AMARAVATI: The Amaravati Start-Up Area Development Project has formally been scrapped with the Andhra Pradesh Cabinet on Wednesday deciding to terminate the agreement with a Singapore consortium.
The project which envisaged development of the start-up area in the state’s capital city remained a non-starter in the last 30 months since the previous Chandrababu Naidu government signed a memorandum of understanding with the Singapore consortium, raising doubts over its prospects, particularly with a change of guard in the state.
The state Cabinet that met here under the chairmanship of Chief Minister Y S Jagan Mohan Reddy took a decision to terminate the agreement with the consortium, Information and Public Relations Minister Perni Venkata Ramaiah (Nani) said.
The Amaravati Start-Up Area Development Project was the firstmajor real-estate venture that the previous TDP government had undertaken under the Public Private Partnership mode and selected theSingaporeconsortiumof Ascendas-Singbridge andSembcorpDevelopment through the controversial Swiss Challenge method as the Master Developer.
The then government signed a memorandum of understanding with the Singapore consortiumon May 15, 2017 for executing the project in a 6.84 sq km area (1,691 acres) in three phases over 15 years.
The project, however, never looked to take off.
The land allotted for the purpose was stuck in an ecological-legal tangle as 170 out of 1,691 acres was right on the river bed.
Since no development activity was permitted in that portion of land, as per River Conservation Act and also the National Green Tribunal orders, the consortium sought alternative land, official sources said.
For this, changing the core capital Master Plan was the only option. The then TDP government tried to alter the Master Plan but it never happened as several Central government organisations and also some private companies were allotted land. Thus the Start-Up project could not take off,” a senior official involved with the project said.
The consortium was to partner with a state government entity, Amaravati Development Corporation, through a special purpose vehicle Amaravati Development Partner (ADP).
The Singapore consortium was to put in Rs 306 crore as its equity (58 per cent) and the ADC Rs 222 crore (42 per cent) in the SPV.
The ADP was to spend Rs 2,118 crore for creation of basic infrastructure like roads, water supply, drainage and electricity and subsequently transfer the infrastructure to the Capital Region Development Authority.
At that time, the Chandrababu government announced that in the first phase, real estate would be developed in 656 acres of land in the start-up area and 8.07 lakh sft of building space created in three years.
The previous government had also announced that 1.25 lakh families were expected to settle in the new capital in the next 15 years as 2.50 lakh jobs would be created.
The start-up area, once developed, was expected to contribute 1.15 lakh crore to the state’s gross domestic product and generate revenue of Rs 8,000 crore to Rs 10,000 crore to the government in different taxes.
Source: Press Trust of India