VIJAYAWADA: The Comptroller and Auditor General (CAG)'s report contains a damning observation on undue favours shown by the Vijayawada-Guntur-Tenali-Mangalagiri Urban Development Authority ( VGTM-UDA) to a firm owned by CC Reddy, a close relative of late CM YSR. Incidentally, CC Reddy was agricultural advisor to the YSR government enjoying cabinet rank.
The CAG pointed out that private firm Arihant Indo-African Infra Developer and Builders was handed over nearly 22 acres of land near Vijayawada despite it having failed to implement the project which was originally proposed by the urban development authority.
While the 22-acre plot was given away in exchange of Rs 41.80 crore, the actual market value of the property was much above the amount paid by CC Reddy's firm.
Curiously, land rates were calculated based on 2007 prices while the transfer was effected in 2010, by which time land prices had gone up several times. According to the going rates for 2010, each acre of land in the area cost around Rs 4-6 crore. Giving away 22 acres of land for Rs 42 crore thus resulted in a loss of not less than Rs 80 crore to the exchequer.
According to the CAG report, which was tabled in the Assembly on Thursday, UDA invited bids for development of a township called Singapore Township on 53 acres of land near Mangalagiri. Arihant developers won the contract after quoting Rs 97.52 crore. Land was handed over to the contractor in 2007 and it was then CM YSR who laid the foundation stone for the project. As per the tender agreement, the project is to be completed in three years. However, after paying Rs 42 crore in two instalments towards minimum guarantee sums (MGS), the company withdrew from the project citing the global economic downturn.
"The company did not even launch the work till expiry of the term. In such a scenario, UDA should have terminated the contract by forfeiting the amounts deposited by the company," the CAG observed.
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