APIIC cancels land allotments to Navayuga group

By Durga Ramesh  Published on  21 Oct 2019 9:55 AM GMT
APIIC cancels land allotments to Navayuga group

Amaravathi: Andhra Pradesh Industrial Infrastructure Corporation (APIIC) has cancelled 4731.5 acres of land allotted to Krishnapatnam Infratech Private Limited (KIPL). The land was allotted for multi-product SEZ, to provide thousands of jobs to the local youth. On inspection, APIIC confirmed that even after 10 years of allotment no works have been done on the land.

APIIC allotted 4,731.5 acres of land to KIPL in 2009 and 2010. The land was allotted in two phases @ 1.15 lakh per acre, with the condition that the proposed SEZ should be made ready within two years. After four years, APIIC noticed that the company has not taken up even one per cent of work in the allotted land. So far, only a building, a school, and a private canteen were built in about 4 to 5 acres.

In its inspection, APIIC learned that KIPL had taken loans from different banks by mortgaging the allotted land. The infra company took Rs 1,935 crore as a loan by mortgaging 850 acres of land to ICICI Bank, Central Bank and Allahabad Bank. APIIC has to issue a ‘No Objection Certificate’ (NOC) to the banks if KIPL needs a loan for the allotted lands.

But how could KIPL secure such huge loans without the NOC from APIIC? There are allegations that the company somehow convinced the banks, to give the loans. The Industrial Finance Corporation of India (IFCI) stressed for the NOC when KPIL approached them for a loan amount of Rs 250 crore.

The promoter of KPIL is the Navayuga group, which has close ties with former Chief Minister Chandrababu Naidu. It undertook works of the Polavaram project. It was alleged that the APIIC had proposed to cancel the lands allotted to KIPL by the Telugu Desam government. The company could survive only because of its proximity to the previous Telugu Desam Party government.

APIIC has declared that it cancelled the land allotments to KPIL as it violated the norms of SEZ and for not starting any works in the land. It announced that it had to cancel the allotments, as the company had not responded to the notices issued earlier.

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