AP government, Singapore consortium end Amaravati capital city start-up area project

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Hyderabad | Published: November 13, 2019 3:04:26 PM

The trade and industry ministry of Singapore announced that it has noted the decision of the Andhra Pradesh government to close the Amaravati capital city start-up area project.

The closure of the project comes even as a committee set up by the Andhra Pradesh government to study projects in Amaravati is to submit its reports.

The trade and industry ministry of Singapore announced that it has noted the decision of the Andhra Pradesh government to close the Amaravati capital city start-up area project.

The consortium, which includes companies such as Ascendas Singbridge Pte and Sembcorp Development, was appointed in 2017 to develop a 6.84-sq km start-up area in the new capital.

In a statement, the Singapore government said the project has been shut down on “mutual consent” between the state government and the Singapore consortium comprising Ascendas Singbridge, and Sembcorp Development. The consortium said they have lost a few million dollars, but agreed that they understood the risks involved while venturing into overseas markets and have factored them in their investment decisions.

“The Singapore consortium was appointed by the government of Andhra Pradesh in 2017 to help master develop the 6.84 start-up area of its new capital city Amaravati. We note that the newly-elected government of Andhra Pradesh has decided not to proceed with the start-up area, given its other priorities for the state,” Singapore government’s minister-in-charge of trade relations S Iswaran said in a statement referring to the orders issued by the AP government.

The closure of the project comes even as a committee set up by the Andhra Pradesh government to study projects in Amaravati is to submit its reports. Retired IAS officer GN Rao is heading the committee, which is looking into urban planning and possible relocation of the capital. “There was no intended development in the Start-Up Area despite signing of concession and development agreement (CADA) and the shareholder agreement on June 7, 2018 and also completion of conditions precedents as per clause 4.3 of CADA from the state government to the extent possible. Further, the objective of concept of start-up area has not served its intended purpose since the GPA is not yet signed by the ADP,” the state government stated, giving out reasons for scrapping the project in its order.

Prime Minister Narendra Modi had laid the foundation stone for Amaravati in October 2015. In 2017, the AP government and the Singapore consortium had established a multi-layered partnership structure for the development of Amaravati Capital City Start-Up Area Project with the latter holding a 58% stake and the state government retaining 42% in the project. Following the termination of the project, which was signed by the previous Andhra Pradesh government led by N Chandrababu Naidu, there is a huge outcry by the farmers who had given up their land for the capital construction. In July this year, World Bank cancelled a $300-million loan for projects in Amaravati and Asian Infrastructure Investment Bank cancelled a loan proposal of $200 million in the same month.

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