Faced with severe financial crunch, the YS Jagan Mohan Reddy government in Andhra Pradesh has put up prime lands in Visakhapatnam, the proposed executive capital of the state, for sale. As per a notification, the government hopes to raise at least ₹1,500 crore through the sale.
The notification for the sale of 18 land parcels, measuring around 14.7 acres in the port city, through e-auction was issued last week and the last date for submission of bids is April 22.
A prime property measuring 13.59 acres, located at Harbour Park on the Ramakrishna Puram beach road is the largest of these land parcels. The previous Telugu Desan Party government had leased it out to the United Arab Emirates-based infrastructure major Lulu Group for the development of an international convention centre, a five-star hotel and a multi-storeyed mall.
The Lulu Group promised an investment of ₹2,200 crore on the projects it claimed would also provide employment to over 7,000 locals.
However, the Jagan Mohan Reddy government terminated the project in October 2019, claiming it was not viable. Instead, it proposed multi-storeyed commercial plazas and residential complexes on the land. On February 8 this year, the CM approved NBCC and AP Industrial Infrastructure Corporation’s proposals for the project, expected to generate ₹1,450 crore.
“However, the proposal has now been dropped, since the government doesn’t have the money to take up the construction. So, it has been decided to sell the land outright and raise money for government schemes,” an official in the state secretariat, familiar with the development, said on condition of anonymity. Andhra Pradesh principal secretary (Finance) S S Rawat could not be reached for comments.
{{/usCountry}}“However, the proposal has now been dropped, since the government doesn’t have the money to take up the construction. So, it has been decided to sell the land outright and raise money for government schemes,” an official in the state secretariat, familiar with the development, said on condition of anonymity. Andhra Pradesh principal secretary (Finance) S S Rawat could not be reached for comments.
{{/usCountry}}The government is of the view that it will get more money through outright land sale, than by developing and leasing it. A base price of ₹1,452 crore has been set for the Harbour Park plot, which amounts to ₹106.80 crore per acre.
“The registration value of the land in the area is around ₹1 lakh square yard, which comes to around ₹48 crore per acre. Even if the market value is taken into consideration, it will be ₹2 lakh per square yard, which translates into around ₹96 crore per acre. So, the base price of ₹106.80 crore is on the higher side,” said O Naresh Kumar, director of AP Chambers of Commerce and Industry, Visakhapatnam.
He, however, said it could still be attractive to realtors due to its prime location. “The bid document itself projects a built-up area of 40 lakh square feet in the land. Even if each square foot of built-up area is sold for around ₹8,000, it would fetch ₹3,200 crore,” Kumar said.
Senior TDP leader from Visakhapatnam and former minister Bandaru Satyanarayana Murthy strongly opposed the sale of prime government lands in the city. “Jagan drove away the Lulu Group that proposed to develop the land on beach road and generate employment for hundreds of people. Now, he is selling the land to raise money to fund his vote-fetching schemes,” he said, adding that the TDP will move the court challenging the decision.
In October 2019, the Jagan government started Mission Build Andhra Pradesh, an initiative to promote infrastructure development and resource mobilisation in the state. The aim of the mission was to identify government lands not in use and sell them at market price.