Hyderabad, August 15: A land deal struck by the Andhra government under former CM Y. S. Rajasekhara Reddy with Emaar Properties has kicked up a major political controversy in the wake of his son Jaganmohan Reddy’s revolt against the Congress high command.
A section of Congress leaders from Rayalaseema, who are opposing Kadapa MP Jagan, exposed the murky deal which is believed to have caused a loss of Rs 2,500 crore to the exchequer.
Interestingly, Jagan’s staunch loyalist and campaign manager Ambati Rambabu, who was recently suspended from the Congress, was the chairman of the AP Industrial Infrastructure Corporation (APIIC) when the alleged scandal took place.
The APIIC is the nodal agency for developing infrastructure projects on behalf of the state government and it had signed the deal with Emaar Properties, a Dubai- based company.
D. L. Ravindra Reddy, Congress MLA from Mydukur in Kadapa, and J. C. Diwakar Reddy from Tadipatri in Anantapur, are writing to Congress president Sonia Gandhi seeking a CBI inquiry into the property scandal.
“It is one of the biggest scandals in the state’s history and needs to be thoroughly probed along with all the land allotments made by the APIIC during the YSR regime between 2004- 09,” Ravindra Reddy said on Wednesday.
Jagan’s camp has reacted strongly to the allegations. “One wonders why these leaders woke up only after YSR’s death.
It is nothing but the character assassination of a great leader. We welcome the CBI probe,” Rambabu told the media.
The APIIC board had an emergency meeting on Tuesday to discuss the alleged scandal and decided to order a detailed inquiry into it.
Back in August 2003, the APIIC had entered into an MoU with Emaar for the development of a residential-cum-commercial project-including a golf course, a convention centre and a five-star hotel-in Hyderabad.
The APIIC allotted 535 acres of land at Nanakramguda on the city outskirts to Emaar, of which 285 acres was sold at a rate of Rs 29 lakh per acre and the remaining given on lease for a period of 66 years at a nominal rate of two per cent of the total revenue made out of the golf course.
According to the original agreement, the APIIC would have 49 per cent stake in the leased land.
According to Ravindra Reddy, the YSR government in 2005 diluted the APIIC stake from 49 per cent to 26 per cent and later to a meagre four per cent.
“Going by the current market rate, the value of the land is around rS 10 crore per acre and the value for the government’s stake should be about Rs 2,500 crore,” he pointed out.
In the last five years, the company has not paid any amount to the state government towards its share, except Rs 9 crore during the project execution.
According to the agreement, it is supposed to pay Rs 12 lakh per annum to the APICC towards the lease amount.
“We have asked the company to submit the annual accounts and financial records,”APIIC chairman S. Sivarama Subrahmanyam said. The APIIC is planning to send a legal notice to Emaar for defrauding the corporation and government.