Amaravati: The Andhra Pradesh government is considering a proposal to lease the Rushikonda buildings in Visakhapatnam to a hospitality operator, signaling a shift towards monetising the high-value beachfront assets while reducing the fiscal burden on the State.

Finance Minister Payyavula Keshav said the government was inclined to utilise the Rushikonda buildings in a manner that serves public interest, while generating steady revenue in line with regulatory norms. Along with Tourism Minister Kandula Durgesh, he mentioned that leading hospitality players, including Taj, Leela Palace, Atmos Core and FEMA, have evinced interest in the property.

The proposal was deliberated at the third meeting of a Cabinet sub-committee constituted to decide the future of the Rushikonda complex. The meeting was held on Wednesday at the Secretariat with Social Welfare Minister Dola Bala Veeranjaneya Swamy participating virtually. Senior officials from the Tourism Department presented technical and structural details of the palace to the panel.

Ministers said the existing structures were not entirely suited for hotel operations in their current form, and, therefore, suggestions had been made to add new constructions atop the existing buildings to make the project commercially viable. These options will be discussed further at an online Group of Ministers (GoM) meeting scheduled for December 28, after which final recommendations will be placed before the State Cabinet.

Keshav said the government was inclined towards a hospitality-led model, aligned with international beachfront development practices seen in destinations such as the Maldives and Puducherry. However, he underlined that Coastal Regulation Zone (CRZ) norms would be strictly followed. Of the nine acres of land below the hill, construction is prohibited on seven acres, leaving only two acres for possible use. The final two blocks of the buildings, he said, would be retained for public purposes such as an art gallery and cultural programmes.

Durgesh blamed the previous government for what he described as poor planning. He pointed out that revenue-generating resorts earning about Rs 7 crore annually were demolished to build the ‘palace’. The result, he said, was a “white elephant” that now costs the Tourism Department around Rs 25 lakh a month in maintenance.

A comprehensive survey of the Tourism Department’s land assets has been ordered, with officials saying a final decision on Rushikonda’s future use will be taken shortly, prioritizing financial viability and public access.