Beset with problems of protests by locals, a 360-acre leather complex coming up in Andhra Pradesh has received another jolt.

The Department of Industrial Policy and Promotion under the Commerce Ministry has asked Krishnapatnam International Leather Complex Private Ltd, the special purpose vehicle set up jointly by the Andhra Pradesh Industrial Infrastructure Corporation and Leather Industries Development Corporation of Andhra Pradesh, to return the ₹29 crore it had disbursed for the project.

Following protests due to concerns of environmental impact by the tanneries, the developers had decided in December last year to shift it closer to the coast at Kothapatnam, about 40 km from Krishnapatnam, the original location. The project has now been brought under the Mega Leather Cluster Scheme notified in March last year. This will help it gets funds upto Rs 125 crore.

The DIPP has said since the location has been changed, a new detailed project report should be filed and the disbursed fund returned, said a source associated with the project who requested anonymity.

Prof Asit Baran Mandal, Director, CSIR-Central Leather Research Institute, which will provide technical assistance to the project, said: “The DIPP has asked us to prepare a new project report. This will delay the project further. It was conceptualised under the 11{+t}{+h} Five-Year Plan, and a lot of time has elapsed.”

KR Vijayan, Managing Director, Good Leather Company, says he is ready to move his unit from Periamet in Tamil Nadu to Kothapatnam, because the industrial zone is located near three ports – about 5 km from Krishnapatnam port, and about 160 km from Chennai and Ennore Ports.

Expected to come up at a cost of $200 million, the leather complex will go operational by fiscal year 2016-17, said Rajendra K Jalan, Chairman, Council for Leather Exports.

Related Topics