The State-owned Tamil Nadu Industrial Development Corporation Limited (TIDCO), which has, over the past two decades, acquired and transferred large tracts of government and patta lands to big corporates for mega projects, caused a loss of several crores, due to lack of diligence, the government auditor has found.
In one instance, land assets to the tune of Rs.67.57 crore were lost because of TIDCO’s lack of control in the development of Mahindra World City Project off Chennai, according to a performance audit by the Comptroller and Auditor General (CAG).
The audit report for the period between 2007 and 2012, tabled in the State Assembly recently, made scathing observations over two completed SEZ (special economic zone) projects of TIDCO - the Mahindra World City project in Chengalpet district, just off Chennai city limits, and the AMRL High Tech Industrial Park in Nanguneri in Tirunelveli district.
In the case of the Mahindra World City Project, the government had approved its setup on an 841-acre spread of land. The SEZ became operational in September 2006, and, subsequently, a joint venture company obtained the permission of the Board of Approval of SEZ, Government of India for development of non-processing area. As a result, the company transferred 242 acres of land to two co-developers.
One of them, Mahindra Gesco, completed a residential project in a 21.5 acre of land in July 2007.
When TIDCO, a co-promoter of the project, did not have any details regarding the venture, the CAG independently verified the land deals and concluded that SEZ rules were violated in the transfer of lands. Vacant lands were transferred to individuals on a “perpetual basis”. In 10 of the 103 cases, land with constructed villas and semi-bungalows were leased out to individuals on a “perpetual lease basis”.
In the case of Nanguneri AMRL SEZ, TIDCO had once again granted undue favours to the joint venture partners in the project. The project is backed by INFAC Management Corporation, USA which approached TIDCO for the project and entered into a MoU in May 1997, to acquire 2,107 acres of land - it included 1,533 acres of patta land at a cost of Rs. 2.82 core and 574 acres of government land at cost of Rs. 0.83 crore.
TIDCO had entered into a share-holder’s agreement with INFAC to form the joint venture company ATMAC in May 2000. The project became operational in March 2010.
CAG noted that TIDCO transferred the land to the JV partner in 2008 but it collected the price of land applicable for the years 1998-2001, allowing undue benefit of Rs.106.61 crore to the JV company.
The audit report also said during the audit period from 2007 to 2012, TIDCO had participated in 12 SEZ projects but had completed just four of them. Two of the completed projects did not even have basic infrastructure support like power and water supply.