AP cancels concessions extended to Lepakshi Knowledge Hub

V. Rishi Kumar | | Updated on: Feb 17, 2014

The Andhra Pradesh Government has cancelled the concessions extended to Lepakshi Knowledge Hub Pvt Ltd, a special purpose vehicle of Indu Projects Ltd, which was to develop a large multi-use special industrial zone in the backward district of Ananatapur.

In a Government order issued by the State Industries and Commerce Department, the memorandum of understanding entered into with Lepakshi Knowledge Hub for extending concessions and incentives as per Industrial and Investment Promotion Policy 2005-10 has been cancelled along with the land allocation made to the promoters of the project.

The infrastructure project was to come up in Chilamattur and Gorantla mandals of Ananatapur district with an investment of Rs 10,000 crore over 10 years and employment potential of about 1,50,000 people, both direct and indirect. However, with more than four years having passed and not much progress on the project, the Government decided to cancel the allocations and concessions extended to the project developers.

The knowledge hub sought to develop an integrated infrastructure support to university clusters, science and technology parks, medical, civil aviation and aerospace parks, logistics hub and related infrastructure.

Following a performance audit by the Andhra Pradesh Industrial Infrastructure Corporation, it was concluded that not much progress has been achieved in terms of implementation of the project. The Government has contended that the developers of the project had in fact mortgaged the land and raised money without actually implementing the project.

The Government contended that the funds thus raised by the developer were diverted to Indu Projects Ltd. The loans were raised from Canara Bank, L&T Infrastructure Finance, Central Bank of India, Bank of India, IDBI Bank, Tata Capital, State bank of Hyderabad and Punjab National Bank.

Narasimha Murthy and Company, which was appointed to take up verification and progress of the project, had observed that though more than four years have passed, no major activities were carried out on the land allocated for the project.

The Comptroller and Auditor General of India too in its reports had made certain observations about the project and the deviations it made in its efforts to execute the project and even raising funds by mortgaging the land.

The CBI is also probing various issues related to the project as a part of the assets case against Kadapa MP YS Jagan Mohan Reddy.

Published on February 14, 2014
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