Amaravati Is anything amiss?

As elections are just only a year away, the Telugu Desam government is under pressure to convince the people that construction of greenfield global city Amaravati is on course.

This has become all the more important with devil’s advocates arguing against the wisdom of construction of the capital city after destroying lush green farmland on Krishna river bank while the TDP’s political opponents, chiefly the BJP, making derisive comments that though it is four years now, not even one brick has been laid for its construction.

BJP chief Amit Shah had indicated that Amaravati was only an illusion since the government was nowhere near commencing the work, though the Centre had released Rs.2,500 crore.

Naidu, while damning Amit Shah for refusing to see the work that had been done in the background for commencement of the construction of capital, despite the Centre remaining cold to the state’s plea for hand-holding, gave it back to him in equal measure saying that of the 2,500 core, Rs 1,000 crore was meant for construction of drains in Vijayawada and Guntur and that his government had submitted utilisation certificates for the funds spent.

Even as he slugged it out with BJP, Naidu has to reckon with those who are opposed to construction of Amaravati on Krishna river bank, who lose no opportunity in going to town, telling the people how the government in the name of development was systematically destroying the already fragile eco-system for raising a concrete jungle.

But Naidu, undeterred by the opposition, is going ahead with the construction of Amaravati. Naidu at a recent meeting of the CRDA, cleared the proposal of commencement of work immediately in the start-up area of 1,691 acres (6.84 sq km) which happens to be part of the most fertile agriculture land in the area close to the right bank of the Krishna river.

Accordingly the CRDA, acting on behalf of the state government, is getting ready to sign an agreement, giving draft general power of attorney (GPA) to Amaravati Development Partners Pvt Ltd (ADPPL), a Special Purpose Vehicle (SPV), that has been formed with Amaravati Development Corporation Ltd (ADCL) and Singapore Consortium comprising Ascendas, Singbridge Pvt Ltd and Sembcorp Development Ltd – the original project proponent which had been finalised for construction of Amaravati after international bidding through Swiss Challenge Method.

The APCRDA contends that the GPA will only entail the right to the SPV to develop land after raising loans from banks by mortgaging it, and market them commercially. The SPV, after developing the land, will show the buyer but the final decision on this issue rests with CRDA. The Singapore Consortium will have 58 per cent stake in the SPV while the ADCL will have 42 per cent stake.

Though it looks quite alright on the face of it if you keep the concerns of environmentalists away for a while, there are certain areas on which the government has not come out with any explanation, like bringing to the fore the SPV, while about a year ago ADC signed an MoU with the Singapore Consortium for commencing works in the start-up area.

Former Agriculture Minister Vadde Sobhanadreeswara Rao, who keeps a track on the developments on Amaravati construction, demands that the terms and conditions be spelt out. “The government should come clean as to why SPV is being floated which was not the case earlier. I doubt if the Singapore Consortium, to play safe, had brought pressure on AP government for the creation of SPV so that it can profit maximum with very little nor risk at all,” Sobhanadreeswara Rao says.

For him, the entire exercise appears to be inimical to the interests of the people. “The start-up area of 1,691 acres is fertile land which soon would become a concrete jungle. This apart, the government is investing Rs 5,500 crore on the creation of infrastructure in the start-up area. Then the government’s investment in the SPV would be of the order of Rs 221 crore, apart from providing the land for the start-up area.

After doing all this, it is getting only 42 per cent share in the company while the Singapore Consortium would invest only Rs. 331 crore which would most likely be loans raised from banks by mortgaging the land. But it would get 58 per cent share. The government even agreed to stand guarantee for the SPV to raise loan if the land that it provides is not adequate guarantee to the bankers. Even a kid would say that the terms and conditions are loaded heavily against Andhra Pradesh,” he said.

Sobhanadreeswara Rao smells a rat in the proposal to create a management company which would get two per cent of the revenue that accrues to the SPV on the sale of flats and plots. “This is a 100 per cent Singapore company. I wonder why the government is prostrating before Singapore companies for raising buildings in the start-up area,” he said and disapproved of the move to raise the level of the land for a change in alignment in three villages to that of the embankment of the Krishna river. H says it is not only against Environment Protection Act but also a violation of the directions of the National Green Tribunal. “Why does the state government go to this extent to benefit Singapore companies?” he asks.