Gujarat govt says no money spent on GIFT City project

Brushing aside the Congress' allegation, Gujarat government has said that it did not spend money on the GIFT City project in the state except the equity of Rs 32.5 crore.

Earlier, Congress president Rahul Gandhi had alleged that in 2007 when Prime Minister Narendra Modi was the Chief Minister of Gujarat, debt-ridden Infrastructure Leasing & Financial Services Limited's (IL&FS) group was given the "GIFT City project worth Rs 70,000 crore".

He also alleged that now in 2018, Prime Minister Modi is letting the firm get a bailout from the Rs 91,000 crore default, using funds from the State Bank of India (SBI) and Life Insurance Company (LIC).

Rejecting these allegations, the Gujarat government, in a statement, clarified: "The state government envisaged the GIFT City in 2006-07 wherein several financial companies were invited to express their interest in the same. At the end, IL&FS was chosen as a Joint Venture partner with a wholly owned company of Government of Gujarat i.e. Gujarat Urban Development Corporation (GUDC) on a 50:50 basis. The IL&FS was one of the best companies available in the infrastructure finance space with a good track record behind them. It was a widely held company in which single largest majority holding was also owned by Government of India entities such as LIC, SBI etc."

The state government further said that it is baseless to say that Rs 70,000 crore worth of project (GIFT City) has been handed-over to IL&FS, adding, "in all the phases of GIFT City development, only Rs 10,000 crore is projected to be spent on entire infrastructure development."

"Not even a rupee in this project was invested by Government of Gujarat except the equity of Rs. 32.5 crore. The amount of Rs. 60,000 crore was envisaged to be brought in/invested by various private companies which would be located in GIFT City project in the coming period of 15-20 years," the statement further read.

"The GIFT City Company (GIFTCL) was incorporated on June 21, 2007 in which, both IL&FS and GUDC contributed 50:50 equity of Rs 32.50 crore each in the JV and a government land of 662 acres was given by Government of Gujarat to GIFTCL and GIFT SEZ with the conditions that the entire development of infrastructure in the GIFT city will be done by the company out of the proceeds of the development rights sold in the city to private developers," it added.

"To say that there is any fraud committed in this project by Government of Gujarat is completely malicious and far away from the truth," the statement concluded.

This comes after the National Company Law Tribunal (NCLT) permitted a six-member panel comprising government-nominated individuals to supersede the IL&FSboard.