Promised twice to 2 governments, Adani data park yet to come up in Vizag

Three years since the YSRCP government accepted a revised proposal, the stone indicating the beginning of works is yet to be laid.

BySNV Sudhir

Published Feb 16, 2023 | 11:00 AMUpdated Feb 16, 2023 | 8:09 PM

Adani group Data centre Vizag

Uncertainty looms over the proposal by the now-beleaguered business conglomerate, the Adani Group, to set up a data park in Visakhapatnam, the coastal city that was announced as the executive capital of Andhra Pradesh by the YSRCP government recently.

Though the idea to establish the data park by the Adani Group was first mooted during the TDP regime just before the 2019 general elections, there has not been much progress on the proposal barring Visakhapatnam Metropolitan Region Development Authority (VMRDA) okaying the layout plan for the proposed project last year.

It’s been almost three years since the YSRCP government accepted a revised proposal from the Adani Group on the proposed data park at Kapuluppada in Visakhapatnam on 130 acres of land, but the foundation stone that would indicate the beginning of construction works is yet to be laid.

While there were reports that the foundation stone for the data park would be laid by Adani Group Chairman Gautam Adani and Andhra Pradesh Chief Minister YS Jagan Mohan Reddy during the upcoming two-day Global Investors Summit scheduled on 3 and 4 March, government sources said that the chances of such a possibility were bleak.

Also Read: Global Investors Summit @ Vizag: ‘Advantage Andhra’

Adani Enterprises subsidiary

In April 2021, Adani Enterprises Ltd (AEL) incorporated a wholly-owned subsidiary, Vizag Tech Park Ltd (VTPL), with an authorised share capital of ₹5 lakh, to develop a data centre and business park.

“VTPL is incorporated with the object to develop and establish an ‘integrated data centre park and technology/business park’,” Adani Enterprises said in a filing to the BSE.

Interestingly, the state Cabinet, in a recent meeting, okayed the proposal of the Adani Group company VTPL to set up another data park of 100 MW capacity.

The government said VTPL would establish a 100-MW data centre at Kapuluppada in three years with an investment of ₹7,210 crore, starting with a 10-MW capacity unit in the first phase.

This is expected to provide direct employment to 14,825 people and indirect employment to 5,625 people. This is in addition to the 200-MW data park that is already coming up.

“I really don’t understand why chief minister YS Jagan Mohan Reddy showers so much love on Adani. Another 60 acres of land is being allotted to the Adani Group — which is now neck-deep in debt — to set up a data park. Jagan has already handed over the Gangavaram and Krishnapatnam ports to Adani,” observed P Vishnu Kumar Raju, the BJP MLA from Visakhapatnam North.

Also Read: Vizag will be our capital, I will move there, says Jagan

Data park proposal downsized

In the past, AEL inked an MoU in 2019 with the then TDP government to set up three such data parks at Nakapalle, Kapuluppada, and Bhogapuram in Visakhapatnam.

While the extent of land at Bhogapuram that the Adani Group sought was not known, the conglomerate planned data parks across 150 acres in Kapuluppada and 350 acres in Nakkapalle.

However, after the YSRCP came to power, the Adani Group submitted a revised proposal under which it proposed to establish an integrated data centre park and technology or business park — including a 200-MW data centre park, IT business park, skill university, and recreation centre — in Madhurawada.

Notably, the initial proposal during the TDP regime was to develop 5-GW data parks in the Visakhapatnam region over time at different places, but as per the revised proposal, the capacity of the data park has been downsized to 200-MW, that too at a single location.

The government allotted the land at a price of Rs 1 crore per acre to the Adani Group.

The government  allotted 130 acres of land to AEL to set up the data park in survey No 409 of Madhurawada, which was originally in the possession of the state’s Tourism Department.

Also Read: BRS MLC K Kavitha seeks JPC probe on Adani crisis

Adani Group and TDP

When the Adani Group signed the MoU with the TDP government in 2019, it was hailed as a step that would boost the country’s technology infrastructure and give a fillip to the concept of green data centres.

The TDP government claimed that the Adani Group would develop the hyper-scale data centre market in the state, positioning it as the east-coast data centre hub for India and South East Asia, with an investment over ₹70,000 crore over a period of 20 years, which in turn was expected to create in excess of one lakh direct and indirect jobs across the state.

The Adani Group’s integrated data park was also to interface with a cable landing station that would take advantage of the state’s long coastline to help provide the needed global connectivity and redundancy that the country needed to manage its exponential growth in data.

The YSRCP government also extended the timeline for implementing the project under the Artificial Intelligence (AI) CloudHub Policy 2018-20, with the condition that the project proponent must commence operations within three years and complete all phases of all the components of the project within seven years from the date of handing over of the land.

The government also extended a 100-percent reimbursement of SGST on all data-centre units, electrical, communication & IT equipment for capital expenditure for a period of seven years from the date of handing over of land.

Adani commitment at ₹14,634 crore

The Adani Group, in its revised proposal submitted to the YSRCP government in 2020, committed ₹14,634 crore in investment in seven years in five phases to establish its data centre and IT business park. It also committed to the employment of 24,990 people.

As per the revised Detailed Project Report submitted by AEL, the data park would provide 1,200 have employees and the companies that would come up in the business park would provide 21,000 direct employees.

As per the timelines proposed by AEL, the project would commence operations with 30 MW initially and scale up  to 60 MW, 110 mw, 160mw and 200 mw in phases  in seven years period.