Way back in 2008, YSR-led Congress Government sanctioned 4,371 acres to Navayuga Engineering's sister concern Krishnapatnam Port Infrastructure Limited (KPIL) for the creation of Special Economic Zone near Krishnapatnam in Nellore District. The actual plan was to establish chemical factories, food processing industries, automobile plants and IT/ITES for generating massive employment opportunities. However, KPIL failed to show any progress what-so-ever in the past decade but obtained loans to the tune of Rs 2,000 crore mortgaging these lands.
AP Industrial Infrastructure Corporation (APIIC) issued orders to take back the 4,731 acres of land allotted for KPIL with immediate effect. It even treated the amount paid by KPIL to APIIC as a penalty for not honouring the agreement.