Glaring violations involved in Lulu convention centre agreement: Goutham Reddy

Amaravati: The Minister for Industries Mekapati Goutham Reddy stated that the state government found fault with the process of allocation of the land to the Lulu Group in Visakhapatnam and hence cancelled the project, reacting to a statement of the company, on Thursday, in a press conference at Secretariat. It is known that the state government has cancelled the 13 acr prime land allocated to the company in Visakhapatnam Municipal Corporation limits.

Reacting on the credibility of the statement of the company against the state government, he said that he suspected the source and authenticity of the press release.

He explained that there were glaring mistakes committed by the previous government while allocating the land to the Lulu Group.

First of all, the land itself was in legal dispute. Then APIIC Chairman clearly wrote a letter to the government that the land could not be allocated to the company as it was in legal dispute. A retired IAS officer filed a legal suit on the land and was pending in the High Court.

Pricing for rental was not done in a proper manner and Chief Minister YS Jagan Mohan Reddy government found it as unfair. It was priced at just Rs 7.09 cr per month but it would cost around Rs 50 cr. It is estimated that at least Rs 500 cr loss would be incurred to the government per annum, if the agreement be implemented as it is.

In addition to that, then TDP government awarded the project to the Lulu Group in a single bid auction, which was violating the CVC rules. No single bid auction shall be accepted in these kind of projects, Minister informed. Further, it violated the environmental laws also, he added.

He blamed that then Chief Minister N Chandrababu Naidu entered the Memorandum of Understanding with the company only for the sake of CII Summit held in Vizag.

On the other hand, the Lulu Group did not commence construction of the convention centre even after completing one year of allocation. The new government tried to contact them, but they did not respond properly, Goutham Reddy added.

Goutham Reddy explained that the chief minister is very harsh against the corruption and hence the state government has taken the decision to cancel the Lulu Group agreement. He further observed that the government found fault with the process of allocation of land and pricing of the rental, but not with the Lulu Group. He informed that the government is ready to welcome them again for investments in the state, again.

At the same time, he said that the APIIC is capable enough to build a world class infrastructure and government will undertake sustainable project in reverse bidding.