HYDERABAD: Delivering yet another blow to Gali Janardhan Reddy-YS Jagan Mohan Reddy axis, the state government has scrapped the agreement it had entered into with Brahmani Industries Limited (BIL) in 2007 for setting up a steel factory in Kadapa district. The government issued GO No. 99 to this effect on Thursday.BIL was promoted by Gali Janardhan Reddy, who is very close to Jagan and the late YSR’s family. To enable BIL to set up the factory, government had allotted 14,000 acres.The consideration for allotment of land was that BIL had obtained leases for mining iron ore from Anantapur district by Obulapuram Mining Company (OMC) for which too Janardhan Reddy was the promoter. The crucial part of the agreement was the ore mined by OMC should be used by BIL.Though iron ore was mined by the company, it was never used by BIL since the factory never came into existence. Instead, the ore was exported by the management, taking advantage of the fact that the GO, while granting mining leases, made no mention that it should be utilised only by BIL. This had helped OMC export the ore and earn huge amounts. The CBI, which investigated the case, sent Y Srilakhsmi, who was secretary in the industries department then, to jail for omitting the word captive in the GO.“With the issue of the GO terminating the agreement, the land allocation made to the company stands cancelled. The revenue department has already begun the process of resuming the land,” a senior official in the industries department said. Along with the agreement, GO No. 477 which conferred several concessions to the company too is cancelled.“The agreement was made in 2007 for a period of three years. Since the promoters have not constructed the factory even after three years, the agreement was overdue for scrapping. It should have been done in 2010 itself,” principal secretary in the industries department, TS Appa Rao, told Express.According to officials, the agreement was cancelled after the government had noticed that the obligation to complete phase I of the project with a production capacity of two million tonne was not fulfilled even after the lapse of one and a half years after the stipulated time. The company did not establish the first phase of the plant and did not begin works on the projects like site levelling, construction of boundary wall, water supply, power supply and so on, necessary for the first phase. On the top of this, the company, in its letter dated March 1, 2011, informed the government that since the parent company OMC had stopped operations, BIL plant works too had stopped.The government had noticed with concern that the BIL had pledged 10,760 acres to Axis Bank, Proddatur for obtaining a loan of `350 crore. The district collector lodged a complaint with the station house officer, Jammalamadugu, and a chargesheet was filed on March 22 against BIL.
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