Date:01/08/2005 URL: http://www.thehindu.com/2005/08/01/stories/2005080105340600.htm

Andhra Pradesh

Volkswagen envoy meets Andhra Pradesh officials

N. Rahul

To meet Chief Minister today; declines comment on row

HYDERABAD: Frank Elbe, who has been appointed special envoy to represent Volkswagen's interests in India, arrived here on Sunday morning to hold talks with the State Government in the backdrop of Rs. 11-crore scandal involving the company in efforts to set up a plant in Visakhapatnam.

The 64-year-old former Ambassador of Germany to India (1993-97) refused to speak about the company when contacted by The Hindu but showered praise on the country recalling his diplomatic stint here. He will call on the Chief Minister, Y.S. Rajasekhara Reddy on Monday. He was closeted with State officials led by Principal Secretary, Industries, D. Lakshmi Parthasarathy, and Industries Commissioner, Sutirtha Bhattacharya, in the evening.

`Schuster affair'

The Indian Ambassador in Berlin, T.C.A. Rangachari, had in a communication to the Government on Saturday said Mr. Elbe expected to discuss with it the fallout of what was being referred to in Germany as the "Schuster affair." (Schuster was the Volkswagen representative in India till he resigned after the scandal broke out).

Mr. Rangachari said Mr. Elbe's message would be that the company considered India to be a great country; a great destination for investment, and remained committed to entering the Indian market. There would be some delay in launching the VW project in India since they needed to go to the bottom of the "Schuster affair."

The Indian envoy's comments were reflected in Mr. Elbe's brief interview to The Hindu when the latter said India was a country that was not only interesting as a market but "interesting particularly because of its enormous potential for cooperation. It offers great opportunities to foreign investors."

Mr. Elbe praised the Indian legal system and the press which he described as "free but occasionally very insistent." India was a key player in the process of globalisation. As German Ambassador, he was impressed by the bold and farsighted economic reforms initiated by Manmohan Singh as Finance Minister in early 1990s.