Among the irregularities noted by the CAG are allotments made to the Obulapuram Mining Company, owned by mining magnate and former Karnataka minister G Janardhana Reddy, and various development agreements entered into by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC), such as land allotment to Emaar Properties, which has landed former APIIC managing director and senior IAS officer BP Acharya in jail.
Out of the 11 sampled districts, 459 allotments were made involving 50,285.90 acres. Out of these, 409 cases were scrutinised in the audit process. The audit scrutiny revealed that in test checked cases, undue benefit of R1,784 crore was given to various entities and persons, resulting in huge losses to the financial interest of the state.
Besides, 11 SEZs/IT parks had not generated expected employment. Against the total contemplated employment of 5.93 lakh jobs, four SEZs had generated zero employment opportunities and seven SEZs had generated only about 0.26 lakh jobs during the last four to five years, the report explained.
The state government did not have the primary data, which is essential for effective land administration. In the absence of a comprehensive database with regards to land, the state government had even allotted lands which were already assigned for other purposes,'' the report said. Besides, the government has also not formulated any land use policy defining its sector-wise priorities in allotment. This also included grave irregularities involving allotment in ad-hoc, arbitrary and discretionary manner to private persons at low rates.
Some of the major land allotment irregularities include allotment of 3,115.64 acres in Jammalamadugu mandal, YSR Kadapa district to Brahmani Industries Limited for setting up an airport and flying academy, in violation of the government's policy on setting up of commercial airports, and without verifying the suitability of the site and viability of the project. It overlooked the fact that the Kadapa airport was just about 50 kms away.
Another 10,760.66 acres was allotted to Brahmani Industries for establishing a green-field integrated steel plant, which involved illegal allocation of 674.58 acres of water bodies and allocation of 2 TMC of water from the Gandikota reservoir, without environmental clearance or independent examination of the project report. As of November 2011, even the first phase of construction had not been completed.
The Obulapuram Mining Company (OMC) had unauthorisedly occupied government lands, and also asked for grant of lease of 413.81 acres, the report stated. This was turned down by the collector of Anantapur in August 2008. However, within a month thereafter, this position was reversed by the collector, who, at the request of APIIC, recommended allotment of 304.66 acres to APIIC (for transfer to OMC) for establishment of industrial park, the report noted. The reasons for reconsidering the lease or alienating the land were not recorded.
The APIIC allowed private developers to utilise government land for real estate business. It irregularly executed a sale deed for 8,844.01 acres in Anantapur in favour of Lepakshi Knowledge Hub (LKH) even before creation of infrastructure by the developer (LKH). LKH did not establish any industry nor create any employment, but had mortgaged 4,397 acres for obtaining loans of R790 crore from the banks, the report stated.
APIIC entered into an arrangement with K Raheja IT Park Pvt Ltd. (KRITPL), the terms of which, enabled the latter to sell or mortgage government land of 110 acres, apart from exposing government to financial risk. The state government allotted 250 acres of land to Georgia Institute of Technology (GIT) at Rs 1.50 lakh per acre against the prevailing market value of Rs 18 lakh per acre which gave an undue benefit of Rs 41.25 crore to the Institute. GIT is yet to pay the cost of the land, the CAG report noted.
The CAG's observations also talked about land allotment to Emaar Properties which has put former APIIC Managing Director and senior IAS officer BP Acharya in jail. The report stated that APIIC allotted 535 acres of land in Ranga Reddy district to Emaar Properties PJSC, Dubai through APIIC for establishing an Integrated project with international standard convention centre, a hotel, golf course and multi-use developmental township. However, the SPV set up in terms of the MoU with Emaar re-assigned the rights of development of the project to its sister concern and diluted the financial stake of APIIC and control without its consent, the CAG said.
Further, the AP government had allotted over 34,000 acres of land through APIIC for industrial development in the state during 2006-11. However, APIIC allowed the private developers to utilize government land for furthering their real estate business, the envisaged purpose of developing IT infrastructure and generating employment was defeated, said the report.
Another fact which CAG referred in the report was the violation of environmental regulations. The state government has also violated the directions of the Supreme Court and its own orders in allotting 972.69 acres of water body in Sompeta mandal in Srikakulam district to Nagarjuna Construction Company. Besides, it has been a mute spectator to encroachment of its lands by regularising 14,878 encroachments involving 21 lakh sq.yards collecting a meager revenue of R63.71 crore, the report added.