Government selective in land deal cancellations

We have served the companies notices and written to the IT department too. There is nothing we can do about it now," said K Dharma Reddy, executive director, APIIC.
By: Times of India/Hyderabad
June 22, 2012 - PRLog -- The recent CBI investigations have led to hectic activity in the state's corridors of power. To save face, the govement has recently issued a flurry of notices cancelling land allotments made to private projects that have failed to materialize, despite the lapse of deadline. It is, however, curiously sitting pretty on three allotments, made to Brahamani Infra Tech, Indu Tech Zone and Stargage Properties, that too violated similar norms. The companies were leased 250 acres each in the city's Hardware Park, near Shamshabad, in 2007.

It tus out that a decision to cancel these allotments, considering that none of these projects have taken off till date, was taken by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) early last year, much before the CBI started its scrutiny. Ever since, these files have been gathering dust in the Information Technology (IT) department, say sources. The reason for this unwarranted delay, however, is not known to many. When quizzed, APIIC bosses passed the buck on to the IT officials (the department has the final authority) who in tu threw the ball into the legal department's court. They even claimed that the file reached their office only three-four months back. "Such decisions take time. We are in the process of seeking legal opinion from the advocate general and will take a final call only after that," said Sanjay Jaju, secretary, IT and communications department. He said that APIIC had forwarded the matter to the IT wing only recently.

Reliable sources within the govement who confirmed that the file was moved from APIIC to the IT department several months ago, however, alleged foul play and said the prolonged delay was rooted in the "vested interests" of govement officials. "When the conditions of an agreement are blatantly violated, there is no need for legal opinion at all. It is an open and shut case where the govement can go ahead and cancel the allotment right away. It is perhaps buying time to see if the land can be 'legalised' again by fleecing the allottees," said highly-placed govement sources. Citing the example of recent cancellations, which included Brahamani Steel (Kadapa) and Bayyaram Iron Ore Mines (Khammam), they pointed out how these decisions were taken in a jiffy.

The Hardware Park allottees were leased this prime land at Rs 20 lakh per acre, five years ago, when the rate fixed by price fixation committee (PFC) was a high Rs 48.57 lakh per acre. The govement claimed that these ventures would boost the state's IT sector. The projects, as per the agreement, were likely to take off within four years of allotment. "Indu Tech had expansion plans of bringing inteational brands to the city to set shop on this land. There was much brouhaha over this project when first announced. It later died away," said a city realtor.

In 2008, a report of the Comptroller and Auditor General (CAG) tabled in the state Assembly accused APIIC of dishing out undue benefits to these companies and stated that it had caused huge losses to the govement coffers. As per the report, eight other companies apart from these three were 'gifted' land at throwaway rates that resulted in a total loss of Rs 304.52 crore for the state.

"We have served the companies notices and written to the IT department too. There is nothing we can do about it now," said K Dharma Reddy, executive director, APIIC. While Reddy initially admitted that the matter was posted to the IT wing a year ago, he later tweaked his version. "There was some additional information that the department required. We sent that only a few months ago," he said.

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Industry:Real Estate
Location:Hyderabad - Andhra Pradesh - India
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