Undue benefits worth Rs. 1,784 crore were given to various entities and persons, a CAG report reveals.
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 pointed out several irregularities relating to the allotment of land by the state government.
The CAG had conducted a performance audit of land allotments made by the state government during the 5-year period from 2006 to 2011.
In 2006-11, the state government had 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.
"The 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 report further said that the rates proposed at different established levels of the government hierarchy were disregarded, and substantial benefits were unduly granted to private parties.
The audit also revealed that in the test-checked cases, undue benefits worth Rs. 1,784 crore were 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 was found to have "ignored the prescribed procedures and disregarded canons of financial propriety".
Listing out the specific cases, the CAG said that 3,115.64 acres of land in Jammalamadugu mandal of Kadapa district was allotted to Brahmani Industries Limited, for the setting-up of a commercial airport and a Flying Academy, in violation of the GOI's policy on setting up of commercial airports, and without verifying the suitability of the site and viability of the project.
This allotment had 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 an 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 not 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 Obulapuram Mining Company, which had unauthorisedly occupied government land, for grant of lease of 413.81 acres of land, 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 the APIIC, recommended the alienation of 304.66 acres of land to APIIC (for transfer to OMC) for the establishment of an industrial park. The reasons for reconsidering the lease or alienating the land were not recorded.
The government lost revenue of Rs. 874.03 crore by alienating 881.32 acres in Mamidipally village in 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 the alienation of land, lacked legitimacy and transparency, the report said.
As the terms of the 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", said the report.
The report also spoke about APIIC enterinh 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 the government to financial risk.
The state government had also 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, as against the prevailing market value of Rs. 18 lakh per acre.
This act gave the institute an undue benefit of Rs. 41.25 crore. In fact, GIT is yet to pay the cost of the land.
The government had 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, the report observed.
Revenue of Rs. 72.07 crore and Rs. 39.60 crore, respectively, were forgone by the government, through an allotment of land in Chillakur mandal of SPS Nellore district (through APIIC) at "very low rates". This was purportedly for the establishment of an industrial park by Simhapuri Energy Pvt. Ltd. / Vikas Power Ltd., and for the setting-up of 2 power projects by Simhapuri Energy Pvt. Ltd. / Meenakshi Energy Pvt. Ltd.
The report also said that the Anantapur District Collector had accepted an amount of Rs. 0.63 crore in respect of an application for an additional 50.69 acres of land by BIOL, instead of taking action for the unauthorised occupation of 20.06 acres by Bellary Iron Ore Ltd.
He had also disbursed awards to the assignees for the resumed land, even before the government gave its approval.
In 60 cases, the alienation cost amounting 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 allotted over 34,000 acres of land to/through APIIC for industrial development in the state during 2006-11. However, as the CAG report obserbed, APIIC could not provide the required thrust towards targeted industrialisation of the state despite thousands of acres of land being alienated to it by the government.
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, the report said.
As APIIC allowed private developers to utilize government land for furthering their real estate business, the envisaged purpose of developing IT infrastructure and generating employment were defeated. APIIC did not safeguard the government's interest in permitting these private firms to mortgage/sell government land, thus exposing government to financial risk.
Further, 11 SEZs / IT parks had not generated the expected employment. As against the total contemplated employment of 5.93 lakh jobs, 4 SEZs had generated zero employment opportunities, and 7 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 that for the establishment of a "Health City" in Visakhapatnam, the APIIC had allotted plots to 10 hospitals, asking them to complete the projects within 2 years. It also asked them to extend free treatment to 10% 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 during the test-check of records.
The CAG has also accused the state government of being a mute spectator to the 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 a meagre revenue of Rs 63.71 crore," it said. (INN)