VIJAYAWADA: In what could be a major setback to Andhra Pradesh’s ‘capital dreams’, the World Bank has decided to withdraw its commitment to extend a loan of $300 million sought by Chandrababu Naidu’s TDP regime for the development of the new capital.
Without specifying any reason, it has revised the status of Amaravati Sustainable Infrastructure and Institutional Development project to ‘dropped’ from ‘pipeline’.
This puts a question mark over the fate of Amaravati as the World Bank’s move may also affect the Asian Infrastructure Investment Bank’s commitment to co-finance $200 mn more. Reply to an email sent to the World Bank representatives on the development is awaited.
When contacted, Andhra Pradesh Capital Region Development Authority (APCRDA) Commissioner Dr P Lakshminarasimham told TNIE that there was no official communication from the bank yet. The previous TDP government, with its ambitious plan to develop Amaravati with a whopping Rs 1.09 lakh crore, applied for World Bank’s assistance in 2016.
Initially, the then State government sought $1 billion in January, 2016, only to revise it after four months to $500 million. But, in May, 2017, the application ran into trouble with a few farmers writing to the Inspection Panel of the bank alleging irregularities in procurement of land for Amaravati. The application had been on hold ever since. Last month, the APCRDA claimed the process reached the final stage, pending a few procedural steps.
The World Bank’s decision may have serious financial implications for the APCRDA as it is likely to create a trust deficit among the stakeholders, especially investors who have already expressed concern over the new government cold shouldering the capital project. However, civil society groups such as the Working Group on International Financial Institutions (WGonIFIs) and the National Alliance of People’s Movements (NAPM) welcomed the decision.
“We are happy that the World Bank took cognisance of the gross violations involved in Amaravati capital city project, threatening the livelihood of people and fragile environment. After Narmada and Tata Mundra, this is the third major victory against the World Bank group,” activist Medha Patkar, who earlier toured Amaravati and lent support to farmers, said in a statement Thursday.
Trouble is brewing for Amaravati on another front too.
Though the YSRC government has been insisting that it will develop Amaravati, the perception is that of a widening gap between its words and deeds. Representatives from Singapore, who had earlier signed a pact with the State government for the development of the Start-up area in the capital region through the Singapore Consortium, met Chief Secretary LV Subramanyam and APCRDA heads on Wednesday to seek clarity on the fate of the project.
Sources said the Andhra Pradesh Capital Region Development Authority (APCRDA) officials informed them that they too were awaiting a direction from the State government. It is learnt that the Singapore delegation wasn’t amused. It was their first high-level meeting after the YSRC came to power. Sources said the Jagan government hadn’t contacted them and instead, sent feelers, which the Singapore side didn’t reportedly entertain.
The Singapore Consortium -- Ascendas-Singbridge and Sembcorp Development -- partnered with Amaravati Development Corporation Ltd (ADCL) to form Amaravati Development Partners (ADP) in June, 2018. As per the agreement made under Swiss Challenge method, the ADP, in which ADCL holds a minor stake of 42 per cent and Singapore Consortium 58 per cent, will have to develop 1,691 acres of Start-up area in three phases.
The Singapore Consortium would solely be responsible for bringing in investors and developing the land given by the State government. The Swiss Challenge method drew strong criticism from various sections when the TDP government proposed it. However, the previous government went ahead with its decision for Start-up area development in partnership with Singapore Consortium.
For the record, the Jagan government maintains that it is committed to develop Amaravati. Even on Thursday, Municipal Administration and Urban Development Minister Botcha Satyanarayana asserted the same in the State Assembly but with a rider that it would be done “keeping in mind local aspirations and State’s finances.”
Responding to a question if works in the capital were stalled, he clarified that most works have not achieved 25 per cent progress.
“Of the 68 works worth Rs 35,847 crore, only 10 have crossed about 50 per cent progress. Since the State government took a decision to stop all works with less than 25 per cent progress, they were stopped. A committee has also been constituted to review the works. We will take a decision on the projects after the committee gives its report,” he said.
However, he quickly added, “We agree that our State needs a capital and we will develop one. We need a capital which is best in India, not the world. We also have to bear in mind our financial position.” In effect, as far as the stakeholders are concerned, the ambiguity continues.
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