Ramaswamy, managing director of Infratech Infrastructure Services (local consultants for Kia Motors).
In a note in April 2017, Ramaswamy wrote : “The Tamil Nadu politicians demanded 50 per cent more than the official cost of the land as bribe.” Interestingly he also pointed out that his team after a detailed study had recommended Tamil Nadu as first choice, Gujarat as the second and Sri City in Andhra Pradesh as the third. Anantapur according to Team Naidu happened, because the then CM ensured there was no red tape involved. The Kia investment is to the tune of $1.1 billion and will roll out three lakh vehicles every year.
Four, Andhra Pradesh has consistently bagged the top spot in the Ease of Doing Business rankings brought out by the Union government. The achievement did not help Naidu win the elections but it helped him cement his carefully crafted image as the darling of India Inc.