In a severe blow to the Infrastructure Kerala Limited (INKEL), the Revenue Department has come out with a set of conditions to be followed before transferring prime government land to INKEL in which the government has only a minority stake.
The Revenue Department, in a note to the Industries Department, has put forth 22 conditions. INKEL could not be given all freedom with regard to the land, the note says. It said that there was every possibility of even the 26 per cent stake of the government in INKEL being diluted later on whenever there is a discussion on Special Purpose Vehicle route for any business proposal in the future.
Moreover, it says that the department will issue orders on land transfer after examining the merit of each case instead of line departments issuing orders. INKEL could not sublet or misuse the land and that the land acquired for government purposes would not in any case be leased out to INKEL.
The Revenue Department’s note comes in the wake of INKEL’s request to transfer government land across the state for various projects. INKEL has demanded land for constructing Olympic tower, commercial complex and market area development in Thiruvananthapuram.
It has also demanded land for developing furniture city in Aluva, development of 85 acres of land at Ramanattukara and development of 250 acres of land at Panakkad. Another important condition is that the land value fixed by the government over and above 26 per cent of government share should be converted as non-transferable and irredeemable debentures with a coupon rate not below the Repo rate or the rate base fixed by commercial banks for loans.
The debentures should be given to the government from the third year of the commencement of the project. A quadripartite agreement may be arranged between government, respective department of INKEL and respective financial institution if permission for mortgage has to be cleared.
The note further says that the government will be vested with the right to cancel, withdraw, modify or keep in abeyance any agreement entered into between INKEL and the others in case of any violation. Among other conditions are: the land should only be used for the purpose for which it is assigned or leased, rent shall be revised once in three years, prior permission of the department has to be obtained whenever and wherever government land is at stake and constructions if any shall be started within one year of agreement of lease and the same shall be completed within a period of three years.