Hyderabad: In a scathing criticism of his predecessor Y.S. Jagan Mohan Reddy, who had stopped the building of capital Amaravati in 2019, Andhra Pradesh Chief Minister N. Chandrababu Naidu Wednesday said, it was “a case of one person destroying the future of coming generations”.
Releasing a whitepaper on the status of Amaravati — a grand, greenfield capital project for the state that Naidu had envisaged 10 years ago, following the bifurcation of Andhra Pradesh — the CM said that he will go all-out to re-engage firms in Amaravati’s construction, while admitting that it would be difficult to convince them after an unpleasant experience.
In his previous term from 2014 to 2019, Naidu had engaged various firms, from Singapore consortium companies to Hyderabad-based infra major NCC, to develop his brainchild Amaravati.
All work on Amaravati, located between Vijayawada and Guntur on the banks of River Krishna, came to a halt in 2019 after YSRCP chief Reddy took over as CM.
“If the original plan was carried out over the past five years, a world class capital for Andhra Pradesh would have been in place by now. It would have added Rs 2 lakh crore to the GDP, and 7 lakh jobs could have been created during construction,” said the TDP chief who again took over as CM last month.
Listing the estimated losses, Naidu said that Amaravati would have brought “Rs 10,000 crore income by way of state taxes every year with a 15 percent annual increment.”
Presenting the paper at the state secretariat, the CM added that property prices here would have shot up, and it would have led to wealth generation across the state.
“But today, there is not even one capital for Andhra Pradesh as Hyderabad ceased to be the joint capital (from 2 June),” he said.
The cancellation of work on the capital by the previous Jagan regime, Naidu said, has shaken the investors’ confidence and, as a result, the Amaravati brand image has suffered badly.
In 2019, Jagan “unilaterally announced that Andhra Pradesh will have three capitals in place of Amaravati”, and later, the G.N. Rao Committee, Boston Consulting Group Committee, and a Cabinet sub-committee were put in place to justify the decision already taken, said Naidu.
“This is a case of one person destroying the future of coming generations. This is a case study for the nation as to what happens when thoughtless decisions are made. We need to introspect if such persons should ever occupy a public office,” he added.
After Jagan’s announcement in 2019, farmers, who had parted with their land in 2015 for land pooling for the capital city, started demonstrations. The YSRCP government tried to control the protest by using violent methods. Their 1,631 days long protest ended on 12 June, (the day Naidu was sworn in), says the whitepaper.
“The Amaravati farmers’ struggle has gained a place in history. We will do justice to those facing police, court cases because of protests,” said Naidu.
The CM said the 2015 exercise was “largest land pooling exercise in the world,” which the “World Bank presented as a Case Study”. Around 34,400 acres of land was collected from 29,966 farmers.
The CM said that as construction activities restart, “we need to restore investor confidence, rebuild the brand image and resurrect the economy in order to boost Andhra Pradesh’s image and improve the people’s confidence.”
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Funds blocked, firms disengaged
The whitepaper cited the example of Singapore Consortium and Foster + Partners Consortium to explain how Naidu engaged firms, architects and consultants who were disengaged by the Jagan regime in 2019.
Singapore government firms prepared the Capital Region Concept Master Plan, Capital City Master Plan and Seed Capital Area Detailed Master Plan, free of cost, Naidu said.
In December 2014, the Infrastructure Corporation of Andhra Pradesh, and International Enterprises Singapore (IE Singapore) entered an MoU, engaging international private developers to build infrastructure in seed capital.
IE Singapore nominated Sembcorp Development Ltd. and Ascendas Pte. Ltd. (Singapore consortium) as a master developer of AP seed (start-up) capital area. The initial proposal for development of 16.9 sq km was later revised down to 6.84 sq km.
“In 2019, the MoU was cancelled with the Singapore consortium along with all agreements. Investment worth Rs 2,500 crore was lost due to this action,” said the paper.
UK based Fosters + Partners was engaged by the Naidu government for designing the iconic secretariat, legislature and high court buildings. The designs were approved in 2017.
“However, in July 2019, the consultants were informed that the state government is reviewing the capital development works and directed them to demobilise their teams engaged with CRDA with effect,” the whitepaper said.
“The consultants approached APCRDA and AP government numerous times on the status of projects and pending payments for the submitted work. No response was given. A letter was received from Fosters + Partners Consortium in 2020 for payment of pending fees. (Later) notice of arbitration of F+P regarding contracts was received. The dispute was settled with the appointment of an arbitrator by the Supreme Court and with a mutual agreement. The contract of Master Architect and Designer of Legislature, High Court and Secretariat & HoD Buildings was cancelled in August, 2023,” it added.
The total Amaravati project cost estimate in February 2019, when Naidu was in power, was given as Rs 51,687 crore. It included Tier I Infrastructure consisting of city-level roads utilities, village infrastructure of Rs 19,769 crore, Tier II infrastructure consisting of last mile connectivity, LPS layouts of Rs 17,910 crore and Amaravati Government Complex, along with essential infrastructure like BRTS, of Rs 14,008 crore. Total amount of debt financing was stated as Rs 37,112 crore, the paper said.
“Tenders were called for a value of Rs 41,170 crore, out of which all works were grounded. Rs 4,318 crore amount was paid and Rs 1,269 crore has to be paid as on date,” it added.
Naidu set up Andhra Pradesh Capital Region Development Authority (AP CRDA) in 2014 for execution of the mammoth project. The body was mobilising finances from various sources, agencies and also through bonds.
In February 2019, TDP regime negotiated with World Bank, AIIB for a loan of 500 million USD for Infrastructure development in capital city.
However, YSRCP minister of municipal administration and urban development in a letter to the government of India in July 2019 stated that there have been certain irregularities and that their government is conducting a thorough probe while requesting the department of economic affairs “to take an apt call on further course of action.”
Moreover, while the Centre had promised Rs 2,500 crore for initial infrastructure works, as on May 2019, only Rs 1,500 crore have been released. The balance of Rs 1,000 crore was not released as recommended by NITI Aayog due to a complaint written to the finance ministry by the YSRCP government, the Naidu administration said in the paper.
Because of Jagan’s deeds, the credit ratings of Amaravati bonds got negatively affected. We have to deal with cost escalation and damages to the structures — official residence buildings half complete and foundations of iconic secretariat, high court etc. inundated with rain waters the last few years, said the CM.
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