Amaravati capital project in Andhra finally scrapped

HYDERABAD: Investors and people of Andhra Pradesh have received a big jolt with the new capital project of Amaravati finally being scrapped

Updated At : 12:37 AM Nov 13, 2019 IST

The World Bank and the Asian Infrastructure Investment Bank pulled out of the project in July this year.

Naveen S Garewal
Tribune News Service
Hyderabad, November 12

Investors and people of Andhra Pradesh have received a big jolt with the new capital project of Amaravati finally being scrapped.

The Singapore Consortium and Andhra Pradesh have called off the deal to build the Amaravati Capital City start-up Area project after the government did not get a convincing reply on “concerns of the State”.

The Telugu Desam Party (TDP) released the letter from the Singapore Consortium today saying that it was pulling out of the Amaravati project with mutual consent but was still keen to invest in other projects in India despite suffering a loss due to already made investments.

The World Bank (WB) and the Asian Infrastructure Investment Bank (AIIB) pulled out of the project in July this year.

The AIIB had committed to co-finance $200 million (Rs 1,400 crore) along with the World Bank, which was to provide $300 million (Rs 2,100 crore) for the project. But after the newly-elected YSR Congress Party (YSRCP) showed reluctance in going ahead with the new state capital project, the two funding the project withdrew their financial support.

After the TDP raised the issue pertaining to the former chief minister and TDP president N Chandrababu Naidu, yet once again, the AP minister for Municipal Administration and Urban Development, Botsa Satyanarayana said the project was called off with mutual consent after there was no satisfactory answer to the concerns the state had raised, countering the charges by the Singapore Consortium.

He said there was no progress in the required measure and set parameters in the capital area region. “We were concerns over certain issues and when we asked the Singapore Consortium (comprising Ascendas SingbridgePte Ltd and Sembcorp Development Ltd) about the benefits the state would get out of the project and why the delay in the project. There was no satisfactory response”, so the state called off the project.

He said the work has not begun in the desired pace in the start-up area and other basic formalities were not completed which is of great concern to the state government. He went on to say that during the past four years, it was noted, that the Consortium did not undertake tangible work while it could be seen that other institutions like VIT, SRM and Amrutha had utilised the land allotted to them for the intended purpose and colleges were built during that period.

The government wants development and growth on a fast track which was found wanting and has decided to close the issue and it was done on mutual consent.

Meanwhile, the Ministry of Trade and Industry Singapore issued a note today saying “the Singapore Government notes the decision by the Government of Andhra Pradesh to close the Amaravati Capital City Start-up Area project via a Government order dated 11 November 2019. The closure is based on mutual consent between the Government of Andhra Pradesh and Singapore Consortium”.

The note adds that the project has already cost the Consortium a few million dollars, but the closure does not impact its investment plans in India.