Chandy urges businessman not to abandon crucial project

By Ashraf Padanna/Thiruvananthapuram

Kerala Chief Minister Oommen Chandy yesterday urged Gulf-based Indian businessman Yusuffali M A not to cancel a prestigious project in the state.

The businessman, who heads one of the world’s 10 fastest growing retail chains, has asked the Cochin Port Trust (CPT), which leased out 26 acres to his group to build an international convention centre, to return his money and take back the land.

Opposition leader V S Achuthanandan too endorsed Chandy’s position saying Yusuffali violated no rules and all his dealings were within the framework of the law.

“The decision to withdraw from the project cannot be accepted. The land was handed over to him on lease as per the law,” Chandy said. “He helped clear the Smart City project (of Dubai’s Tecom Investments) during the previous government. There is no mistake on his part. Please don’t dishonour him.”

Yusuffali decided to abandon the Rs8bn project after the opposition Communist Party of India (Marxist) alleged violations and threatened to launch a campaign against it. The party also accused him of grabbing land for the Rs16bn LuLu Mall in Kochi, the biggest in India with a total built-up space of 2.5mn sq ft, and asked him to fund a Rs1bn flyover to ease the traffic congestion there.

“The land he purchased was monitored by the central government and in between the Kerala High Court also intervened and cleared it. The shopping mall also was a clean project. We will not allow him to withdraw from the project as it involves 4,000 new direct and 12,000 indirect jobs,” Chandy said.

CPM leader Achuthanandan, who was the state’s chief minister when the two projects were cleared, said no one had raised any objection at that time.

The present controversy is seen as an offshoot of the bitter power struggle between him and Pinarayi Vijayan, the party’s state secretary, who wants to remove Achuthanandan as leader of the opposition in the Kerala assembly.

“I have spoken to Paloli (Mohamed Kutty, who was the minister concerned under him) and clarified things. He received land in both cases through a transparent bidding process quoting the highest amount. The convention centre is a project that offers 4,000 new jobs,” Achuthanandan said.

However, the CPM leader M M Lawrence said Achuthanandan was ignorant of the rules governing the port’s land which could not be used for any purpose other than maritime activities.

“This is the party’s position which we had made clear (for everyone to understand),” he said.

The port authorities said they were seeking legal opinion on Yusuffali’s letter demanding Rs720mn back, which he paid for the land in 2010, which the cash-strapped CPT will find hard to meet. He had also claimed a 10.5% service tax he paid on the deal.

The decision of the businessman, who recently announced investments worth Rs30bn in his home state, came as a shock to the government which has been working hard to attract investments, especially in the service sector.

Yusuffali asserted that he acquired the CPT land through a transparent bidding process quoting a much higher rate than the floor price and he was deeply pained at the allegations.

Though he announced the 5,000-seat convention centre and a 250-room Hyatt Hotel, the project’s opponents say a complex of 520 serviced apartments was also part of the project which could fetch him Rs10bn and it was intended for real estate business.

“The land was allotted on a 30-year lease. Do you think anybody will buy the flat built on leased land? These are serviced apartments for the guests to stay,” said Yusuffali.

“There’s a hidden agenda against the project which has the potential to turn the city into a hub of conferences like Singapore. I was expecting to attract 250 international conventions a year,” Yusuffali said.

 The CPM welcomed the decision and urged the CPT to seek fresh global tender. It rejected Yusuffali’s argument about the status of the leased land saying “it’s as good as an outright sale and there are provisions in the deal to renew the lease from time to time.”