AP Govt to withdraw land from Lepakshi Knowledge Hub

Cancellation happeningdue to violation of terms and memorandum of understanding

Andhra Pradesh government has decided to cancel the allotment of 8,848 acres of land made in favour of Lepakshi Knowledge Hub (LKH), which had proposed to set up multi-sector industrial park project in Anantapur district bordering Karnataka.

"Chief minister N Kiran Kumar Reddy today directed the AP Industrial Infrastructure Corporation(APIIC) to initiate action for cancellation process with regard to allotment of land to Lepakhshi for violation of terms of memorandum of understanding," chief minister's office said on Saturday.

In February 2009 LKH had entered an MoU with AP's industry department for setting up a global knowledge hub by providing integrated infrastructure support to a range of activities including education clusters, science and technology parks, medical, aviation and aerospace and IT parks among other things.

According to the MoU, the company and the units were to invest between Rs 8,000 crore to Rs 10,000 crore with a promise to create jobs to 150,000 people in a span of 5-10 years. APIIC had made available the entire land, mostly acquired from local farmers, to the company for this purpose.

Indu group, the promoter of the project is a Hyderabad-based real estate player and has already been under CBI scanner for its investments into the firms of  Kadapa member of Parliament, Y S Jagan Mohan Reddy, who is being investigated for alleged quid pro quo deals involving government decisions such as these when his father, Y S Rajasekhara Reddy, was the chief minister.

Earlier in March this year, the Comptroller and Auditor General (CAG) slammed both the state government and the project developer for alleged violations in land allotment as well as its utilisation. CAG maintained that the APIIC had irregularly executed a sale deed for 8,844 acres of land in Anantapur district in favour of LKH even before creation of infrastructure by the developer.

Besides this, LKH did not establish any industry nor create any employment, but had mortgaged 4,397 acres of allotted land for obtaining loans to the tune of Rs 790 crore from different banks, the auditor said.