It’s Andhra Pradesh versus Tamil Nadu in wooing Peugeot, part of PSA Peugeot Citroen, Europe’s second-largest carmaker.
While it is rumoured that Peugeot has already sealed a deal to set up a plant in Tamil Nadu, officials in Andhra Pradesh hope to bag the project.
“Peugeot has already clarified that there is no decision on setting up the unit in Tamil Nadu. Andhra Pradesh is likely to make an attractive offer to woo Peugeot,” a source familiar with the developments said.
Tamil Nadu recently announced that Peugeot had “decided to locate its plant at Sriperumbudur”. But Peugeot was quick to clarify that a decision was still to be taken.
Company officials also met Gujarat chief minister Narendra Modi on Thursday.
“The company has been showing interest in setting up its plant in Andhra Pradesh. It has also evaluated land in a special economic zone closer to Chennai. It’s an offer and counter-offer situation between Andhra and Tamil Nadu. From the Andhra government’s side, there has been an assurance that it would match all the incentives offered by Tamil Nadu or even make a better offer,” the source said.
Peugeot is said to be seeking 100% VAT reimbursement for 22 years in addition to free land and other incentives that are applicable to any major project. The Andhra government, sources said, would consider offering VAT reimbursement for 22-33 years depending on what other states proffer.
Problem is, Peugeot has sought similar benefits for all ancillary units that would come up around its plant, one person said.
“Similar benefits to all the units in the ecosystem is an issue. As far as incentives to Peugeot as a project is concerned, there is not much problem,” the source said.
For a project that would cost about Rs1,500 crore in the first phase, Peugeot is believed to be seeking about 800-1,000 acres.
Comments