Vanpic pact has full of holes: CBI - TeluguPeople.com News

HYDERABAD: The CBI said the concession agreement signed by the state government and Vanpic Ports Private Limited, in which Nimmagadda Prasad, popularly known as Matrix Prasad, has a stake, was not in tune with the Cabinet approval and contains several grave lapses.

The investigation agency also found there were crucial deviations and defects in the concession agreement, which are 'detrimental to the interests of the state. Prasad also exaggerated the total expenditure to about Rs 450 crore against actual payment of about Rs 150 crore.

'The final destinations/ beneficiaries of Rs 300 crore are to be ascertained,'' the CBI said in its remand report.

The investigation agency said the state government proposed construction of Vodarevu and Nizampatnam ports on Government- to-Government (G2G) basis and in February 2008, A J Jagannathan, advisor to Ras Al Khaima (RAK), one of the seven UAE emirates, expressed his government's interest to partner with the state.

A memorandum of understanding (MoU) was signed on March 11, 2008, between the state government and the government of RAK to develop an integrated Vodarevu And Nizampatnam Port and Port-related Industrial Corridor (VANPIC).

The investment and infrastructure department of the government was nominated as the nodal agency and RAK shall contribute not less than 51 percent of the approved project cost.

RAK, however, can take an Indian partner. On March 29, 2008, the RAK Investment Authority conveyed to the state government that M/s Matrix Export Holdings Private Limited was chosen as its Indian partner.

'On the same day, Prasad and RAK entered into an agreement. On March 31, Vanpic Ports Private Limited was incorporated with Nimmagadda Prasad and M/s Matrix Export Holdings as the original subscribers to the memorandum and without any mention of RAK and RAK entered into the said private company subsequently,' the CBI said

The CBI said that a memorandum prepared by I&I department and approved by the minister concerned was placed before the Cabinet on June 30, 2008.

As per the memorandum, apart from several issues, it was mentioned that an extent of 2,000 acre for development of ports at Vodarevu and Nizamapatnam may be considered for allotment on lease basis.

The cost of private land, if required, would be borne initially by the concessionerate and adjusted later against the lease payable to the government.

The Cabinet approved the proposal for awarding VANPIC project on Build, Own, Operate and Transfer (BOOT) basis to Vanpic Ports, and on July 10, 2008, the I&I department issued Go No. 30 accordingly.

The then special secretary, K V Brahmananda Reddy, and Nimagadda Prasad signed the concession agreement on behalf of the government and Vanpic Ports respectively.

'The concession agreement signed is not in tune with the Cabinet approval and contains several grave errors/lapses. Vanpic Projects Pvt Ltd controlled by Nimmagadda Prasad so far cornered 13,000 acre in the VANPIC project area,'' the CBI said.

In 2009, the government also observed deviations in GOs /concession agreement when compared with the concession agreements of Gangavaram/Krishnapatnam ports.

The CBI said that one of the deviations permitted dilution of RAK share to 26 percent, facilitating entry of another private company, Navayuga Engineering Company Ltd, cornering equity and getting control of it.