Vindicating criticism over land deals, the Comptroller and Auditor General of India (CAG), in its March 2007 report, has indicted the state-owned Andhra Pradesh Industrial Infrastructure Corporation (APIIC) for inflicting a loss of Rs 304.52 crore on the exchequer. The CAG report was tabled in the Assembly during the recently concluded budget session.
As per the report, APIIC had ignored all rules and regulations formulated by the price fixation committee (PFC) to fix land prices resulting in straight benefit to allottees. Citing an example, the report said, while allocating 14.94 acre in Nanakramguda to IHHR Hospitality for setting up a spa, hotel and training centre, APIIC ignored the norms in fixing land prices. It had fixed the price as Rs 85 lakh per acre, far below the price fixed by PFC. This resulted in a loss of Rs 6.35 crore to the government besides interest loss of Rs 2.67 crore, the CAG report said.
The report has showcased 16 cases where APIIC had ignored land allotment norms and prices fixed by PFC. Accordingly, these companies had largely benefited on these deals amounting to Rs 308.45 crore. The companies that gained from the land deals are: Microsoft, Indu-tech, Brahmini Infratech, Stargage, Anantha Technologies, Hyderabad Gems, Infovision, Sree Kiran Technology, Amazan IT services, VisualSoft, Kanbay etc, the report added.
Defending the industrial policy of the government in extending land to industry at concessional rates, state chief minister YS Rajasekhara Reddy said the industrial policy was drafted to attract foreign investment. In the process, if the government decided to take price-cuts, it was only to attract multinational companies, which would enhance the economy besides providing employment opportunities. More than the subsidies, MNCs always look for land with clear titles and affordable price, a senior official said.
Among those who gained are three infrastructure firms?Indu, Brahmini and Stargage?who got 250 acre each in the hardware park, at a benefit of Rs 71.40 crore each. They were allotted land at Rs 20 lakh per acre, while the actual price as per PFC was Rs 48.56 lakh per acre.