AP looks to China, Japan cos for Amaravati capital

AP looks to China, Japan cos for Amaravati capital
Highlights

Andhra Pradesh government is actively in talks with various companies from China and Japan through governments there to mop up required funds for development of its Greenfield capital, Amaravati, near Vijayawada, according to P Narayana, Minister for Municipal Administration.

To use funds raised from them for creating roads, buildings

Hyderabad: Andhra Pradesh government is actively in talks with various companies from China and Japan through governments there to mop up required funds for development of its Greenfield capital, Amaravati, near Vijayawada, according to P Narayana, Minister for Municipal Administration. “Different people are discussing. China and Japan people are discussing with us.

They (the talks) are in initial stages. We are discussing with government to government. In those countries, governments join with (have stake in) private companies. Once we complete the discussions with governments, then we can move forward,” the Minister told The Hans India on the sidelines of the recent CII Partnership Summit in Visakhapatnam.

According to the Minister, the government is pursuing different financing models to raise funds from them. “We are looking for different models of finance. We are asking for PPP (public private partnership), annuity and BOT (build, operate and transfer) models,” he added, without giving quantum of funds that the government would raise from overseas.

The AP government will nonetheless use funds mopped up from these companies for construction of buildings and other infrastructure in the proposed Amavarati. “We will use the funds for building construction and infrastructure. We need to construct buildings for business and IT sectors, trade centres,” he said.

It is also willing to go for the PPP mode in case of roads as well. “We are also looking for PPP or annuity model for roads. “As you are aware, investors look for returns. As it’s not possible to have toll gates within the proposed capital, we may go for annuity model to attract funds for road projects. In the annuity model, we may have to pay back the funds over 20 or 30 year period,” he said.

The Minister further said that loans obtained from Hudco and Andhra Bank would also be used for infrastructure. The Housing and Urban Development Corporation Ltd (Hudco), a central government entity, inked an memorandum of understanding (MoU ) with AP government at the Partnership Summit to extend a loan of Rs 7,500 crore while Andhra Bank offered Rs 5,000 crore through similar agreement.

“These funds will majorly go into creation of infrastructure in and around Amaravati. For development to kick-start there, we need basic infrastructure such as roads, electricity, water and drainage system,” he said.

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