Telangana opposes move to allocate pharma parks project based on costs

HYDERABAD: Telangana has opposed the Centre’s proposal requiring states to compete for its bulk pharma parks project based on the costs and incentives they give to the industry, known as the challenge mode.
The Union government, which proposes to allocate Rs 1,000 crore for each of the three bulk drug parks that will be chosen based on competitive land prices, power tariffs, incentives as well as quick clearances by states, has fixed October 15 as the deadline for states to submit their requests with details of costs and incentives.

Telangana, India’s bulk drugs capital with dozens of large generic drug firms and which has been competing to secure one of the three proposed pharma parks, has raised objections to the weightages prescribed for various aspects in the challenge mode, saying it defeats the purpose of self-sufficiency.

In a letter written recently to Union Minister of Chemicals and Fertilizers DV Sadananda Gowda, Telangana industries minister KT Rama Rao said “costs should not be the only factor for selection as there are many non-tangible factors which are also responsible for success of the pharma industry.”

Rao also favoured amending the scheme guidelines “to recognize and prioritize the readiness of the project/applicants, including planning, environmental clearances, etc as the primary criteria for selection of the applications.”

While highlighting more than three years of efforts by the state to develop Hyderabad Pharma City in order to promote competitive domestic manufacturing of pharmaceuticals, Rao wrote that the “availability of ecosystem conducive to API manufacturing and demand from industries to set-up manufacturing units should also be given maximum emphasis as part of your selection process.”

Opposing the high weightages proposed by the Centre to the costs/incentives that States offer to the industry, Rao said the land costs in a city will be higher than that of a site located 300-400 km from an urban area.

“However, the objective of creating a knowledge driven economy will be defeated as talent attraction and retention will be a major challenge in such places. These factors also contribute significantly to the competitiveness of the industry and also will involve costs associated with housing, transportation of employees, etc. Such locations will also not be attractive for global investors,” he pointed out.