Yusuffali MA, Chairman & Managing Director of LuLu Group International
Credit: Lulugroupinternational.com
Hyderabad: In a dramatic turnaround, Abu Dhabi-based multinational conglomerate LuLu Group International is back in Andhra Pradesh. After cancellation of their land allotment in Visakhapatnam by the previous Y S Jagan administration, the LuLu group left Andhra Pradesh in a huff back in 2019, vowing never to invest in the state again.
Following the return of the TDP-led NDA government in Andhra Pradesh, Lulu group's MD Yusuffali came calling on chief minister N Chandrababu Naidu on Saturday and discussed the possibility of restarting their investments in the state again.
According to the Chief Minister Office (CMO) in Andhra Pradesh, on the cards are malls, multiplexes, hypermarkets in Vizag, Vijayawada, Tirupati and investments in food processing.
Naidu, who welcomed his good friend Yusuffali back in Andhra Pradesh, said, “I'm pleased to welcome the Chairman & MD of Lulu Group International, Mr. Yusuffali, and the Executive Director, Mr. Ashraf Ali MA, back to Andhra Pradesh. I had a very productive meeting with their delegation in Amaravati today. We discussed plans for a mall and multiplex in Vizag, a hypermarket, and multiplexes in Vijayawada and Tirupati, along with investments in the food processing sector across the state. The GoAP shall extend every possible cooperation and support. I wish my friend all the best in his endeavours and look forward to a fruitful partnership for the development of Andhra Pradesh.”
The Jagan government had canceled land allotted to LuLu in Nov 2019.
Months after YSRCP had come to power in November 2019, the Gulf-based LuLu Group had announced it would not invest in Andhra Pradesh. Their decision came after the Jagan Mohan Reddy government cancelled the land allotted to LuLu Group by its predeccor TDP government between 2014 and 2019 to develop a world-class convention centre in Vizag on the beach road.
LuLu Group planned to invest around Rs 2,200 crore in Andhra Pradesh in 2019 and laid the foundation for the mega convention centre in February 2018.
Jagan's cabinet felt that there were irregularities in allotting land to Lulu Group by the previous TDP government and decided to cancel the allotment.
At that time, LuLu Group announced that they had decided to invest Rs 2,200 crore in Andhra Pradesh to build an international convention centre, a shopping mall, and a five-star hotel project to provide global exposure to Visakhapatnam as a convention and shopping hub.
Apart from this, the proposed mixed-use project was expected to provide employment to more than 7,000 local youth.
“We had participated in a very transparent bidding process and were awarded the land on lease for this project. Though we have incurred huge expenses towards initial project development costs such as appointing internationally renowned consultants and designing the project by world-class architects, we agree to the decision of the new Government of Andhra Pradesh to revoke the land allotment for this project,” said LuLu Group’s director for India, Ananth Ram, in November 20, 2019.
He also said, “Given the current scenario, we have decided not to invest in any new projects in the State of Andhra Pradesh. At the same time, we wish to confirm that our investments in upcoming projects in the other states, i.e., Uttar Pradesh, Telangana, Tamil Nadu, and Kerala, will go ahead as per schedule.”
'LuLu land' remained unused
After canceling the allotment to LuLu Group, the then Y S Jagan government had attempted to sell the land on the beach road in Vizag in an open auction.
The auction under the aegis of the National Buildings Construction Corporation (NBCC) Limited of the 13.59 acres of land, previously allotted to Lulu Group, had a staggering reserve price of Rs 1,452 crore. However, there were no takers.
Due to a lack of response, NBCC had to cancel the tenders and float new ones multiple times. The erstwhile Y S Jagan government fixing a reserve price of Rs 107 crore per acre had become a talking point in the state at that time, given the hype around Vizag as executive capital under the three capitals plan.
Over the past five years, neither a mall nor a multipurpose hospitality project has come up, nor has the government's exchequer received any revenue from the sale of the land.
This is largely due to the fixed 'ultra premium' price, which experts in the real estate sector had deemed practical. The valuable land site has remained unutilized for all these years.