The Andhra Pradesh government on Thursday responded to a statement put out by UAE-based Lulu Group, which said that it had decided to stop investing in the state, after land allotted to it in Visakhapatnam was revoked.
The Lulu Group had planned to develop a massive commercial complex in the coastal city, but its land allotment was pulled by the YSRCP government.
Speaking to reporters on Thursday, Minister for Industries Mekapati Goutham Reddy said that the project had been shelved mainly for two reasons.
"One problem was that there was a dispute on the land and the second problem was that it was against environmental norms. Moreover, standing guidelines are that a single bid should not be accepted," he said.
Stating the government had not received any valid document from the Lulu Group saying that they would not invest in the state, he said, "The cancellation of land by the government was not against the Lulu Group but the procedure that was followed by the previous Telugu Desam Party (TDP) government in the issue."
The UAE-based group had laid the foundation stone for the Rs 2,200-crore project in February last year and the company had promised to provide numerous jobs to locals.
However, the YSRCP after taking power found fault with the rental agreement, which was priced at Rs 7.09 crore per month. Goutham Reddy said that this amount was not feasible, as it would cost around Rs 50 crore in rent, according to the present market value.
"Moreover, the previous government had not adhered to environmental norms in leasing the land in the beach area. Lulu Company and previous government had signed an agreement one year ago. What had stopped them from starting construction all these months?" the minister asked.
Regarding new investments coming into the state, the Minister said, “We have allocated 120 acres of land to a bus company called Veera Vahan Udyog Private Limited. They are going to manufacture buses and their investment is about Rs 1,000 crore in the first phase."
Responding to media reports that the Reliance group, which was planning to set up a massive electronic manufacturing project, had also planned its exit from the state, Goutham said that this was not true. "We have asked them to come with a revised proposal as the land given to them by the previous government was in dispute," he clarified.