VIJAYAWADA: A day after the YS Jagan Mohan Reddy dispensation’s order to drop the Amaravati Start-up area development project, the Singapore government issued a statement on Tuesday noting the decision of the Andhra Pradesh government and stated that the closure was done on the basis of mutual consent between the stakeholders. Following the statement from the Singapore Ministry of Trade and Industry, the State government too issued a similar press release and added that the project was called-off after the Singapore Consortium could not give a satisfactory answer when asked about the benefits Andhra Pradesh would get out of the Start-up area development.
Stating that the closure was done on a mutual consent basis between Singapore Consortium -- Ascendas Singbridge Pvt Ltd (now part of CapitaLand Group) and Sembcorp Development Ltd -- minister-in-charge of Trade Relations S Iswaran said, “We note that the newly elected government of Andhra Pradesh has decided not to proceed with the Start-Up Area given its other priorities for the State. Companies recognise such risks when venturing into any overseas market and factor them into their investment decisions. In this instance, the Singapore Consortium companies have stated that the project has cost them a few million dollars, and that its closure does not impact their investment plans in India. Singapore companies remain interested in opportunities in Andhra Pradesh and other Indian states because of the size and potential of the market.”
It maybe recalled that the previous TDP government had signed an agreement with the Singapore Consortium in June, 2018, for the development of 6.84 sq km Start-up area in the presence of S Iswaran in Vijayawada.
In another statement, the Singapore Amaravati Investment Holdings (SAIH), which formed Amaravati Development Partners (ADP) with Amaravati Development Corporation Ltd (ADCL) for the implementation of the project, said that the project development was no longer ‘feasible’. “Following the change in scenario for the development of Amaravati Capital City, it is no longer feasible to develop the Amaravati Capital City Start-up Area as originally planned. Therefore, our joint development company Amaravati Development Partners (ADP) and the State Government of Andhra Pradesh have mutually agreed to terminate the project... As the project is still at its early stages and the land in the Start-up Area has yet to be made available to ADP for development, costs incurred are limited to design services prior to commencement of execution works on the ground, amounting to a few million dollars.”
However, the State government too quickly backed its decision to drop the project saying that the project was called off as the Singapore Consortium could not give “a convincing reply to the genuine concerns of the State”.
Minister for Municipal Administration and Urban Development (MAUD) Botcha Satyanarayana said in a statement that the project was called-off with mutual consent after there was no satisfactory answer to the concerns raised.
“Our concerns were expressed when we have asked the Singapore Consortium about the benefits the state would get out of the project and why the delay in the project. How the state will benefit out of the project, was the genuine concern we have expressed and a satisfactory reply was not forthcoming,” Botcha 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 a great concern to us, he added.
The minister further noted that the Consortium did not undertake tangible work in the last four years while it could be seen that other educational institutions like VIT, SRM and Amrita had utilised the land allotted to them for the intended purpose.
“The government wants development and growth on a fast track which was found wanting, and hence has decided to close the issue and it was done on mutual consent,” Botcha concluded.
ADP will undergo liquidation, discharge all liabilities
To TNIE’s query on the investment made by the Singapore Consortium and if there was any compensation sought in the wake of “a few million crores” being spent on the project, a representative from the Amaravati Development Partners said, “The ADP will undergo liquidation on a mutual consent basis and discharge all liabilities such as, office set up costs, other expenses, and provisional winding up costs before initiating the process in accordance with the government order. The third party payments are primarily the costs incurred for design services prior to commencement of execution works.” Since the closure of the project is being done on mutual consent, there is no compensation aspect. Sources said that the expenditure spent by Singapore would be to the tune of `7 crore
