Volkswagen to explore Punjab for car Plant

A team of top-officials from German automobile major Volkswagen is scheduled to reach Chandigarh on Thursday to discuss setting up its car manufacturing plant in Punjab.

Punjab has agreed to provide 350 acres of land to Wolfsburg, Germany based Volkswagen at Bela Road on the edge of Ropar, about 45 kilometers from Chandigarh.

And if talks become fruitful, a memorandum of understanding (MoU) is hopefully to be signed. This would also be the first car manufacturing facility in the state.

For Punjab, which freshly lost the Tata one-lakh car project to West Bengal, it would also be the first highly expensive foreign direct investment (FDI) in 40 years. At the present time there are only two big FDI projects in the state; the world’s biggest food and beverage company – Nestle’s Plant at Moga and Horlicks manufacturing facility at Nabha.

A senior government official ratified that two teams of the German auto giant have already visited Punjab and talked to the officials concerned and the Punjab chief minister about the project.

Top sources said Punjab has proposed the concessions to Volkswagen similarly as it offered to the Tatas. The state has also set forth alternative sites at Nabha and at Ladowal near Ludhiana. In addition to offering land at a concessional rate, the state is likely to compensate the company for central sales tax (CST). The land, possessed by the state, is being offered at a concessional rate of Rs. 2 lakh to Rs. 5 lakh an acre.

The sources also said that beside all this, the state is possibly to provide electricity to the company at concessional rate of about Rs 3.78 per unit for period of five year. Afterwards the company shall be charged the normal rate by Punjab State Electricity Board (PSEB).

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