High Commissioner wants SG to invest in “preferred” state of Tamil Nadu when Kia pulls out

High Commissioner wants SG to invest in “preferred” state of Tamil Nadu when Kia pulls out

It was reported by the Indian media last Wed (21 Oct) that Singapore High Commissioner to India, Simon Wong Wie Kuen, flew from Delhi to Chennai for a series of meetings with Tamil Nadu officials including the state’s chief minister Edappadi K. Palaniswami despite the health risks posed by the current COVID-19 pandemic in India (‘High Commissioner risks his health despite COVID-19 to fly to Chennai drawing investments for India‘).

Speaking to the media, Wong said, “I think the Chief Minister is looking at a forward-looking plan to transform the economy of [the regions] surrounding Chennai and, of course, Tamil Nadu. Singapore wants to be part of this process.”

He revealed that between 2018 and now, Singapore has, in fact, invested about $1 billion in the Indian state of Tamil Nadu. He also told Indian media that the relevant agencies in Singapore will be reaching out to the Indian authorities for discussions regarding India’s travel bubble proposal to establish travel between both countries.

“India is an important partner for Singapore and the strong air connectivity between our countries prior to the pandemic had been critical to driving the flow of trade and investment, and people-to-people exchanges,” Wong added.

Travel bubbles are essentially an exclusive partnership between countries to re-establish travel connections between them by opening up borders and allowing people to travel freely within the zone without having the need to undergo on-arrival quarantine. Also, those entering the travel bubble need to present official documents stating are COVID-19 free.

In fact, to signal that Tamil Nadu is the preferred State for Singaporean investments to go to, Wong was willing to sacrifice his personal health to fly to Chennai, the state capital of Tamil Nadu.

“That is also the main reason why, despite COVID, we are making a trip from Delhi to Chennai. This is my first stop. And I feel that we need to, despite the health risks, we want to signal to the Tamil Nadu government that we take our partners very, very seriously. And we will also want to signal to our Singaporean investments that this is the preferred State to put their money in,” he said.

Kia Motors pulls out of Tamil Nadu

Investing in Tamil Nadu, is of course, not without risk. In 2017, South Korean Kia Motors decided to build its auto factory in the state of Andhra Pradesh after Tamil Nadu politicians allegedly demanded huge bribes from Kia (‘Kia Motors moved to Andhra Pradesh as Tamil Nadu politicians demanded bribe, says industrialist‘, 3 May 2017).

Mr Kannan Ramasamy, managing director at Infratech Infrastructure Services of Chennai and local consultants for Kia, alleged that Tamil Nadu state politicians had demanded “a very huge bribe” from the South Korean company.

“The TN politicians demanded 50% more than the official cost of the land as bribe,” the Kia’s consultant revealed. “They wanted a very huge bribe for the same apart from the land.”

A Korean news media also reported that Kia dropped its plan to build its first Indian auto plant in Tamil Nadu after local officials allegedly demanded massive bribes (‘Kia skips Tamil Nadu as Indian plant site due to graft‘).

Eventually, Kia announced its US$1.1 billion investment for a new factory in the state of Andhra Pradesh instead. “Tamil Nadu has not only lost the US$1.1 billion from Kia but also the allied ancillary investments of more than the Kia figure,” Ramasamy said expressing disappointment. “More than that, huge employment opportunity is lost for the Tamil Nadu youth and auto professionals. I hang my head in shame.”

A senior Tamil Nadu official, however, said the state tried to bring Kia into the state but denied any knowledge of the bribery allegations.

Tamil Nadu is 3rd most corrupt state in India

Tamil Nadu is notorious for corruption. According to the NCAER State Investment Potential Index survey conducted by National Council of Applied Economic Research (NCAER), 71.8% of investors surveyed said corruption is a “severe” problem in Tamil Nadu.

The Centre for Media Studies (CMS) in India also ranked Tamil Nadu as the third most corrupt state among India’s 28 states and 8 union territories.

A CMS’s 2017 study has pointed out that 68 percent of respondents in Tamil Nadu felt that they had trouble accessing public services due to corruption.

Mr Jayaraman, the coordinator of Arappor Iyakkam – an organisation that has been fighting graft – said, “There is a lot of centralised corruption. It’s there right at the top (in Tamil Nadu).”



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