New Delhi: The Andhra Pradesh Industrial Infrastructure Corporation Ltd (APIIC) has defended its decision to allot, and not auction, more than 160 acres of land in Visakhapatnam’s Adavivaram and Mudasarlova villages to a subsidiary of the Adani group for its joint venture with Google: a $15 billion AI data center cluster.
The allotment of land in hills surrounding the Simhachalam temple is in public interest, APIIC told the Andhra Pradesh High Court in an affidavit filed last week. It argued that the proposed data centre cluster project is expected to bring in investments of more than Rs 87,000 crore to the state and create more than 200 jobs in the sector, besides generating employment for thousands in constructions and other allied fields.
The APIIC made this submission before a bench led by Chief Justice Lisa Gill, which was hearing a public interest litigation questioning the allotment of land for the project. The challenge is premised on two grounds. First, it argues that environmental clearance was not in deference to the rules; and second, that the land belongs to the temple and, therefore, cannot be allotted without the High Court’s permission.
The petitioner, a civil rights activist, has also claimed that the allotment was an arbitrary distribution of state resources, causing loss of revenue to the exchequer.
The APIIC is a registered public sector company. Its main function is to acquire land and develop it for industrial purposes. Its affidavit was limited to the question of whether the land could have been allotted without an auction or inviting bids.
On environment clearance and earmarking of temple land, the APIIC adopted affidavits filed before the High Court by respective ministries and submitted: “The temple is being developed in a highly comprehensive, sustainable and environmentally viable manner. Therefore, the public interest is fully protected.” Both state ministries, environment and temple endowment, have supported the project, denying any illegality.
The APIIC has argued that an auction or bidding process is not the only way to allot public land or resources. Instant monetary gain, it said, cannot be the sole criteria for any state policy on it, adding that other factors such as overall socio-economic impact of the project and industrial development of the state are the primary criteria behind land allotments.
To back this, APIIC contended that the Supreme Court has laid down this principle to say that a state can attract investments by providing incentives in case it is facing stiff competition from surrounding states. Factors such as the gigantic nature of the project and its impact on the economy are key to the decision-making process for allotting land, as has been done in the case of the proposed data center cluster project.
According to APIIC’s submission, the project is a “potential game changer” for the state’s Information Technology (IT) landscape, with significant implications for cloud computing, artificial intelligence (Al), and data-driven industries.
“It is expected to catalyze the growth of allied sectors, including cloud services, Al start-ups, data analytics, and digital innovation ecosystems and to enhance the State’s digital infrastructure readiness, and attracting future investments,” read the affidavit, detailing the swift government approval and subsequent land allotment for the 1000 MW data center.
Making of a data center cluster
The process to identify and allot land for the data center cluster project was undertaken after Raiden InfoTech India Pvt Ltd—a subsidiary of Google (Alphabet) incorporated in India as an operating vehicle for its hyperscale data center and AI infrastructure investments—submitted a Detailed Project Report (DPR) to the Andhra Pradesh government.
The State Investment Promotion Committee (SIPC), the State Investment Promotion Board (SIPB) and the Council of Ministers approved the proposal to set up the 1000 MW AI data center cluster across three different locations in Vizag.
Government orders, approving the allotment of land for the project through APIIC, were issued in February, 2026. On 6 April, the APIIC wrote to the Commissioner, Endowments department, requesting lease and advance possession of 160 acres of land in Adavivaram and Mudasarlova villages, as the property was part of Simhachalam Devasthanam.
The lease was for an initial period of 11 years, extendable up to 30 years.
Within two days, the Endowments department cleared the proposal at an annual rental of Rs 26,45,54,400 and with five percent escalation every five years. It was specifically directed that, to enable expeditious implementation of the country’s biggest FDI investment to date, advance possession of the land must be handed over.
Thereafter, according to the affidavit, Vizag Hyperscale Data Centre Park Ltd, which the affidavit describes as a “100 percent subsidiary of the M/s Adani Infra (India) Limited,” was asked to deposit one year’s annual lease rent so that it could get possession of the land.
Over the next two days, Vizag Hyperscale Data Centre Park Ltd remitted the lease rental amounts to APIIC, which, in turn, transferred the amount to Sri Varaha Lakshmi Narasimha Swamy Devastanam, Simhachalam, towards first-year lease rentals.
The affidavit clarified that the allotment letter clearly indicates the land’s ownership remains with the Endowments department.
“Visakhapatnam offers strategic advantages in terms of infrastructure, connectivity, and coastal climate, making it an ideal destination for data center investments and future technology clusters and it can be positioned and branded as ‘AI City Vizag’ and the proposed Adani-Google Data Center project could generate ‘a multiplier effect’ similar to the transformative impact Microsoft’s establishment had on Hyderabad’s technology ecosystem two decades ago, that could transform the entire economy of the State,” the affidavit maintains.
During a hearing of the matter last week, Justice Gill’s bench had asked the state to clarify whether the allotment was for 11 years, as claimed by it, or 30 years. The bench sought a specific response while referring to an allotment order, which said that the lease is for an initial period of 11 years, extendable up to 30 years. “The limit of 11 years is rendered quite perfunctory, because what you can then do is at the first instance, it (lease) is for 10 years or 11 years, extendable up to n number of years,” the bench remarked.
Petitioner’s counsel Virag Gupta contested the state’s claim that the lease was only for 11 years. He said there were documents to show that it was for 30 years. Gupta also contended that the temple land could not have been allotted without the court’s permission. The land, he argued, was illegally given to a foreign company against temple land rules which say it can only be given to Hindus. Gupta claimed that no lease deed was registered and that the land was given without auction and consideration.
(Edited by Amrtansh Arora)
Total sell out of public land. Naidu is a corrupt man. He did this last time round too.
All clocked in the name of my game changing development!!!