AP scraps Reddy's steel plant project

In a further setback to former Karnataka minister Gali Janardhana Reddy, the Andhra Pradesh government late night Thursday issued an order terminating the MoU with Brahmani Industries for a steel plant in Kadapa district, as it "totally failed to fulfil its commitments".

The validity of MoU with the company expired on May 20, 2010 and it failed to fulfil its obligations and live up to the agreement, an order issued by Principal Secretary (Industries) T S Appa Rao said.

Brahmani Industries Limited (BIL) is a subsidiary of Obulapuram Mining Company owned by Gali Janardhan Reddy, who is now in jail in the illegal mining scam.The then government headed by Y S Rajasekhara Reddy had allotted 10,760 acres of land to BIL for setting up an integrated steel plant with an initial production capacity of two million tonnes per annum.

Initially when the project was mooted, the government had agreed to allot only 8,000 acres to BIL but the then Chief Minister ensured that the company got more land than required.

Several other incentives under the state’s Industrial Promotion Policy 2005-10 were also extended to BIL, as it was classified as a 'mega project'.

The YSR government also allotted 3,115 acres of land to BIL for setting up a "commercial airport and flying academy" at Ambavaram village in Kadapa district.

The CAG, in its latest audit report, rapped the AP government over the indiscriminate allotment of land to BIL.