Television news channels have been largely silent, expect for one interview MA Yusuf Ali gave on Reporter TV (he also inaugurated the channel’s new headquarters).
The issue was first brought to life by The Hindu, Port gets just Rs.71 crore for a deal to build flats worth Rs.1,000 crore.
The article points to three main areas of contention:
1. The low price
A real estate development project of 572 apartments worth over Rs.1,000 crore on the Bolgatty island off Marine Drive is awaiting final environmental clearances. This is part of a Rs.380-crore investment deal to build a convention centre and a hotel. But the real owner of the land, the Cochin Port Trust (CPT), gets just Rs.71 crore for handing over the land on a renewable 30-year lease.
But the CPT is now handing over 26 acres of waterfront land on the Bolgatty island for Rs.71 crore and an annual lease rent of Rs.1.05 lakh with a 30 per cent rent hike every five years. Land can be bought at Bolgatty in the open market only for Rs.20 lakh a cent (one-hundredth of an acre), which will put the market price for the land at Rs.20 crore an acre and thus the total land cost for the project at about Rs.500 crore.
2. The environmental impact
So, the 572 apartments will be worth over Rs.1,000 crore as they are coming up on land reclaimed from Vembanad Lake, an ecologically fragile wetland (Ramsar site).
While justifying the reclamation during 2004-05, the CPT had contended that no Coastal Regulation Zone (CRZ) clearance was required as the total project cost was less than Rs.5 crore.
The Kerala State Coastal Zone Management Authority had issued CRZ clearance to the project even while its subcommittee had listed out the CRZ violations.
3. No response. Questions ignored.
The CPT refused to respond to The Hindu’s queries.
Paul Antony, IAS, Chairman, Cochin Port Trust gave a detailed response to the article once it was published. The Hindu published the response in detail. One key fact that emerged from the explanation was that MA Yusuf Ali was the only bidder.
However, the only tender received was from Mr. Yusuff Ali M.A, EMKE Mansion 1, Nattika P.O, Thrissur.
Two others submitted “casual letters” with higher amounts but withdrew it.
Though the CPT had adopted a transparent tendering process giving sufficient opportunity and time to bidders, two casual letters were received from two parties offering a higher amount than the bid submitted by Mr. Yusuff Ali. These were from KENT Constructions Pvt. Ltd. and Thomson, who had not participated in the tendering process. Later, KENT Constructions Pvt. Ltd. and Thomson submitted offers at the rate of Rs.91 crore and Rs.87 crore respectively.
In early April, the CITU has raised the issue, again reported in The Hindu:
CITU leader M.M. Lawrence has demanded a comprehensive inquiry into the leasing out of 10 hectare land of the Cochin Port Trust (CPT) at Mulavukad to a private entrepreneur.
The key contention seems to be the price:
The State government had got Rs. 9 lakh a cent in 2004 when the land reclaimed for Goshree bridges were sold. However, the Port Trust assessed the value of the leased land, which is just 500 metres away from the Goshree land, at Rs. 2.10 lakh a cent six years after the sale of the Goshree land. When land was acquired for Kochi Metro Rail project in the city, the land owners were paid a compensation of Rs. 51 lakh a cent. The Port Trust authorities deliberately ignored the fact that a waterfront property would have more commercial value, he said.
Yesterday, the main opposition party in the state has raised the issue by issuing a statement calling for a probe.
A statement issued by the CPI(M) district committee here on Saturday said the deal that the Port Trust had entered into reflected serious misuse of power and financial irregularity.
The statement also says there is a “conspiracy”.
MA Yousef Ali is a businessman. He is the Arabian Dream every Malayali who steps off a plane or boat in the Gulf hope to make a reality. Starting small, as they always do, today he is one of the most wealthy and powerful Indians in the Middle East.
In Kochi itself he owns a stake in the airport, hotels, catering and LuLu Mall. His EMKE Group is a private holding, so details of ownership and revenues are not publicly known.
If there is a “conspiracy” in this deal. Why focus on MA Yousef Ali? If the real issue here is the price, why hasn’t anyone else made a serious bid at a higher price? Ultimately there can be proof of corruption only if there is quid pro quo established between the Cochin Port Trust and other government officials with Yusuf Ali and the EMKE Group.
It is very natural, especially in Kerala, that this could all be a result of business jealousy and rivalry. We have seen such behaviour at the launch any new initiative in the state.
The onus lies with the government and Cochin Port Trust (CPT) officials to prove beyond doubt they there was only one bidder and they decided to go ahead with just one bid. Such a move can create a better investor confidence and attract more investment into the state.
Perhaps, it would also help the situation if our governments ministers and officers can make a full disclosure whether they or their family member have any business dealings with Yusuf Ali or the EMKE Group.
Right now it leaves enough room for rumours and conspiracy theories. Why didn’t the CPT call for an international tender and call for bids from all over the world? Why just the Times of India and Malayala Manorama? 24 acres of prime waterfront property in Kochi, why not advertise in the Financial Times?