The Hindu : Andhra Pradesh News : Granite lease triggers furore

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Tuesday, Feb 19, 2008
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Andhra Pradesh

Andhra Pradesh

Granite lease triggers furore

Special Correspondent

TD hints at scandal in grant of lease for ‘Chimakurthy Galaxy’

TDP members stall proceedings, demand lease agreement documents to be tabled
Lease amount deliberately undervalued to benefit the joint partner, says Goud

HYDERABAD: The Assembly witnessed a furore on Monday over an allegation levelled by the Telugu Desam Party that a major scandal was involved in the grant of lease for the mining of the world famous Galaxy granite at Chimakurthy village of Prakasam district.

TDP members stalled the proceedings during question hour demanding that the Government place before the Speaker documents relating to the lease agreement signed with a joint venture company, Gimplex and Mid-West, which was awarded the right. The situation subsided only after Speaker K.R. Suresh Reddy promised to schedule a short discussion on the issue in the coming days of the Assembly session.

The main Opposition party alleged that the Government modified procedures of lease for the benefit of the joint venture company after the mining operations were stayed by the court from 2001 to 2004. The conditions were changed to attract a joint venture instead of a single lessee, said TDP deputy leader T. Devender Goud.

Global pricing

He added that at the international price of Rs. 60,000 per cu.mt. of Galaxy granite, public money to the tune of Rs. 10,900 crore was lost in the scandal. The lease amount was deliberately undervalued at Rs. 44,900 a cu.mt. to benefit the joint venture. He sought to know the forces behind the firm and said the TDP will accept defeat if the examination of papers before the Speaker did not reveal any irregularities.

TD charge denied

Mines and Geology Minister P. Sabita Indra Reddy refuted the TDP allegation that rules were framed to favour a particular company. She said the joint venture company was given the right to produce a minimum of 500 cu.mts. per hectare annually. Even at minimum production levels, the AP Mineral Development Corporation could earn Rs. 12 crore per annum from the company towards lease amount and the Government could get Rs. 6 crore as royalty.

She said the Congress Government earned a revenue of Rs. 70 crore from the lease while the earning was only Rs. 16 crore in the previous TDP regime.

Replying to Mr. Goud’s claim that huge money was earned from production of Galaxy granite, she asked why the TDP Government cancelled the earlier lease if that was so. The Government earned no revenue during the period when the operations were stopped on a court order.

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