Undue benefits of Rs 156 crore provided to IT companies: CAG

Comptroller and Auditor General (CAG) has found that due to absence of guidelines, IT parks under Information Technology Department in Kerala, extended undue benefits amounting to Rs 156.90 crore to 11 major co-developers.

CAG in the audit report for the year ended March 2014 of land issues in three IT parks also said nearly 64 per cent of land provided for IT development across the state still remained unutilised since 1990.

The audit was conducted covering the period April 2009 to March 2014 to examine the allotment and utilisation of land in IT parks -- Technopark, Thiruvanathapuram, Info Park, Kochi and Cyber Park, Kozhikode.

The audit observed various irregularities such as absence of standardised procedures, dilution of terms of agreement in the allotment of land to co-developers.

In Technopark Phase II, land to two major IT companies were allotted at subsidised rates without any basis, resulting in short recovery of Rs 22.53 crores.

Similarly, neither the rule or criteria to govern fixation and collection of lease rent were stipulated nor the agreements prescribed a uniform rate of lease rent to be paid by co-developers, resulting in undue benefits to some of them.

Out of the 1,384.12 acres of land provided for IT development from 1990 to 2010, only 505.40 acres (36 per cent) had been utilised so far and the balance of 879.72 acres was still unutilised. "There was no agency in assessing the requirement of land for establishing IT firms in the parks," the report said.

Coming down heavily on the Kerala State Information Technology Infrastructure Limited (KSITIL), the report said the institution, the apex body set up for the promotion of IT cities in PPP mode, acquired several acres of land in seven places to set up 'Hub and Spoke' model IT development which was not suitable for the purpose due to remoteness of chosen locality.

The total expenditure for acquisition of land and for developing infrastructure facilities in these places came to around Rs 229.88 crores. Built up space of 3.19 lakh out of 3.94 sq ft remained unallotted in these locations so far.

The report also criticised the KSITIL for incurring irregular expenses to a tune of Rs 4.17 crore on stone-laying and inauguration of three IT entities.