CAPITAL CHAOS
Cancelled projects, allegations of irregularities and, now, the Jagan Reddy government’s talk of redefining the state’s priorities—has the Amaravati city project hit a dead end?
With the Jagan Mohan Reddy government developing cold feet, is the Amaravati city project dead?
On September 13, more than three and a half months after taking charge, Andhra Pradesh chief minister Y.S. Jagan Mohan Reddy set up a fivemember committee of urban planners and architects to formulate, within six weeks, a ‘comprehensive development strategy’ for the state and review ongoing projects, including the in-theworks capital of Amaravati. Reddy’s move came within weeks of urban development minister Botcha Satyanarayana’s remarks that the financial burden of constructing the new capital was exorbitant and its location floodprone. “The previous government had allotted expensive land in Amaravati at a lower price and demanded kickbacks,” alleged Satyanarayana.
With the Reddy government developing cold feet—work came to a halt in June—uncertainty looms over Amaravati, a 217 sq. km city envisioned on the banks of the Krishna river in the state’s Guntur district. Telugu Desam Party (TDP) chief and former chief minister N. Chandrababu Naidu’s Rs 1.09 lakh crore ‘dream capital’, which was to have modern public transport, sprawling green spaces, water bodies and mini cities, is anathema to Reddy. Going by the new chief minister, Andhra has neither the resources nor the need to build a new capital. The ruling Yuvajana Sramika Rythu Congress Party (YSRCP) even alleges that insider knowledge helped those close to the TDP bag prime land and projects in Amaravati and make illegitimate gains.
“Unlike development, dismantling does not take long. Brand-building of something like Amaravati takes time,” says Naidu ruefully. “We had hoped to nurture the city as a self-financing project.” In 2014, the Naidu government had sought Singapore’s help to create the masterplan for Amaravati. It was to be developed using green and sustainable solutions, through a joint venture between a Singapore consortium, led by Ascendas-Singbridge and Sembcorp Development, and the Amaravati Development Corporation, an Andhra government entity.
Now, Singapore is preparing to pull out after the World Bank and the Beijing-based Asian Infrastructure Investment Bank (AIIB) announced they would not fund the project. Singapore foreign affairs minister Vivian Balakrishnan said on September 9 that Andhra is reviewing the masterplan.
Officials say on condition of anonymity that the contours of the capital would be redrawn before work resumes in 2020 as Reddy is pushing for the development of other urban centres, including the backward Rayalaseema region he belongs to.
If the Amaravati project is eventually shelved, a major casualty would be the model of acquiring farmland for urbanisation, under which farmers hand over land in return for annuity and a portion of the surrendered land is returned to them as an urban parcel of far greater value than their original plot. For Amaravati, over 28,000 farmers surrendered over 33,000 acres in the Mangalagiri-Guntur region. Many of them are now worried because under the land-pooling agreement, the state is supposed to pay them a monthly income for 10 years and allot a developed plot for every acre of land surrendered.
Satyanarayana assures all promises made to the farmers will be honoured. His government, though, has cancelled works that were sanctioned by the TDP regime without having the finances in place. In December 2018, ahead of the Lok Sabha and assembly elections, the Naidu government invited tenders for projects worth Rs 35,800 crore. “They did not raise funds from banks or other institutions for the projects,” says Satyanarayana. “Our government had to cancel tenders for the works that were yet to begin. We are also examining some ongoing projects with the objective of saving public money and will initiate action in case of irregularities.”
With the Amaravati project in limbo, bills totalling over Rs 2,800 crore are pending with the Andhra Pradesh Capital Region Development Authority (APCRDA). Among those who suffered are land investors as rates in Amaravati have dropped by half, from Rs 40,000-45,000 per sq. yard to Rs 20,000-22,000. Real estate sources claim projects worth Rs 10,000 crore are facing a slump.
The cash-strapped Reddy government will need new funding agencies and at least Rs 1 lakh crore to complete projects initiated by the earlier government. The AIIB had agreed to fund infrastructure for drinking water, power, roads and drainage. Among the incomplete projects is a six-way arterial road connecting Amaravati to national highway 16, which is part of the Golden Quadrilateral from Kharagpur in West Bengal to Chennai. “We don’t have money to build a city. Our priority is to raise the standard of living, provide equitable development and create infrastructure for manufacturing,” says finance minister B. Rajendranath Reddy.
Political observers claim that by downsizing the Amaravati project, the chief minister wanted to cut the Kamma community, which backs Naidu and the TDP, to size and expand the hold of the Reddys. “Jagan Reddy and his colleagues seem to be keen on liquidating the political and caste base of Chandrababu Naidu and the TDP. What cannot be glossed over, though, is that the enterprising Kammas are shrewd in managing the Reddys in power,” says Prof. A. Prasanna Kumar of the Centre for Policy Studies, Visakhapatnam. However, Ravi Komarraju, former political science professor at the city’s Andhra University, says: “Jagan Reddy is having a relook at how to go about Amaravati. Six months is hardly enough to set right the finances and launch new programmes. Things may take shape by January.”
Hyderabad-based political analyst C. Narasimha Rao holds out hope. “When Amaravati evolves finally, after the current state-imposed setbacks, it will make a mark with high-capacity human resources and entrepreneurship. The world over, development remains city-centric and Amaravati alone can fulfil Andhra’s needs.” ■