Both the World Bank and the Asian Infrastructure Investment Bank decided not to fund the Amaravati project, which had earlier committed $500 million to it.
Once touted to become a world class city, Amaravati is unlikely to continue as the capital of Andhra Pradesh. The reasons being cited include severe fund crisis, change the decision of former chief minister N Chandrababu Naidu and gain votes of those farmers who had given up 33,000 acre.
On a technical note for change of capital, the government has hinted that it is because of flood-prone areas in and around the Amaravati region. The decision is pending as chief minister YS Jagan Mohan Reddy is on a personal visit to the US and is expected to be back during the weekend. However, the probabilities are more for change in capital as there is a review of all land projects which were signed in the last five years.
According to sources in the chief minister’s office, the state government has prepared a detailed feasibility report for a new capital city. “We have submitted a report to the government for a new location. It will go through detailed analysis by various departments. We do not want to announce the location in order to avoid insider information among party members, which could lead to a hike in land prices,” a senior bureaucrat said on condition of anonymity.
However, local reports say the new location will be in the Krishna-Guntur district and not very far away from Amaravati. So, all construction activities have been stopped in the city.
While the cost of capital construction was estimated at Rs 50,000 crore for the first phase, the contribution from the Centre was only Rs 1,500 crore. Both the World Bank and the Asian Infrastructure Investment Bank decided not to fund the Amaravati project, which had earlier committed $500 million to it.
“We approached the central government for funds but there is no sign of funds coming in,’’ the official pointed out. Hence, the government is planning to decentralise and have minimum buildings and look at e-governance in a big way with lesser interference,’’ he said. Incidentally, the state government has ordered a probe into the alleged corruption in land pooling and the contracts and the state has allocated a mere Rs 500 crore for capital construction.
“The Sivaramakrishna Committee pointed out that Amaravati is not a safe place to be the capital city. Many areas in the capital region are flood-prone,” Botsa Satyanarayana, minister of municipal administration and urban development, said. “We have found that it is going to be a costly affair to construct flyovers, buildings and other huge structures. A lot of public money is being wasted there. People’s money has been misused by the previous TDP government. The expenditure on the construction process in Amaravati is more when compared to other regions. We will review and take a decision,” the minister said.