The attempt to orchestrate support for YS Jaganmohan Reddy as Andhra Pradesh (AP) chief minister soon after his father, YS Rajasekhara Reddy, was killed in a helicopter crash is as much the result of business pressures as political expediency.
Despite being a grassroots politician, YSR had close links with many businessmen and realtors, and these interests are concerned about the fate of their projects now that the strongman is no longer around. They see Jaganmohan as an insurance against changes in the state's stance on their projects.
"Every major business house in the country, from the Ambanis (who have gas and pipeline interests in the Krishna-Godavari basin) down to medium and large realtors, has committed itself to invest in the state following YSR's re-election in May, 2009. Several thousands of crores have gone into some of these projects. Any major change in the state's power structure could hurt them. Though we can't talk about favours to politicians by these businessmen, we can definitely say the stakes are extremely high and one has to protect them," said a realtor.
Real estate and infrastructure have been key areas where political support is vital in AP. The Satyam scandal, for example, had a strong real estate and infrastructure connection, both areas in which state governments play a large role.
"There are definitely big bets as far as the industry is concerned. YSR's son Jagan knew of many commitments made by YSR to industry in AP. So, it is natural that industry expects Jagan to take over as chief minister," a senior industrialist with interests in power and mining told DNA.
Businessmen are reposing faith in YSR's son as they saw his father protecting their interests even when faced with strong political opposition. Obulapuram Mining Company, owned by Gali Janardhan Reddy of Bellary, is being cited as the best example by several industrialists. His company had asked for about 10,000 acres for mining on the AP-Karnataka border and he was given about 10,700 acres. In addition, YSR had written to the Centre for facilitating the sanction of Rs1,000 crore as loan to Janardhan Reddy.
Many opposition parties, including the N Chandrababu Naidu-led Telugu Desam, had criticised the chief minister for using his office for the benefit of a businessman. But YSR did not yield to the criticism.
Similarly, a major port project taken up by N Prasad, founder of pharma company Matrix, was protected by YSR. Prasad's Vadarevu and Nizampatnam Port Infrastructure Company was given a mandate to develop the two ports on the Andhra coast. While the original land requirement was stated to be 9,700 acres, the plan was revised to allot 28,000 acres. The project is in a nascent stage and needs backing. Prasad is also a major investor in Sakshi, a Telugu news daily set up by YSR's son.
Similarly, a cement major, with significant clout at the Centre, is said to be a keen backer of Jagan. A pharma company, which is setting up a special economic zone (SEZ) on the outskirts of Hyderabad, is doing its bit to lobby for him.
The SEZ lobby, primarily driven by pro-Congress businessmen, is worried about the future of its projects. AP has the highest number of approved SEZs in the country, with most being promoted by businessmen with realty backgrounds. While land acquisition was facilitated by the YSR government, the promoters were promised help to divert potential investors to their SEZs.
Many construction companies, from Gammon to the homegrown Nagarjuna Construction Company, have huge stakes in the Jalayagnam irrigation project of YSR. Projects under Jalayagnam have been taken up with a budget of about Rs1,30,000 crore. Though most construction companies have been given work on a contract basis (EPC), there was never a major delay in clearing bills.
"Unless we get a successor with the same commitment to completing the projects by getting clearances from the Centre, it will be very difficult for us to get our bills cleared. Going to courts for this is the last thing we can think of. If the successor is committed to the irrigation projects, we don't have to depend on lobbying," a major irrigation contractor said.
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