The Andhra Pradesh Government has cancelled the memorandum of understanding inked with Brahmani Industries Ltd, a company promoted by Mr Gali Janardhan Reddy, for setting up a steel plant.

Mr Reddy, former tourism minister in the Karnataka Government, is now facing probe by the CBI in the mining leases cases in Andhra Pradesh and Karnataka.

Brahmani Industries had inked an agreement in 2007 during Y.S. Rajasekhara Reddy’s tenure as Chief Minister. The company had proposed to establish a greenfield integrated steel plant in Jammalamadugu of Kadapa district of the State along with related infrastructure including an airport.

In a Government Order issued late on Thursday by the Industries Department, the State terminated various incentives and concessions granted as a part of the Government’s industrial policy.

The State has also cancelled the allotment of about 15,000 acres allocated to the company for the project execution.

The company had proposed a multi-phase steel project and was allocated water from Gandikota reservoir. Mr Janardhan Reddy’s company had proposed a 10 million tonne capacity project to be executed by 2017.

The Brahmani’s steel project proposal was approved as Mr Janardhan Reddy’s firm Obulapuram Mining Company, now under CBI probe, already had an iron ore mining leases under its belt.

According to the Government, Brahmani had pledged the land allocated to the company with Axis Bank seeking loan.

The Government has decided to cancel the agreement as the company failed to execute the project within three years of signing the MoU.

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