Amaravati start-up area project yet to gain pace

VIJAYAWADA:On June 7 this year, Singapore minister S Iswaran, while signing the Shareholders Agreement (SHA) and Concession and Development Agreement (CADA) with the State government for the development of start-up area in Amaravati, expressed confidence that a significant progress in capital construction would be achieved in six months.

He, in fact, announced that the zero day of Amaravati’s development had begun. However, over four months have elapsed, but the proposed project is yet to gain momentum.

While the administrative procedures, including the finalisation of General Power of Attorney (GPA) between the stakeholders for project execution, permits for channeling foreign funds and others are some reasons for the slow progress, speculation is rife that the Singapore Consortium -- Ascendas-Singbridge and Sembcorp Development -- is in a wait-and-watch mode since the elections, which may result in a change in the government, are around the corner. 

For the uninitiated, the Singapore Consortium, through its joint venture entity Singapore Amaravati Investment Holdings (SAIH), formed Amaravati Development Partners (ADP) with Amaravati Development Corporation Ltd (ADCL) to develop about 1,691 acres of start-up area in three phases. While the SAIH owns 58 per cent stake in the ADP, the ADCL has 42 per cent stake. The start-up area is aimed at kickstarting the economic activity in the new capital.

According to sources, the ADP is supposed to start the development of ‘Catalytic Phase’ in about 50 acres of land as a prelude to the actual development. However, the ADP, which has Singapore Consortium as the major stakeholder, is yet to purchase the land. “The ADP is still in the process of purchasing the 50 acres of land to start the development of Catalytic Phase. While a consensus has to be reached with respect to the General Power of Attorney on the landholding rights, other administrative procedures are underway.

There is also a sense of apprehension as there maybe risks with the elections coming up,” a source explained. Another reason for the delay is said to be the identification of land for the start-up area. A part of the land identified by the APCRDA falls in the river bund area, against which the Singapore Consortium has reservations due to the environmental norms in place. However , the APCRDA is ready to show alternative piece of land to the Singapore Consortium.

The ADCL, the other stakeholder of the ADP, in the meantime, is pro-actively finalising the pending administrative procedures. In the last four months, the ADP has finished the tender process for bringing on board various consultants for the preparation of master plan. “The architects for the master plan have already been picked and the works are underway. The Singapore Consortium is ready to purchase land and we are in the process of attaining closure for the deal. The discussions are at an advanced stage and we expect that the development will begin by the end of this year,” ADCL CMD D Lakshmi Parthasarathy said.

Project in a nutshell
A commercial area, including convention centres and others, aimed at triggering the economic activity in the new greenfield capital of AP
Total extent - 1,691 acres
Location - In and around Rayapudi and Lingayapalem villages
Catalytic Phase:  
 50 acres
Phase 1:
 656 acres
Phase 2:
514 acres
Phase 3:
521 acres
Each phase of development is expected to take about five years