Beverage company Coca-Cola has decided to withdraw its Rs 500-crore investment in Tamil Nadu and has asked the state government to refund money already pumped into the project.

The development comes 31 days before the Tamil Nadu Global Investors’ Meet.

A state government official said it was decided to cancel the land allotted to Hindustan Coca-Cola Beverages Pvt Ltd (HCCBPL) for its failure to start construction at the site in the six months allowed.

The Hindustan Coca-Cola Beverages spokesperson said the company had written to the state government that due to “unforeseen pressures and delays” it would not be able to invest in State Industries Promotion Corporation of Tamil Nadu (SIPCOT), Perundurai, in Erode district.

HCCBPL was allotted 71.3 acres of land by SIPCOT to set up a Rs 500-crore bottling plant in 2014. In the same year, the Karnataka government allotted 250 acres of land at Yadgir in the state's north for setting up a Rs 1,000-crore bottling plant.

The company spokesperson said HCCBPL took all steps to start construction at Perundurai but “the project was delayed due to unanticipated, outside pressures”.

He said among the approvals awaited were the agreement to procure water, clearances for laying a water line and an effluent transfer line, and permission for levelling land.

“Without these, we are unable to start construction. Despite repeated reminders to SIPCOT, there has been no progress. These inordinate delays, coupled with local activism against the project, could not have been foreseen nor prevented by us. We have requested the state government to refund the money paid so far,” the spokesperson said.

Residents in and around Perundurai have protested against the plant, fearing it will use groundwater.

HCCBPL earlier said it had no plans to extract groundwater at any stage at Perundurai and intended to use water provided by SIPCOT. No treated water would be discharged outside the plant and excess water would be used for irrigation within the premises, the company added. Locals asked the Union ministry of environment and the state government to intervene over the project.

They alleged the facility would not only deplete groundwater, but also discharge waste, affecting the environment.