AP Govt Clears Decks For LuLu Project In Vizag

Visakhapatnam: After several turns and tribulations, Abu Dhabi-based LuLu Group has obtained State Cabinet nod for developing an international convention centre in Visakhapatnam, the main commercial and industrial hub of Andhra Pradesh after declaring its decision not to invest in any project in the State in 2019.

The trigger at that time was the decision to scrap the deal over allotment of nearly 14 acres at posh Harbour Park with beachfront view by the YSRCP Government in November, 2019, which had alleged undervaluation of the land value. The YSRCP Government had alleged that against a market value of Rs700 crore for the total parcel of APIIC land a private land acquired for the LuLu project, the land was allotted to the project proponent at the rate of Rs4 lakh per acre.

The project, for which MoU was signed in February 2018 envisaging an investment of Rs2,200 crore on an international convention centre with six lakh sft, two million sft multiplex and a five star deluxe hotel with an employment opportunity for 7,000 people, was revived after LuLu Group Chairman Yusfuf Ali and Executive Director Asraf Ali MD called on Chief Minister N Chandrababu Naidu in September 2024. The State Investment Promotion Board (SIPB) has cleared the revival of the project at its recent meeting chaired by Naidu. The change in government led to revival of the project, a senior official told Bizz Buzz.

However, there is no clarity yet on whether the project will come up at the site allotted by the TDP Government before YSRCP scrapped the deal or at an alternative site. The SIPB approved the project for an investment of Rs1,500 crore, which is less than the earlier plan. The land, which was allotted earlier, known locally as LuLu Land, was listed for auction through the NBCC during the erstwhile YSRCP rule for a reserve price of Rs107 crore per acre. It became a talking point in both Andhra Pradesh and Telangana as the reserve price for online auction per square yard at that time was stated to be the highest in both the Telugu-speaking States. A function hall owned by a local entrepreneur was acquired by the TDP Government at the behest of LuLu Group for having a beachside view under a swap deal by offering the land-loser six prime plots in the city with zero registration as a compensation.

“We never asked them to get out of the project. We had only objected to allotment of land at Harbour Park by resorting to undervaluation. We would have offered an alternative land of their choice elsewhere had they wanted,” Gudivada Amarnath, who served as Minister for Industries, Trade and Commerce under the YS Jagan Mohan Reddy-led Government, told Bizz Buzz.

Asked for his comments on the development, retired IAS officer and social activist EAS Sarma, said: “To allot any public land to a profit earning private company is illegal. To make such an allotment of land at a concessional price amounts to outright corruption. In my view, if LuLu gets any public land thus, it will be illegal and it will attract the penal provisions of the Prevention of Corruption Act. If, as in the past, Lulu is allotted any land within CRZ, it will constitute yet another statutory violation.”

He said: “the LuLu project does not serve the public interest. Instead, the government should focus on public projects that subserve the interests of the disadvantaged sections who constitute a sizable portion of the population. Public lands should invariably be used for public purposes.”