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Reddy and Raju families agree on dividing Andhra into three states

06, Jan 2011 By Wimwian

Hyderabad. In a day of dramatic developments, the various Reddy and Raju families of Andhra Pradesh have reached a settlement and agreed on how to carve up the erstwhile state of Andhra Pradesh.

“This agreement is fair and will be binding on all political parties”, said Mr. Jaganmohan Reddy, announcing the conclusion of a day-long discussion that involved all 23 ruling families of Andhra Pradesh.

As per the details that have been announced thus far, the state will be divided into three states: Telangana, Rayalaseema, and Coastal Andhra Pradesh. Each state will have its own new capital city, and building the official buildings, roads, and metro systems for each city will require hundreds of billions of dollars of new contracts, which will be shared “fairly” amongst the 23 families.

For the first three years, each of the three main parties: Congress, TDP, and TRS will get to nominate one Chief Minister each, after which free and fair elections will be held in all three states. It is expected that all the city-building contracts would have been awarded by then. Jaganmohan Reddy also announced that he was dissolving his own recently formed political party. It is believed that in return, his companies will be given first choice of the new contracts to be awarded.

Map of Andhra Pradesh
It was decided on purpose to keep the new map of Andhra Pradesh colorful to reflect the mood of the decision makers

Hyderabad will be carved out into a separate entity, which would become a multi-product SEZ owned by a consortium of Telugu Biddas (“sons of the soil”). The ownership of the consortium has not yet been announced, but it seems each of the 23 families would each be allocated 3% each, with a further 11% reserved for “political parties and party-members”.

20% would be offered to a global Private Equity fund or hedge fund, and bids are expected to be invited within three months. Amit Ambuja, Managing Director of hedge fund DE Claw, denied that he had been approached yet, but expressed keen interest in such a project.

While IT companies present in Hyderabad welcomed the development, saying that SEZ status would benefit them in their business, other companies were not quite so positive.

“If Hyderabad-based companies will only be allowed to export their services under the SEZ laws – what about the many businesses that serve customers from the rest of Andhra?” asked Mr. Tabrez Jalil, who runs a tractor dealership in Hyderabad targeting farmers from Telangana.

When this reporter addressed the same query to the Union Commerce Minister Anand Sharma, he initially denied that any export rules would be relaxed for the proposed SEZ, but later denied his denial.

“The scale of construction and related developmental challenges facing the three new states is truly monumental, and we should all help them in this hour of need”, he said, before muttering that he could only speak after “consulting with the High Command” and leaving for an important meeting.

But some Maoist sympathizers and activists have reassured “worried” businessmen like Mr. Jalil to wait a little till they declare independence from India. “They can start exporting their goods to us, we are fair in our dealings,” declared a Maoist leader with his face covered with a red colored cloth.