Hyderabad: The prestigious FAB City project is a big failure, causing the state exchequer to suffer a loss of Rs 100 crore.

The government in undivided AP had entered into a MoU with SemIndia in 2006 to promote the semi-conductor industry and identified 1,200 acres in Srinagar and Raviryal villages of Ranga Reddy district for setting up a manufacturing unit for wafer fabrication and others to be developed as FAB City (fabrication facility).

According to the MOU, the primary obligation of SemIndia was to establish the project and arrange finances over a period of four to five years.

Of the 1,200 acres of land earmarked for FAB City, 1,075 acres in Srinagar and Raviryal villages was notified by the Central government under sector-specific Special Economic Zone and certain incentives and concessions were granted to SemIndia for implementing the project.

Of these 1,075 acres, the Industrial and Infrastructure Corporation allotted 401 acres to 16 units between 2007 and 2011. Subsequently, the land allotted to seven units (117 acres) was cancelled and the possession of the land was taken back as the units did not come up.

The state government also cancelled and withdrew the incentives and concessions and other benefits given to SemIndia FAB City because of the poor implementation of the project.

The unproductive investment in infrastructure development in FAB City resulted in Rs 78.56 crore of public money being blocked. Further, the state government did not collect the lease premium, lease rentals and other dues from SemIndia FAB City, which resulted in another Rs 22.61 crore loss to the state exchequer.

The Comptroller and Auditor General has mentioned the FAB City issue in its latest report. Speaking to this newspaper, TS Industrial and Infrastructure Corporation managing director E. Venkata Narasimha Reddy said that FAB City has been limited to 400 acres and that 600 acres earlier allotted to FAB City has been taken back and converted into Electronics City. He said FAB City is a failed project and at present only four or five units have come up there.