The Comptroller and Auditor General of India on Thursday exposed a multi-crore land allotment scam in Andhra Pradesh.
In its report, tabled in the State Legislative Assembly on Thursday, on land allotments, the CAG has pointed out several irregularities relating to allotment of land by the State Government. The CAG has conducted a performance audit of ‘land allotment’ covering the allotments made by the State Government during the five year period from 2006 to 2011.
During 2006-11, the State Government alienated or allotted 88,492 acres of land to 1,027 beneficiaries. In the 11 sample districts, 459 allotments were made involving 50,285.90 acres of land. Out of these, 409 cases were scrutinised in CAG audit. “Audit found that land allotments for commercial purposes were not made in a fair, consistent and transparent manner so as to serve the public interest,” the report said.
“Alienation/allotment of land by the State Government during 2006-11, was characterised by grave irregularities, involving allotment in an ad-hoc, arbitrary and discretionary manner to private persons/entities at very low rates, without safeguarding the financial and socio-economic interests of the State,” the report said.
The rates proposed at different established levels of the government hierarchy were disregarded and substantial benefits were unduly granted to private parties. Audit scrutiny revealed that in the test-checked cases undue benefits of Rs 1,784 crore was given to various entities and persons, due to the difference in the rates at which land was allotted and the market value as recommended by the District Collector/Empowered Committee. In a large number of cases of land allotment, the State Government has ignored the prescribed procedures and disregarded canons of financial propriety.
Listing out the specific cases, the CAG said 3,115.64 acres of land in Jammalamadugu mandal of Kadapa district was allotted to Brahmani Industries Limited for a setting up a commercial airport and Flying Academy, in violation of GOI’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.
Similarly, 10,760.66 acres of land in the same mandal was allotted to Brahmani Industries Limited for establishing a green field Integrated Steel Plant, this involved illegal alienation of 674.58 acres of water bodies and alienation 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 1st phase of construction had not been completed.
The APIIC irregularly executed a sale deed for 8,844.01 acres of land in Anantapur district in favour of Lepakshi Knowledge Hub Ltd even before the creation of infrastructure by the developer. LKH did nto establish any industry nor create any employment, but had mortgaged 4,397 acres of allotted land for obtaining loans of Rs 790 crore from the banks.
The request of Obulapluram Mining Company, which had unauthorisedly occupied government land, for grant of lease of 413.81 acres of land was turned down by the Collector, Anantapur in august 2008. However, within a month thereafter, this position was reversed by the Collector who, at the request of APIIC, recommended alienation of 304.66 acres of land to APIIC (for transfer to OMC) for establishment of industrial park. The reasons for reconsidering the lease or alienating the land were not recorded.
Government lost revenue of Rs 874.03 crore by alienating 881.32 acres in Mamidipally village, Ranga Reddy district to APIIC at a meager cost, APIIC, in turn allotted 500 acres of this land at very low rates to Indu Tech Zone and Brahmani Infra Tech even before orders of alienation were issued.
The process of agreement with VANPIC and alienation of land lacked legitimacy and transparency. As the terms of agreement were loaded heavily in favour of VANPIC without leaving any elbow room for the government to amend the provisions of the agreement, it has serious financial and legal implications for the government.
APIIC entered into an agreement with K Raheja IT Park Pvt Ltd, the terms of which, enabled the latter to sell/mortgage government land of 110 acres, apart from exposing government to financial risk.
State Government allotted 250 acres of land to Georgia Institute of Technology (GIT) based on the orders of the then Chief Minster 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.
Government 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 Star 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 concerns. This process diluted the financial stake of APIIC/Government without its consent and diluted its control over a developmental initiative in which it had invested substantial equity.
Revenue of Rs 72.07 crore and Rs 39.60 crore respectively were forgone by government, through allotment of land in Chillakur mandal of SPS Nellore district (through APIIC) at very low rates for establishment of an industrial park by Simhapuri Energy Pvt Ltd/Vikas Power Ltd and setting up of two power projects by Simhapuri Energy Pvt Ltd/Meenakshi Energy Pvt Ltd.
Instead of taking action for unauthorised occupation of 20.06 acres by Bellary Iron Ore Ltd, the Anantapur District Collector accepted an amount of Rs 0.63 crore in respect of an application for an additional 50.69 acres of land by BIOL and disbursed awards to the assignees for resumed land, even before approval of government.
In 60 cases, alienation cost amount to Rs 2,559 crore was not collected by the District Collectors from the institutions to which land was alienated between 2003-04 and 2010-11.
The State Government has allotted over 34,000 acres of land to/through APIIC for industrial development in the State during 2006-11. However, APIIC could not provide the required thrust towards targeted industrialisation of the State de3spite thousands of acres of land being alienated to it by the government, the CAG report said.
Further, the APIIC while entering into development agreements and related allotment of lands to various entrepreneurs, not only failed to safeguard government interest but also failed to monitor effectively the end uses, causing considerable loss to the government exchequer.
As APIIC allowed the private developers to utilized government land for furthering their real estate business, the envisaged purpose of developing IT infrastructure and generating employment were defeated. APIIC did not safeguard Government interest in permitting these private firms to mortgage/sell government land exposing government to financial risk.
Further, 11 SEZs/IT Parks had not generated the 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 4-5 years.
In several cases, the land was not utilised for the purpose for which it was allotted.
Citing an instance, the CAG said, for establishment of ‘Health City’ in Visakhapatnam, the APIIC allotted plots to 10 hospitals with a stipulation to complete the projects within two years and extend free treatment to 10 per cent of poor out-patients and to the students of Government residential schools. However, none of the entrepreneurs had established the intended hospitals as of July 2011.
Government land to the extent of 615.43 acres were allotted, between June 200 and June 2010, to 58 units in Hardware Park, Maheshwaram, RR District. 36 units had not implemented their projects, while 11.97 acres of land were allotted to be irregularly diverted to 5 units for commercial purposes such as hotels, petrol bank and office.
As many as 25 other cases involving non-utilisation of 5,520.28 acres of land allotted prior to 2010 for different purposes were detected ring the test-check of records.
The CAG has also accused the State Government of being a mute spectator to encroachment of its land. Instead of instituting a mechanism for preventing and detecting illegal encroachments and dealing with them swiftly and effectively, in a sense, it has fuelled encroachments by regularising 14,878 of such unauthorised encroachments involving 21 lakh sq yards of land, collecting meagre revenue of Rs 63.71 crore. (INN)