Andhra will use Swiss Challenge method to build Amaravati

Andhra will use Swiss Challenge method to build Amaravati

By S. RAMA KRISHNA | HYDERABAD | 25 June, 2016
China, Japan and South Korea are the likely bidders, apart from Singapore.

The BJP led NDA government has given its nod to Andhra Pradesh government’s request for adopting  the “Swiss Challenge method” for the fast-track development of its green field capital city, Amaravati.  After examining a few other existing models for developing the capital city, the AP government selected the Swiss Challenge method and a formal decision was taken at the Cabinet meeting held in Vijayawada on Friday. The Cabinet decision came only after obtaining the consent of the Union Urban Development Ministry.

Perhaps this is the first time that the Centre has allowed any state to go for the Swiss Challenge method in the infrastructure sector. The Union Urban Development Ministry led by M. Venkaiah Naidu, who hails from Nellore district in AP, is learnt to have played a key role in persuading the Centre, sources in the AP government told this newspaper.

Amaravati, which is spread over 8,623 sq km, requires Rs 25,000 crore in the next 10 years for its construction. The Centre has committed to allot around Rs 12,500 crore as part of its assurance in the AP Reorganization Act, 2014.

Under the Swiss Challenge method, the state government led consortium notifies a basic proposal from a developer and seeks bids from others who can perform better.

The AP government has invited bids from firms all over the world. AP Municipal Administration Minister P. Narayana told The Sunday Guardian that the Singapore consortium’s plan was widely publicised in Singapore, Japan, China and the UK. The bids will be accepted till 15 August, he said. 

As of now, the Singapore consortium has submitted its project and this will be treated as the basis for calling for other bids. There are indications that China, Japan and South Korea might bid for the same.

The Singapore consortium comprises two firms—30-year-old Ascendas Signbridge, which is a 16 billion US dollar company; and 18-year-old SembiCorp, a 5.5 billion US dollar company.

The AP government backed Capital Region Development Authority (CRDA) too will be a partner of the joint venture, called Amaravati Development Partner, with a 58:42 sharing. In the first phase of the core administration district, the consortium will construct buildings only on 6.84 sq km.

As per the basic proposal submitted by the Singapore consortium, the first 50 acres will be allotted to the joint venture at a nominal cost of Rs 2 lakh per acres, but the next 200 acres will be priced at Rs 4 crore per acre. Once the development is completed, the Singapore firms will have a share of 74.5% in the revenues, while the rest will be with the CRDA.

Meanwhile, Andhra Pradesh Chief Minister Chandrababu Naidu on Saturday handed over the residential and commercial plots promised to the farmers who offered their agricultural lands for Amaravati.

Under the government’s LPS scheme, people displaced of their land will be given residential and commercial plots within the capital city limits. On Saturday, at a function held at Tullur mandal in Guntur district of Amaravati, Naidu handed over certificates of 1,916 plots—1,167 residential and 796 commercial—to 847 farmers. The allotment was done through a lottery system. Meanwhile, the shifting of the capital from Hyderabad to Amaravati began from Thursday and the offices in the newly built Secretariat at Velagapudi will formally be opened between Monday and Wednesday. The State government employees who are shifting from Hyderabad were given six days of paid holiday—three days for searing houses and three days for settling in new offices. A government run canteen, NTR Canteen, was opened at the newly built Secretariat complex for the the employees and the public who throng there. The AP government has set up help desks to help its employees in finding homes and schools for their children in Amaravati.

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