AP government cancels Moser Baer project

The Andhra Pradesh government today said it had cancelled the agreement that it had executed with Moser Baer Infrastructure Developers Limited for setting up a crystalline-based solar cells and thin film solar cells facility on the outskirts of Hyderabad.

The state government and Moser Baer had signed the Memorandum of Understanding (MoU) on 16 April 2008, which envisaged the company setting up a manufacturing facility at the proposed Fab City Special Economic Zone for solid state memory devices like USB drives and flash cards, in the first phase, at an outlay of $200 million within 24 months.

For the second phase,  the company agreed to set up units for making  semi-conductor optical storage media, photovoltaic, thin film technology as also nano technology units with an additional investment of $300 million within 36 months.

The company would also provide direct and indirect employment to 2,000 persons during the period according to the agreement.

''The company is not willing to take up the project in the agreed terms and also failed in implementation of the project within the stipulated time. Hence, the government hereby cancels the MoU executed with Moser Baer,'' principal secretary (industries) B Sam Bob said in an order today.

In January this year, the state government cancelled an allotment of 100 acres of land to Moser Baer in the Fab City for failing to pay an earnest money deposit of Rs1.5 crore against the lease premium of Rs15 crore and also non-submission of its concrete business proposal despite repeated reminders by the Andhra Pradesh Industrial Infrastructure Corporation.

The company sought to modify its obligations in the MoU, with regard to investments in Phase-I and II due to economic recession. It also sought extension of the project deadlines by two and three years respectively for each phase.

Rejecting the company's request, the government cancelled the MoU.