After Singapore Consortium, UAE's LuLu Group Says No To Andhra Investment

LuLu Group officials also said they had planned to invest Rs 2,200 crore and provide jobs to 7,000 locals. The company has insisted they participated in a transparent bidding process

After Singapore Consortium, UAE's LuLu Group Says No To Andhra Investment

LuLu Group's decision to withdraw comes after a Singapore consortium backed out of the Amaravati project

Hyderabad:

A UAE-based conglomerate has decided not to invest in any new projects in Andhra Pradesh. The LuLu Group International announced its decision after Chief Minister Jagan Mohan Reddy cancelled allocation of 13.83 acres of land in Visakhapatnam. The ruling YSR Congress has claimed the TDP gave the land on lease at prices far below market rates when it was in power. The company will, however, continue to invest in other states, including neighbouring Telangana and Tamil Nadu, as well as Uttar Pradesh, Kerala and Gujarat.

The land was meant for the development of an international convention centre, a shopping mall and a five-star hotel at Harbour Park on the Vizag Beach Road. TDP chief Chandrababu Naidu laid the foundation stone for the convention centre in February last year, in the presence of former Union Ministers Suresh Prabhu and Ashok Gajapathiraju, as well as LuLu Group Chairperson Yusuf Ali.

"Given the current scenario, we have decided not to invest in any new projects in Andhra Pradesh," a statement said. The company also claimed it had incurred massive expenditure on initial developments and appointing international consultants and architects.

LuLu Group officials also said they had planned to invest Rs 2,200 crore and provide jobs to 7,000 locals. The company has insisted they participated in a transparent bidding process.

However, Industries Minister Gautam Reddy has countered, saying there were two reasons why the allotment was cancelled, one of which was a non-transparent bidding process.

"One, bidding was done in a non-transparent manner. There was only one bidder... which is not acceptable. Two, the (previous) Andhra government agreed a rental of around Rs 7.08 crore, whereas such prime land will fetch up to Rs 50 crore. This is loss of revenue to the state," he said.

"We went after a policy which was non-transparent and had malafide intentions. (The) Chief Minister has said contracts that harm the interest of the people need to be cancelled," he added.

Either way, the LuLu Group's announcement is the second of its kind this month.

Last week a Singapore consortium, comprising Ascendas Singbridge and Sembcorp Development, backed out of the Amaravati project after the Andhra government said they had decided not to proceed due to other priorities for the state.

Several other prestigious contracts, including the Polavaram irrigation project given to Navayuga, have also been reversed or cancelled in recent months.

The YSR Congress government has also said it wants to renegotiate power prices with private producers; the centre has indicated this is a bad idea and has asked the government to halt such proceedings.

However, the decision to cancel award of land to the LuLu Group has received support from unexpected quarters; Andhra BJP chief Kanna Lakshmi Narayana wrote to the Chief Minister to welcome the move. He called it "one of the most corrupt and reckless decisions" by the previous government that was led by Chandrababu Naidu.

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