AP revises land deal with IMGB

Seeks to collect Rs 2 cr per acre instead of mere Rs 50,000 per acre fixed by Naidu govt

In the first-ever reversal of a major decision taken by the previous Telugu Desam regime, the state government yesterday decided to revise the MoU entered with International Management Group Academies Bharata (IMGB) on land allotment for the proposed Rs 700 crore athletic training, education, leisure and resort complex project in the city.

The 'group of ministers' (GoM) headed by state finance minister K Rosaiah, which was constituted to review all the decisions taken after January 2003 by the Naidu government, yesterday decided to collect the market value for the land allotted to the subsidiary of International Management Group Academies East (IMGE).

The Naidu government allotted 400 acres of land in the prime Gachi Bowli area to IMGB for the first phase of the project on a very nominal price of Rs 50,000 per acre, whereas the market value of the land was estimated to be around Rs 2 crore per acre. This means that the cost of the land allotted in the first phase would approximately work out to a whopping Rs 800 crore.

According to reliable sources, the group of ministers, which took a strong view on the Naidu's last minute decision, felt that in case the company was not in a position to pay the cash towards the land cost as per the market value, the government would be ready to convert the cost into equity in the project.

"The choice would be given to the project promoters," a senior official who was involved with the process told Business Standard.

Sources said that the GoM also took a view to be a little flexible in providing some marginal concession on the actual land cost if the need arises.

The ministers decided to apply same norms to the remaining 450 acres of land proposed to be acquired for the second phase project by the company. The total cost of land would then be more than Rs 1,500 crore.

It may be recalled that the newly formed Indian subsidiary of IMGE has proposed to develop, in two phases, a world class facility for sports and leisure activities, in the vicinity of the newly constructed stadia complex which hosted the last National games.

The first phase would include the state-of-the-art academies for sports and education and the second phase is meant for a theme park.

The cost of setting up the sports, recreation and education facilities at Gachi Bowli would be around Rs 500 crore.

In the second phase, IMGB would be setting up a theme park, a golf course and infrastructure for leisure, lifestyle and entertainment facilities in 450 acres near the proposed international airport at Shamshahad at a cost of Rs 200 crore.