As if the T storm was not enough,now the recent Emaar-APIIC land scam has opened a can of worms that threatens to jeopardize the reputation of the state,especially Hyderabad,as an attractive investment destination.

With shocking allegations that a cash-strapped AP government not only sold Hyderabad realty cheap but also failed to ensure good revenues for the state exchequer,the Emaar-APIIC dealgone-sour has now put other similar deals struck with realty biggies like the Rahejas,DLF and Unitech under the scanner.

No surprise then that the latest scandal unfolding in the state is giving Andhra Pradesh Inc the jitters.Industry sources pointed out that this episode will put the brakes on whatever little momentum the state was trying to build up just as it was trying to limp back to normalcy after the T-blow.

The Emaar-APIIC land scam is yet another dent in the states reputation as an investment-friendly state and will definitely hit investor confidence,feels Harish Chandra Prasad,immediate past president of the Federation of Andhra Pradesh Chambers of Commerce and Industry (Fapcci).
Such things are not good for the state and give it a bad name since government bodies are involved in it.Besides,the deal lacks transparency.These are not instances of small omissions and commissions but that of blatant irregularities and misuse of public funds and authority, says Prasad.

Pointing out that the entire scam had thrown light on APIICs method of functioning,the former Fapcci chief says: Instead of creating infrastructure to promote industrial growth,APIIC is only working like a realtor,cashing in on the huge land bank it has at its disposal without any benefit accruing either to the state government or to the poor farmers.

The scam has already sent industry bodies like the Confederation of Indian Industry scrambling to meet chief minister K Rosaiah and leaders of other political parties early next month to seek some clarity on the impact of such negative developments and the way ahead for AP so as to tackle the vexatious issue of attracting investment into a state that has been struck by one blow or the other after former CM YS Rajasekhara Reddys demise in September 2009.

CII AP chairman Shakti Sagar feels that the scam may make corporates,especially those who are counting on government land for their projects,a bit more cautious and apprehensive about setting up shop here.I dont think there will be an immediate impact but people may be more apprehensive.

Though there are also some who feel that while corruption and wheelingdealing are a part of Indian psyche,government involvement in such scams does not augur well for the states investment climate and investor confidence.

Though such things happen everywhere and businesses factor such uncertainties in their investment decisions,such instances may divert investment headed for the state to other competing states like Karnataka and Tamil Nadu, feels V Venkataramana,Dean,School of Management Studies,University of Hyderabad.

Companies counting on government land for projects will definitely think twice and confidence levels will be hit because when the government becomes a litigant no business can survive, says Venkataramana,adding that this holds more true for big projects and players like Reliance and Tatas,who always look for soft landings.If they find the going too tough they may just change the flight path a few hundred kms from here and land in Bangalore or Chennai.

However,former State Bank of Hyderabad managing director Amitabha Guha, who feels that the issue arose more out of the lack of legal and technical expertise of APIIC and other state agencies to deal with legal issues pertaining to realty. The scope of the due diligence and nature of due diligence is suspect because they could not gauge the the kind of revenue the project could have generated.And this happened due to lack of expertise, opines Guha. However,according to analysts,this is not the first time that such a land scam has rocked the state and perhaps wont be the last. The policy of Andhra Pradesh of giving away land in Hyderabad cheap to attract big business was first devised by former CM Chandrababu Naidu and continued by his successor YS Rajasekhara Reddy. In fact,experts point out that just like the Emaar-APIIC deal,which was struck in 2003,the state government had entered into a deal with sports management company IMG which in joint venture with a US-based NRI,had floated the IMG Bharata Academy to spawn Olympic talent but the deal had run afoul after the YSR Reddy government came to power and decided to review all the deals inked during Naidus reign. Comment : Keyword Tags Hyderabad News,APIIC, Emmar, Boulder Hills, Emmar Hyderabad Rate News on a Scale of 5. 5th Star Correspond to 5. Shop Online for Mobiles, Discount Offers. Send Gifts, Flowers to India, Hyderabad Consumer Complaints India - Real Estate, Companies, Products