Hyderabad: The Comptroller and Auditor General (CAG), in its report tabled in the assembly on Monday, questioned the allotment of 48 acres to Amazon Data Services India Private Ltd within HPC limits, noting that the project was originally conceived as a dedicated pharmaceutical manufacturing cluster under National Investment and Manufacturing Zone (NIMZ) guidelines.In its report, the CAG examined land allotments and project implementation in HPC and highlighted key irregularities. As per these guidelines, land in such zones must be used strictly for purposes defined in the master plan. However, the audit said allotting land for a data centre amounted to a deviation from the stated objective of developing a pharma-focused industrial hub. It also flagged concerns over employment generation, observing that the shift could impact the project’s target of creating 1.66 lakh direct jobs, as data centres have relatively low employment potential. “The allotment of land in the HPC for the establishment of a data centre was a deviation from the purpose for which the HPC was proposed. The target of generation of direct employment for 1.66 lakh people at the HPC was also jeopardised since the employment potential of a data centre was very minimal. By executing the sale deed TGIIC lost the remedy of resumption of the premises in the event of non-implementation of the unit,” the CAG said in its report. The Telangana govt, in its reply to the audit in Oct 2023, maintained that the project is still under implementation and that the allotment to the company does not impact the overall objectives of HPC. It said the decision was taken in line with the framework agreement entered into with the firm. HPC, proposed during the previous govt, was planned across 19,333 acres in Rangareddy district at an estimated cost of ₹19,098 crore, including ₹1,550 crore for land acquisition. The project was expected to attract investments of ₹64,000 crore and generate significant employment. Development was planned in two phases, with phase I covering around 8,200 acres between 2017 and 2020. However, the audit found that land acquisition has been fragmented, with 10,238 acres not contiguous. This has delayed even phase I of the project, leading to non-achievement of the expected employment generation of 50,000 jobs in the initial phase. The report warned that delays could escalate project costs due to rising market value of surrounding land and potential demands for higher compensation. Weak monitoringThe CAG also flagged weak institutional monitoring. A special task force committee set up for speedy implementation of the project, which was supposed to meet monthly, met only three times till May 2016 and has not convened since.Beyond HPC, the audit pointed to systemic issues in land management by the state’s industrial infrastructure agency. It noted that despite holding a land bank of over 53,000 acres as of March 2022, the agency had not conducted periodic surveys since its formation in 2014. In the absence of regular surveys, it was unable to detect encroachments, track changes in land use, enforce contractual conditions, or ensure proper planning and maintenance of infrastructure. The audit also observed that inspections of industrial units were not carried out to check compliance with agreement conditions. This limited the govt’s ability to take corrective action or impose penalties where required. In its response, the state govt said that due to non-alienation of certain lands, only advance possession had been taken and these were not reflected in the books of accounts. As a result, physical verification was not undertaken and reconciliation remains pending. It added that a special drive is currently underway to reconcile the land bank.
