Hyderabad: After nearly 18 years of incessant battle with the courts and third parties, including bankers, the Andhra Pradesh revenue authorities have officially reclaimed around 14,000 acres of land in Jammalamadugu mandal of Kadapa district from a private company after it failed to build a steel plant and airport there—the purpose for which it was allotted.
The Kadapa district collector, in a government order late Thursday, said the state was taking possession of the massive land parcel, cancelling the previous allotment made to Brahmani Industries in 2007.
The land, valued at more than Rs 5,000 crore at current market price, was given at the throwaway price of Rs 18-25 crore to former Karnataka minister, BJP leader Gali Janardhana Reddy, by the late Andhra Pradesh chief minister Y.S. Rajasekhara Reddy. Janardhana Reddy is a mining baron and promoter of Brahmani Industries.
ThePrint explains the case trajectory and why the land reclamation is being viewed as a political victory for the Telugu Desam Party (TDP), currently in power in Andhra Pradesh.
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The land row
Back in 2007, when the Congress-led government was in power in united Andhra Pradesh, the then CM allotted roughly 14,000 acres of land to Gali Janardhana Reddy for the construction of a steel plant in Kadapa district on 10,760 acres, and an airport on 3,115 acres.
The land was allotted to Brahmani Industries, promoted by Janardhana Reddy, who was minister for tourism in Karnataka from 2008 to 2011. Kadapa was YSR’s bastion, and the Karnataka minister, who already had mines at Obulapuram in Anantapur district, promised to construct a steel plant and airport, and industrialise the district, creating thousands of jobs for locals.
However, none of this materialised, except for a boundary wall and a couple of sheds for storing construction material.
Instead, Janardhana Reddy pledged the 10,000-acre land parcel as collateral for a Rs 350 crore loan from Axis Bank. State government rules, however, stated that the land was not meant to be mortgaged for any extraneous borrowings.
After YSR’s death in 2009, the Central Bureau of Investigation (CBI) took up the land case over non-conformity with provisions, besides other cases against Janardhana Reddy.
YSR role in land deal
The late CM, who served from 2004 to 2009 until his sudden demise, was the key architect of the land deal. It was under his administration that the huge land parcel was offered at a concessional rate of Rs 18,000 per acre. Furthermore, YSR’s government allocated 2 tmcft of water from the Gandikota reservoir, known as India’s Grand Canyon, for constructing the steel plant.
The TDP, which was then in the opposition in Andhra, activists, and investigative agencies objected to the land deal. They unanimously pointed out that YSR had bypassed several standard protocols to fast-track approvals.
The Comptroller and Auditor General of India eventually termed the land allotment as “injudicious” and said it was in direct violation of state rules, noting that there were many glaring irregularities, including the alienation of several water bodies around the Gandikota reservoir.
The Janardhana Reddy link
Janardhana Reddy, who was known to enjoy the patronage of late BJP leader and Union minister Sushma Swaraj, was the main promoter of Brahmani Steels through his flagship enterprise Obulapuram Mining Company (OMC).
The land in Kadapa was allotted to him on the premise of captive mining. The ore extracted from mines was supposed to be processed locally, converted to steel at the plant, and shipped from the Krishnapatnam Port near Nellore.
Instead, Janardhana Reddy and political ally B Sriramulu leveraged their political patronage and position as ministers in the Karnataka cabinet to exploit the mining licence and ship massive quantities of iron ore from the Krishnapatnam port.
They enjoyed windfall gains, generating immense profits, and allegedly exploited their proximity to both governments in Karnataka and Andhra Pradesh. All along, the steel plant never came up, eventually leading to the multi-crore scandal being unearthed by the CBI and other investigative agencies.
The OMC mining lease was cancelled. The CBI arrested Janardhana Reddy in September 2011 in connection with the OMC illegal mining case, and he spent several years in custody before being granted bail.
Y.S. Jagan Reddy’s involvement
The land allotment became one of the key transactions investigated in the CBI’s alleged quid pro quo investments case against former MP and CM of divided Andhra Pradesh, Y.S. Jagan Mohan Reddy, the son of YSR.
Jagan, who was living in Bangalore during his father’s first term as CM between 2004 and 2009, was ostensibly close to Janardhana Reddy. The CBI’s FIR categorised the 14,000-acre land allocation as a case of quid pro quo, as the two are understood to have allegedly entered into many deals together.
According to the investigative agency, the massive land deal was allegedly reciprocated by YSR in return for funding of his second term in office in 2009, and some investments were also traced through a shell entity to media firms managed by Jagan and his family.
Why land reclamation took ages
While the state government moved swiftly to terminate the land deal in 2012-2013 under the Kiran Kumar Reddy government after YSR’s death, the physical reclamation was stalled because of the numerous court cases registered by the investigation agencies.
The delay due to legal complications arose because Axis Bank granted the Rs 350 crore loan to Janardhana Reddy, and also moved the Andhra Pradesh High Court seeking ownership of the hypothecated land once the allotment was revoked by the state government. Andhra Pradesh’s division in 2014 caused further delay before the encumbrances could be cleared and the land could be taken back by the current administration.
Why reclamation is significant
Andhra Pradesh CM N. Chandrababu Naidu earlier this month launched the construction of the long-awaited JSW Rayalaseema Integrated Steel plant at Sunnapuralla Palli in Jammalamadugu mandal.
The timing of the land reclamation is thus significant for two reasons: for the Rayalaseema region, the announcement of a new steel plant, delayed by nearly 20 years, is welcome news. Naidu said the reclamation of the 14,000 acres frees up the parcel for additional industrial and infrastructure projects. As opposed to the 10,000 acres given to Brahmani Industries, JSW Group has been given 1,100 acres for the integrated steel plant.
Politically, with Naidu and Jagan both belonging to the Rayalaseema region, the reclamation of land and the subsequent announcement of JSW’s steel plant augurs well for the TDP.
The party has begun circulating the narrative that it was the TDP that restored Kadapa’s reputation from scandal-ridden district to a prosperous one, where a steel plant is shortly to take shape.
This is an updated version of the report.
(Edited by Nida Fatima Siddiqui)
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