Government indifference and inability to ensure availability of proposed land that would grow up hotels and resorts proved to be a spoiler to the objective of promoting the coastal city of Visakhapatnam as an international tourist destination. According to the CAG scrutiny reports, non-allotment of full extent of land to the developer, coupled with lack of urgency and initiative in renegotiating DMA by the department has led to the failure of coming up of significant number of hotels in the beach town.
The state government had awarded the Bay Park Resorts project to Indo-American Hotels and Resorts (P) Ltd in November 2000 for development in public-private partnership (PPP) as part of a plan to develop Visakhapatnam as an international tourist destination.
The project includes construction of a beach resort, development of various tourist related facilities on the beach front like swimming pools, landscaping, sun bathing, water play systems and others.
The government was to provide 50 acres of land, free from all encumbrances, charges and other liabilities, to the developer on lease for 33 years. The developer had to achieve financial closure within 120 days that is by April 2001 and complete the project within 36 months i.e., by December 2003.CAG intervention revealed that as against the 50 acres of land to be provided to the developer by the state goverment, it handed over only 37 acres in March 2001 and the developer was required to obtain clearance from the Union ministry of environment and forests (MoEF) for the remaining 13 acres which was on the sea front. Despite pursuance by the developer for about eight years to obtain clearance for the forest land, the MoEF refused it permission for developing the beach front in the proposed 13 acres. The state government and the developer agreed in November 2001 to start the project within the available land and the total project as agreed upon was to be completed as and when the balance 13 acres was made available.
Accordingly, the project’s cost, time schedule, etc. were required to be revised. Failing to get the remaining 13 acre land, the developer team couldn’t complete the project by the deadline. The government issued a notice in December 2007 for termination of the Lease-cum-Development and Management Agreement (DMA) but later extended the lease period by seven years till March 2014.
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