Consequent to the developments in Satyam, the Andhra Pradesh government is likely to withdraw the land allotted to the company in Visakhapatnam.
In December, the government had agreed to allot 50 acres in Kapulauppada village on the Visakhapatnam-Bhimili beach road following a Cabinet approval. The allotment was in lieu of a land earmarked for the company some four years ago for setting up an IT park. However, the title of the land has not been transferred yet. "In view of the present situation, we are planning to cancel the land allotted to the company,'' said a senior government official.
Former Union economic affairs secretary EAS Sarma, who is also the convenor of the Forum for Better Visakha, an NGO, had accused the government of giving away the land, estimated to be worth Rs 300 crore, for Rs 1 crore. Refuting the charges, the senior official said, "The land was allotted in view of the employment potential in the IT sector and due procedures were followed."
According to Vizag-based Aruna Constructions and Developers Managing Partner BRK Raju, the land on the beach road is currently valued at Rs 1-1.25 crore an acre. During the boom time, it had touched Rs 2 crore.
Government officials confirmed that Satyam paid Rs 5 crore for the 50-acre plot. When contacted by Business Standard, state Information Technology and Communications (IT and C) secretary Ajay Mishra said, "There will always be a difference in valuation for the lands as they are not auctioned."
According to the state IT policy, an IT company is expected to create 150-200 jobs an acre if it seeks land from the government at a concessional price in Tier-II cities. For Tier-I cities, this is 500 jobs per acre. Once the land is categorised for an IT company, it would be eligible for a preferential rate for power and the registration costs would also be reimbursed.
Industries Principal Secretary B Sam Bob said it was inevitable for the government to offer land at concessional rates to attract industries. "Satyam till yesterday, was a preferred company and nothing was more heartening than having it to come forward to start centres in Tier-II cities," he said.
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The state government had also allotted about 6.5 acres to Satyam in Visakhapatnam city at Rs 50 lakh/acre in 2004-05 for its BPO operations, which started in 2008. At that time, the land was valued at Rs 3 crore per acre. Apart from Satyam, the government extended similar benefits to IT majors Wipro and TCS. Wipro is likely to start its operations soon on its 6.5-acre campus.
On Sarma's other charges
Hyderabad Metro: The official said the project followed global tenders. Five consortia, with at least one member having experience in the field, were pre-qualified. All the five qualified for the technical bids and four participated in the financial bids. On Sunday, Chief Minister YS Rajasekhara Reddy had said all projects related to Maytas were being reviewed and appropriate action would be taken after the state chief secretary submits his report.
Bypassing bidding procedures: The official said the government gave only one project through nomination, which is a Rs 120-crore highway project connecting Kadapa and Anantapur. According to him, Maytas is already doing the Gandikota irrigation project in Kadapa. Once this project is completed, water would be impounded from the project and would submerge the existing highway. The other option was not filling the reservoir to capacity. To avoid this, the government decided to lay a new highway. "Bidding and other processes would have taken a lot of time. In view of the urgency of the project, it was awarded to Maytas as it already had its men and machine in place,'' he said. The company agreed to do the project for less than at par value.
Anrak Aluminium and Jindal projects: The government allotted about 960 acres to JSW Alumina at S Kote area in Vizianagaram district. Of this, about 130 acres is government land, for which JSW paid Rs 2 lakh per acre. About 830 acres is assigned land, for which JSW paid Rs 2 lakh/acre to land occupants and Rs 75,000/acre to the state government. JSW also offered about Rs 2 lakh worth of company shares on each acre of land taken and promised a job to the family losing land or Rs 3.5 lakh financial assistance. JSW purchased about 150-acre private land from local farmers by paying Rs 5-6 lakh an acre. According to the official, the state government first invited National Aluminium Company to set up an extraction plant in the state. With no response from Nalco, the state government had to look for private companies, which promised to invest about Rs 3,000 crore in each plant and create direct employment for over 2,000 people at each plant.
The official said he was not aware of any letter from Sarma on Satyam issue.