Firms say conversion rate high for MoUs inked at Vibrant Gujarat

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Reliance Industries Ltd (RIL), Adani Group and Essar Group among others on Monday rejected accusations that agreements signed at Vibrant Gujarat summits remain on paper. The companies’ representatives were speaking at a media conference to promote the next edition of Vibrant Gujarat to be held in January 2017 in Gandhinagar.

“There is general criticism that agreements at Vibrant Gujarat are not fulfilled by corporates. This is not true,” said Parimal Nathwani, group president (corporate affairs), RIL. Nathwani said the total investment by RIL in Gujarat is about Rs2.37 trillion. Of this, the group had committed investments to the tune of Rs1 trillion in the last two Vibrant Gujarat summits.

Pranav Adani of the Adani group said that the Ahmedabad-headquartered company had announced investments to the tune of Rs50,000 crore at the summits held in 2013 and 2015. These were in various sectors including ports, power and renewable energy.

“We have implemented 75% of our projects for which we had made commitments at the two Vibrant Gujarat summits,” he said.

Rajiv Agarwal, MD and CEO of Essar Ports, said the group had signed MoUs to the tune of Rs1.1 trillion of which Rs80,000 crore has already flowed into various projects including ports, power, steel and refinery.

Started by Prime Minister Narendra Modi when he was chief minister of Gujarat, Vibrant Gujarat Investment Summits aim to promote the state as an industry-friendly destination. The first summit was held in 2003.

At the summits, held every two years, memoranda of understanding are signed between government departments and corporates. Concerns have often been raised about the conversion ratios of these agreements.

Sharing figures from the previous two Vibrant Gujarat summits held in 2013 and 2015, representatives of some large corporate groups said close to 70% of the investment commitments made had flowed into the state.

Pankaj Patel, chairman and managing director of Zydus Cadila group, said quoting government figures that in the seven editions of the summit held so far, as many as 51,738 MoUs have been signed of which about 30,065 have been commissioned and 4,014 are under implementation, indicating a 66% success ratio.

Patel, who has signed agreements worth Rs750 crore for a biotech facility, educational institutes and hospitals said all his projects have been implemented.

Asked about investment figures in all Vibrant summits and the actual investment that has flowed in so far, Patel and Nathwani said these figures were not readily available with them.

Nathwani said Vibrant Gujarat provided a platform to industrialists and businessmen and also an opportunity to get single-window clearance.

“We have in fact invested about Rs1.25 trillion, which is much more than what we have committed,” Nathwani said, adding that RIL has invested close to Rs92,000 crore in at its Jamnagar facility that houses two refineries and is setting up a petrochemical complex.

Apart from this, the company has invested to the tune of Rs16,000 crore at its manufacturing facilities in Dahej and Hazira and about Rs9,000 crore in its telecom venture Reliance Jio in Gujarat as part of Vibrant Gujarat commitments.

According to Patel the onus of success or failure of a project proposed at Vibrant Summit lies with the corporate and the state government’s role is limited as it is only a facilitator.

Patel said that in 2015 Vibrant Summit 23,3104 MoUs were signed of which 15,401 were already commissioned or are under various stages of implementation. In 2013, he said that 17,719 MoUs were signed of which 10,770 were commissioned while 1460 were in under implementation. The remaining 5,690 have been dropped, he said.

A Welspun group executive said that his group has signed agreements of about Rs30,000 crore since the first Vibrant summit in 2003 and in the last two editions they have entered into pacts with the state government to invest Rs. 12,000 crore in the state in textile, infrastructure, CSR and environment projects. As many as 66% of these projects have been implemented and investments have flowed in, he said.

According to Jayesh Desai, executive director of Torrent group, the company had signed pacts to the tune of Rs2,000 crore for pharma, wind and solar projects all of which are operational today.