HYDERABAD: The State Cabinet gave its approval for allotment of 210 acres at Toopran near the city to M/s MLR Motors for Rs 5 lakhs an acre to set up a car factory. Another 250 acres would be allotted later for ancillary industries.

The Hyderabad-based company, which is headed by B. V. R. Subbu, is investing Rs 2,500 crores along with others on a car-manufacturing unit and plans to roll out its entry level 900 cc and 1500 cc diesel cars in 2009. At a meeting on Friday evening, the Cabinet resolved to allot another 250 acres later for ancillary industries.

The meeting also decided to transfer the subject of sand auction to Industries department from Panchayat Raj and Rural Development.

Under this new policy, a five-member district level committee headed by the Joint Collector will regulate the auctions. However, the assistant director, Mines & Geology, will recommend the upset price in each mandal. The auction would be valid for one year-- January 1 to December 31.

The policy prohibits movement of sand to other States and use of machines for mining.

It exempted weaker section housing, boatmen cooperative societies and transport by bullock-carts and other animals from payment of seigniorage fee. The boatmen societies have been offered a 10 per cent concession on the highest bid.

A decision was taken to recruit staff exclusively for intelligence as permanent intelligence staff and allow 50 per cent of pay as allowance to "counter intelligence" staff on a par with Special Intelligence Branch.

MOU with Reliance

The State Cabinet on Friday resolved not to enter into MoUs with the Reliance Industries, the Gujarat State Petrochemicals Company and other companies to purchase gas from their reserves in the Krishna-Godavari basin unless they indicate the price.

This decision comes amidst Reliance's insistence that the Government sign the MoU specifying the quantity of gas it may purchase from July 2008 when its gas will be ready for sale.

The Government is hard-pressed for gas as 2,000 MW capacity remains idle now for want of the fuel.

The Cabinet noted that the Reliance signed an agreement with the NTPC quoting a price of $ 2.97 per MMBTU (million metric British Thermal Units) and decided this should be offered to Andhra Pradesh too.

Chief Minister Y. S. Rajasekhara Reddy asked Chief Secretary J. Hari Narayan to negotiate with the Reliance for this price for an MOU covering the quantity too.

He was also asked to discuss the GSPCL for the same before it laid pipelines to take gas to other states. At this price, permission could be given to it to take supply to Kakinada and Visakhapatnam.

Sources said the Cabinet, however, took a positive note of the offer made by the Reliance to supply 20 MCMD( million cubic metres per day) by July 2008 to the State out of its total availability of 80 MMD by then.

This would be sufficient to support 4,000 MW capacity.

The Cabinet approved formation of the Krishna-Godavari Gas Network Private Limited with 26 per cent equity participation each by the State and GSPCL and 48 per cent by IDFC to bring down LPG cylinder price by half and ensure supply by pipeline to all towns with GSPCL gas.

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