Amaravati Capital Project: Andhra Pradesh now turns to the Center for Funds
The World Bank having abandoned its plan to lend 300 million dollars for the expansion of the capital of Amaravati, the government of Andhra Pradesh has decided to suspend all work due to lack of funds and is likely to contact the Center. for additional project funding. “This (the action of the World Bank) will not affect future construction activities, as we can always contact the Center for the release of funds,” a senior official in the finance department of the Bank told FE on Saturday. State. The State is counting on a quota of unused funds due to it, which has not yet been released by the Center.
Srikanth Reddy, leader of the ruling YSR congressional party and party spokesperson, also told reporters after the World Bank’s withdrawal was announced: “The state government must follow a proper process, which we suspect was not done under Chandrababu Naidu. They just created a hype around the capital without a proper plan. But we want to continue the project in the interest of the people of the state. We will discuss with the Center for the financing of the project.
However, the state has a huge debt burden to pay off. “The authorities have already been ordered to suspend all works that have not yet started and no new construction will be undertaken. This decision comes as a setback for thousands of farmers who had donated their land for the construction of the capital. It’s also a big shake up for the state’s real estate sector, ” the finance department official said.
“We understand that the AP government is considering rescinding work orders issued by April 1,” said an official at NCC Ltd. “If this were to happen, work orders totaling around Rs 6,100 crore issued to our company (including projects other than Amaravati) will likely be canceled by the state government,” the official added.
The total cost of the Amaravati sustainable infrastructure and institutional development project is estimated at $ 715 million or 4,922 crore, of which the World Bank has pledged to lend $ 300 million or 2,066 crore rupees. The government’s Jagan Mohan Reddy-led white paper on state finances cited a total outstanding debt of Rs 258,000 crore.
Meanwhile, the Andhra Pradesh Capital Region Development Authority (APCRDA), the nodal agency for the investment project, said it had not received any official communication from the World Bank. In fact, the APCRDA had issued an Amravati bond, which was oversubscribed a record 1.53 times, raising Rs 2,000 crore. According to the APCRDA, the money collected through the bonds would be used for the development of infrastructure in the capital.
Earlier, State Finance Minister Buggana Rajendranadh Reddy said when the white paper was released: “We will consider the construction of the capital when our government is able to pay Rs 32 crore per kilometer. of road. We cannot continue the work of the capital by ignoring priority sectors such as education and health. “
However, the escalation of the political war and blame game between former Chief Minister N Chandrababu Naidu and current CM YS Jagan Mohan Reddy will only put a question mark on the future of more than 3 lakh farmers who gave up their land as part of the land pool system for the city. Moreover, Naidu’s high promises on employment to farmers or plots in exchange are far from being reality. Compensation for these farmers is also a mystery.
While Naidu alleged that Jagan Reddy did not send positive signals about the project to the World Bank’s inspection team, the current government alleges that Naidu and his accomplices profited from insider trading during of the announcement of the capital, because they had prior information about the soaring property rates. . The YSR Congress Party has now formed a subcommittee to investigate alleged irregularities in the draft, which is expected to be released next week.