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Row over lease of GVMC land
The state government has given orders to handover one of the super prime lands in the heart of the city to a private party to develop a multiplex and star hotel. The Greater Visakhapatnam Municipal Corporation (GVMC) is having 2.70 acres of land near RTC Complex opposite Sampath Vinayaka temple in the city.
Visakhapatnam: The state government has given orders to handover one of the super prime lands in the heart of the city to a private party to develop a multiplex and star hotel. The Greater Visakhapatnam Municipal Corporation (GVMC) is having 2.70 acres of land near RTC Complex opposite Sampath Vinayaka temple in the city.
Highlights:
- Andhra Pradesh Tourism Development Corporation sent a proposal to the government for development of Family Entertainment Centre in the GVMC’s prime land in 2.70 acres under the land lease-cum-development mode with the SPI Cinemas Private Limited as developer
- “To allot such a valuable public land located in the heart of the city to a private party at an unreasonably low lease rental for setting up of a star hotel and cinema hall is objectionable and against the public interest,” says former IAS officer EAS Sarma
During the first (2015) CII Partnership Summit, SPI Cinemas had signed an MoU with the tourism department to develop a multiplex and 150 room capacity star hotel in the name of Family Entertainment Centre (FEC).
The Andhra Pradesh Tourism Development Corporation sent a proposal to the government for development of FEC in the GVMC’s prime land in 2.70 acres under the land lease-cum-development mode with the SPI Cinemas Private Limited as developer.
Supporting the Tourism Development Corporation proposal, the GVMC also informed the government that the project was approved. On the move, the government released orders permitting the Commissioner of GVMC to take necessary action to kick-start the project.
The government said in the orders that the annual land lease rent is Rs 4.284 crore for the first year and the rent would be enhanced five per cent against the enhanced lease rent year on year and the lease agreement is for 33 years.
The land belongs to GVMC should be used only for public purposes beneficial to the people of the city, especially the marginalised sections who constitute more than a third of the population and who are presently living in sub-human conditions.
To allot such a valuable public land located in the heart of the city to a private party at an unreasonably low lease rental for setting up of a star hotel and cinema hall is objectionable and against the public interest,” former IAS officer EAS Sarma said.
In a letter to R Karikal Valaven, Principal Secretary, Municipal Administration and Urban Development and Mukesh Kumar Meena, Secretary AP Tourism Department, EAS Sarma said that the market value of the land in question is in excess of Rs 50,000 per square yard. The value of 2.7 acres on that basis works out to more than Rs 65.34 crores.
According to government orders in 2012 14, the annual lease rental should not be less than 10 per cent of the market value or Rs 6.534 crore per year, whereas the lease rental concluded works out to Rs 4.284 crore. In other words, this amounts to an annual loss of Rs 2.25 crore which is unacceptable, Sarma explained.
Since, the lease is for 33 years, the total loss works out to be more than Rs 74.25 crore, even after taking into account the escalation in lease rental, as land value, too, is spiralling upwards steeply in the city, at rates far exceeding five per cent. It is distressing that the state government has not disclosed the details of the tender process, the basis of tender evaluation and the terms of the lease and it looks as though the land is being allotted in a highly secretive manner that creates scope for malfeasance, Sarma alleged.
