The decision of LuLu group chairman M.A. Yusuff Ali to go ahead with the Bolgatty project may bring the uncertainty surrounding the venture to an end but the controversy it has stoked is likely to linger a little longer.
The land deal between the Cochin Port Trust (CPT) and the LuLu group has raised apprehensions of undervaluation of the prime property which was leased out to the group on a 30-year renewable lease and possible breach of contract in the proposal to construct 572 “'service” apartments.
Though the Mulavukad panchayat still has not approved the deal, Mr. Ali said that its members and the local legislator did not raise any objection when the project was explained to them.
Asked whether the apartments to be constructed as part of the project were residential units and not part of the convention centre and hotel, Mr. Ali reiterated these were only “service apartments” and “essentially an extension of the hotel”. He said the misunderstanding arose because the term “service apartment” was not present in the Kerala Building Code.
But according to the plan submitted by the LuLu group to Mulavukad panchayat, obtained by The Hindu under the RTI Act, the apartment complex is to be built on 73,500 sqm and the hotel on just 36,930 sqm. Also, unlike, say, the Grand Hyatt in Mumbai, here the “service” apartments are not part of the hotel. In the concept map submitted for permission, the apartment complex is situated away from the hotel as a separate entity.
Mr. Ali said he was “not a real estate dealer” and in any case, “nobody would come forward to buy a flat or apartment constructed on land that is taken for a 30-year lease period”, adding that the apartments were intended for families who came to attend conventions or meetings and for short stays for people who could not afford the five-star hotel during such events.
But the lease, according to the deed, is not for just 30 years. It is a renewable lease which doesn’t stipulate the number of renewals.
It also has a provision for sub-lease to third parties. The LuLu group can sublease the land and all that it builds to third parties. The CPT is bound by the deed to approve of such sublease even if itis unauthorised. The documents obtained under the RTI Act by The Hindu had revealed that the LuLu group had sought permission to construct 426 dwelling units under the residential category. Though the group had mentioned the term “service apartments” in brackets in the application form submitted to the panchayat, it had sought permission for multi-family residential units under the category, “Residential Group A1”.
The CPT had refused permission to use the land for residential purposes and had valued the land at Rs 2.1 crore per acre or Rs 2.1 lakh per cent because it was not to be used for residential purposes. The market value of land in the area is about Rs 20 crore per acre or Rs 20 lakh per cent.
Unlike the apartment complex, the LuLu group had clearly sought permission for the hotel and the convention centre under a different category, “Non-residential/others”, in the same application form last year. This suggested the “'service” apartments were not part of the hotel and that they were under two completely different categories. The Kerala State Pollution Control Board too had accorded permission for 624 apartments after terming the units as just apartments without the prefix, “service”.
Mr. Ali said, “I have been paying Rs.3 crore annually for the last three years as rent to the CPT and I have acted as per the law of the land only.” The annual lease rent of the property is Rs 1.05 lakh and the upfront payment is Rs 71.3 crore.
Incidentally, several trade unions, social organisations and environmentalists had called for the cancellation of the lease deed. Defying the stand of the CPI (M) State secretary Pinarayi Vijayan that the party would not hold any agitation on the Bolgatty land deal, CITU leader M.M. Lawrence, who is also a State committee member of the party, had demanded the annulment of the deed and stated that the trade unions would go ahead with the agitation.
