CAG report raps TSIIC over land allotment, delay in acquisition

The Comptroller and Auditor General of India has come down on Telangana State Industrial Infrastructure Corporation (TSIIC) for delay in acquisition of land for Hyderabad Pharma City (HPC) and National Investment and Manufacturing Zone (NIMZ) Zaheerabad projects.

It has also rapped TSIIC for not undertaking a periodical survey of its land and causing revenue loss by extending undue benefit to allottees in a few cases.

There was an inordinate delay of more than five and seven years in acquiring the land for HPC and NIMZ Zaheerabad projects respectively resulting in delay in achievement of expected investment and employment generation, the CAG said in a report for the year ended March 31, 2022.

Sharing results of a Compliance Audit, it said TSIIC availed loan of ₹725 crore from Housing and Urban Development Corporation (HUDCO) for land acquisition of NIMZ projects but diverted ₹317.49 crore for land acquisition in other projects, development of e-city, repayment of loan and operational requirements.

The audit observed that alienation orders of Telangana government were received in respect of 23,717 acres which included 19,669 acres of government land. The alienation proceedings were pending from 1974. The reasons for such long pendency were not found on record. Despite non-finalisation of alienation proceedings, TSIIC allotted lands to private parties and executed sale deeds based on the tentative market value of the land.

The TSIIC did not undertake a periodical survey of its 53,474 acres of land since its formation in 2014, the report said.

The CAG also sought to highlight how the State Industries and Commerce Department allotted 20 acres at Hardware Park, Mamidipally, to Adani Defense Systems and Technologies at a concessional rate of ₹40 lakh per acre against TSIIC’s prevailing land rate of ₹2.13 crore per acre, in deviation from the Cabinet Sub-Committee’s decisions thus extending undue benefit of ₹34.60 crore to the allottee.

The Consultative Committee on Electronic System Design & Manufacturing allotted 165.21 acres to 39 allottees though it was not competent to do so thereby extended undue benefit of ₹208.24 crore.

The report also found fault with the allotment of 511 acres by TSIIC to Vem Technologies against the actual requirement of 49 acres, as evaluated by the TSIIC’s technical consultant, at a concessional rate in contravention of the Land Allotment Policy and guidelines of NIMZ. This resulted in revenue loss to TSIIC and extension of undue benefit to the allottee to the tune of ₹106.91 crore.

The CAG report said the State government may take appropriate steps to speed up acquisition of land for industrial parks; ensure early completion/upgradation of the infrastructure projects by TSIIC; and complete the process for alienation of government lands in possession of TSIIC. Underscoring the need for Industries and Commerce Department and TSIIC to abide by the Cabinet Sub-Committee’s decisions and the Allotment Regulations regarding provision of concessional allotments and infrastructure facilities, the CAG wanted incorporation of suitable clauses by TSIIC in the sale deeds to provide for the resumption of premises in the event of non-implementation of the projects by the allottees.

The report also flagged allotment of land to Amazon Data Services India at HPC. The audit observed that allotment of land in HPC for establishment of a data centre was a deviation from the purpose for which the Pharma City was proposed. The target of generation of direct employment for 1.66 lakh people at HPC was also jeopardised since employment potential of a data centre was very minimal, the CAG report said.