When a state government invites a foreign company for investing in development projects, it does so in non-developed areas. But Chandrababu Naidu gave Lulu, a UAE-based corporation, land of worth Rs.905 crores in Vizag. This comes with additional concessions and financial aid from the state treasury. Why would any government take such risk and put financial strain on already stretched exchequer? The answer is kickbacks. If you want to know who is 420 in AP, all you have to do is look at the decisions Naidu has taken from 2014 to 2019.
The LuLu group was just the tip of the iceberg as the former CM Chandrababu Naidu had done many similar things just to get kickbacks from such projects. No doubt such steps only took the state back several years. Lopsided development work doesn’twork out in the end. The TDP miserably lost the 2019 election and the reasons were obvious.
How LuLu Was Allocated Land in Vizag
LuLu is a UAE based corporation and specializes in the field of hospitality. Its investment could have given boost to some less developed area in the state. But the TDP government gave them land in Vizag, which is afast-developing city with great potential. The company had offered to build 5-star hotel, shopping mall and convention hall in Visakhapatnam or Vizag.
Not only was LuLu given prime land, the Naidu govt also gave them heavy concessions to build the projects. To give the land to LuLu group, the Naidu govt snatched it away from the CMR group. Additionally, the govt even took care of the cost of registration, capital gains, stamp duty and other things. All themoney came from the state treasury. This put a massive financial burden of Rs.171.27 crore onthe exchequer. Who is 420 in AP can be guessed easily when you know that ex CM Naidu was personally involved in it. He even eoverruled the objections of LawDepartment, vice-chairman of Vizag developmentauthority and the Visakhapatnam collector.
Naidu made a lot of adjustment just to keep the LuLu group happy. Was this for the state or for his own benefits? No doubt, the ex CM did get some kickbacks from it as it was clear that he went out of his way to keep LuLu in the state.
Why Lulu Enjoyed Special Favors
The TDP govt went out of its way to make LuLucomfortable in the state. First, it was given prime land in Vizag at a very low cost. Chandrababu Naidu handed over 12.52 acres of prime land on the RK Beach to the LuLu Group at a very low cost of Rs. 50 lakhs peracre. Originally, the land belonged to the AP IndustrialInfrastructure Corporation (APIIC) and was of Rs. 905crore worth.
Lulu got the land at an annual lease of Rs. 4.51 crore. It was a lease cum development basis agreement. In addition to this, the govt also handed over 3.40 acres of land that was originally assigned to the CMR Group, to Lulu. The CMR Group was compensated with allocation of 4.85 acres ofother government land.
All this while, Chandrababu Naidu was involved personally in this whole transaction. He was the CM and he had enough time to see through the deal as his personal interest were in stack. No doubt that when people search “who is 420 in AP” his name crops up.
Excessive Financial Burden
One of the highlights of Naidu’s career in the new AP was making the state even more financially weak than ever. The whole transaction with the LuLuhad put a strain of Rs.171 Crore Burden on the Exchequer. The District Collector of Vizag even clarified that the 3.40 acres of land was worth Rs. 246.84 crore. The land given to CMR group as a compensation was worth Rs. 321crores.
The VUDA, the Department of Roads and Buildingsand Greater Visakhapatnam Municipal Corporation hadcollectively decided to get the land registered in the name of CMR group.What’s more, the TDP govt paid a whopping Rs. 64.20 crore capital gains tax. In addition to that, it bore the cost of the registration and stamp duty worth Rs. 24.07 crore. There were more related costs and when you add the up, the state treasury had to bear the financial burden of Rs.171.27 crore due to this deal.
Of course, the kickbacks the Naidu and his party people got were the powerful reason why he allowed this to happen. Now anyone can see who is 420 in AP clearly.
It was clear from the start that Naidu had vested interest in the project and he was willing to go to any length to make it work. The LuLu Group had proposed to build a five-star hotel, mega convention centre and shopping mall on the given land. Naidu himself visited the convention centre built by the Lulu groupin Kochi. He was personal involved in it and had decided to give an additional 3.40 acres of land to the project. The land was taken from the CMR group to accommodate the needs of LuLu project.
All this transaction of land and money put a great burden on the state treasury. Chandrababu Naidu went out on a limb to ensure that the LuLu group were given all the help it needed. Why would a state govt help a large corporation? The answer is loud and clear.
The nexus between the LuLu group and Chandrababu Naidu is out in the open. LuLu enjoyed the low cost, while the Chandrababu Naidu got the kickback. Meanwhile, the state bore all the financial burden. Who is 420 in AP? You can decide now.
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