Govt clears Lulu lease despite Pawan’s objections
Pawan and Manohar opposed the company’s plea to revise lease rents once every 10 years instead of the mandated three, but the govt has now approved a 10% escalation every 10 years
Vijayawada: Despite strong objections from Deputy Chief Minister and Jana Sena Party chief K Pawan Kalyan, the state government issued the GO late on Tuesday night approving the revised lease terms sought by Lulu International Shopping Malls Pvt Ltd (LISM) for its mega shopping mall project in Visakhapatnam.
In the Cabinet meeting on October 10, Pawan Kalyan and fellow JSP minister Nadendla Manohar were said to have raised serious concerns over Lulu’s proposal to revise the lease conditions.
They questioned the company’s request to increase annual lease rentals every ten years, pointing out that existing rules prescribe a 10 per cent hike every three years.
They also objected to the state’s plan to allow only a 5 per cent escalation every five years, describing it as preferential treatment. Both ministers argued that the government should not discriminate between Lulu and other business entities and expressed doubts over the company’s ability to generate employment for local people.
They further objected to the government extending concessions despite providing prime land to Lulu in both Vijayawada and Visakhapatnam and raised questions about the firm’s food processing business model.
Despite these objections, the government cleared Lulu’s additional requests, finalising the financial framework for the Visakhapatnam project. The new terms include an annual lease rental of and a 10 per cent escalation every ten years, Rs 7.08 crore starting from 2028, a three-year lease-free period, and a security deposit of Rs 7.08 crore.
Earlier, the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) had allotted 13.74 acres at Harbour Park on Beach Road, Visakhapatnam, on a 99-year lease for the 13.5 lakh sq. ft. mega mall.
The project will include a Lulu Supermarket, Lulu Fashion and Lulu Connect stores, a family entertainment centre, and leased retail outlets.
The lease-free period was granted under the Andhra Pradesh Tourism Land Allotment Policy 2024–2029 to support early project implementation.
The State Investment Promotion Board (SIPB) reviewed Lulu’s revised proposal on October 8, following recommendations from the State Investment Promotion Committee (SIPC).
Officials said the approval aims to expedite the project’s commencement and strengthen Visakhapatnam’s retail, entertainment, and tourism infrastructure.
