MoUs take time to materialise, says Sridhar Babu

Sridhar Babu said MoUs take time to materialise, noting only 30 percent to 35 percent become projects. Harish Rao flagged issues in IT towers, including company exits and poor maintenance. The government said steps are underway.

Hyderabad: After boasting about securing Rs 2.19 lakh crore investments at the Davos 2024 and 2025 editions, Industries Minister D Sridhar Babu said investments announced through MoUs require time to translate into projects on the ground.

Responding to questions in the Assembly on Thursday, he said only a portion of agreements typically materialise. Referring to a past conversation with Maharashtra Chief Minister Devendra Fadnavis, he noted that about 30 to 35 per cent of MoUs usually reach the implementation stage.

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The Minister said several challenges emerge after agreements are signed. Companies may struggle to achieve financial closure, face issues in securing loans, or encounter differences among partners. He said the State government conducts due diligence, including scrutiny of financial strength and project reports, before moving forward with proposals.

“Due to a lack of understanding of this process, a few persons were indulging in false propaganda against the government,” Sridhar Babu said.

Meanwhile, BRS Deputy Floor Leader T Harish Rao raised concerns over the condition of IT towers set up in tier II and III cities during the previous BRS government. He said IT towers in places such as Warangal, Khammam, Nizamabad, Mahabubnagar, Karimnagar and Siddipet were established to generate employment for local youth.

He alleged that several companies were leaving these facilities. At the Siddipet IT tower, the number of firms had dropped from 18 earlier to 11, with seven relocating, he said.

He also flagged operational issues, including delayed bill payments, internet disruption and non-payment of salaries to support staff for the past four months.

The BRS Deputy Floor Leader also said the previous government had offered three years of free rental service to companies to sustain and suggested extending the support for another three years.

Sridhar Babu acknowledged that firms in tier II and III cities were facing challenges, particularly in upgrading workforce skills amid the growing role of artificial intelligence. He noted that trained employees often move to Hyderabad for better opportunities.

Similar concerns were raised by two companies in Warangal, he said, adding “Our government is taking steps to retain companies in smaller cities.”

On the proposal to extend rent concessions, he said a policy decision was required, as Telangana State Industrial Infrastructure Corporation could not take such a call independently.