The Singapore consortium, which has taken up the construction of many buildings and mini-cities of the Andhra capital, is hesitant to go ahead in view of the TDP government’s strained relations with the BJP-led Central government.


Amaravati, an ambitious mega city capital of the newly carved out Andhra Pradesh under Telugu Desam Party (TDP) Chief Minister N. Chandrababu Naidu, is slowly turning into a financial burden, thanks to the absence of any additional allocation of funds from the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government at the Centre. This project is becoming an albatross around Naidu’s neck ahead of next year’s general elections.

Naidu’s latest decision to raise funds from the market by issuing different types of bonds at interest rates as high as 10.32% has resulted in a fresh round of controversy, as the Opposition YSR Congress and BJP have objected to it, saying that the debt burden would be huge and unmanageable in the coming years. The Centre, which has so far given Rs 2,500 crore, has sought more clarifications on the capital city.

The TDP government has adopted an innovative Land Pooling Scheme (LPS) for acquiring around 32,000 acres of land along the banks of river Krishna in Guntur district, as the capital city is located between Vijayawada and Guntur cities. However, another 2,000 acres from three villages along the National Highway between Kolkata and Chennai are still to be acquired from farmers.

As these farmers are demanding higher compensation than what was promised to those who signed for the LPS, the government is compelled to give notices to them under the 2013 land law. As the three crucial villages in Undavalli mandal are situated along the National Highway, the unrest here is snowballing into a major state-level issue.

The woes of construction of the capital city, that have been latent all these four years, came into the open once the TDP pulled out of the ruling NDA government in March this year, in protest against the alleged discrimination of the Centre against Andhra. The Centre stopping its patronage has prompted Naidu to scout for other sources of funding to sustain the construction of the capital.

As on 23 August 2018, the Andhra government’s statutory body, the Capital Region Development Authority (CRDA), has cleared as many as 32 projects worth Rs 26,000 crore. These are part of a total of over 56 projects worth of Rs 48,115 crore, in the first phase of the capital city construction, which was supposed to be over by 2022 as per the original proposals.

However, this is unlikely to be completed in the next five years as both funds crunch and political uncertainty have clouded the atmosphere since this March. The Singapore consortium, which has taken up construction of many of the iconic buildings and mini-cities of the capital, is hesitant to go ahead in view of the TDP’s strained relations with the BJP government at the Centre.

Paucity of funds from the Centre is another reason for a possible delay in execution of many works that are underway. The Chief Minister, who wanted to showcase the capital city—along with the Polavaram irrigation project across river Godavari—to the people before the next elections, is in a dilemma on pushing these two at any cost. If Polavaram is 53% complete by now, Amaravati’s work progress is less than 20%.

Right from the day the Naidu Cabinet decided to set up the new capital at around Vijayawada city, on 1 September 2014, Amaravati has run into various controversies—environmental, social, financial and political—as there has been no unanimity among political parties. The Centre, too, was not on the same page with the Naidu government, right from selection of the location to construction of the capital city.

The Sivaramakrishnan committee appointed in March 2014 to recommend a suitable place for the capital of Andhra Pradesh hasn’t favoured Amaravati. The panel which submitted its report to the state suggested for a simple administrative capital at any place, preferably at Donakonda in Prakasam district and setting up of major offices like Assembly, High Court and Secretariat at different districts for decentralisation.

However, Chief Minister Naidu was not ready to settle for anything less than the grandeur of Hyderabad, which he lost to Telangana in the bifurcation of the combined state and vowed to build another mega city between Vijayawada and Guntur cities across river Krishna. Initially, he thought that he would get liberal help from the NDA government of which his TDP, too, was a constituent.

However, the Centre unhappy with a spate of allegations that the TDP government was embroiled in many controversies as it has taken up a vast city over an area of around 217.23 sq km, that too on fertile lands that fetch three crops a year, mostly commercial crops like chilli, tobacco and banana. The Centre has also received allegations that the CRDA was involved in large-scale real estate development.

According to retired IAS officer I.Y.R Krishna Rao, who was the Chief Secretary of Andhra at the time the Naidu Cabinet finalised the capital in 2014, the choice of Amaravati was bad. Krishna Rao, who wrote a book Whose Capital Amaravati?, is now mostly seen on forums that oppose land acquisition in Undavalli mandal.

AP CM N. Chandrababu Naidu seen launching smart cycles at the Secretariat in Amaravati, on 31 January 2018. IANS

According to Rao, huge amounts of funds were needed for the construction of Amaravati and this would become a huge burden on a revenue deficit state like Andhra Pradesh. “At least Rs 6,000 crore is needed just to build a storm water drainage for Amaravati as it is built on loose soil. But a compact capital city can be built with that amount,” he told The Sunday Guardian.

Rao said that Chief Minister Naidu had set aside the Sivaramakrishnan committee three months before it submitted its report and appointed another panel led by his Municipal Administration Minister P. Narayana and comprising some of his party leaders and businessmen to finalise a location for the capital and this panel preferred the present Amaravati location.

Vadde Sobhanadreswara Rao, who is fighting for the farmers of Undavalli, told this newspaper that even if the government wanted to set up its capital around Vijayawada, it should have selected Gannavaram airport or Nuzivid, which are dry and upland areas, but not Amaravati, an agriculturally rich area, but which gets water logging, on the banks of river Krishna.

Buggana Rajendranatha Reddy, YSR Congress MLA and AP Legislative Public Accounts Committee (PAC) chairman, lashed out at the government for “running a real estate racket” and draining public money on it. “The CM is sitting on prestige and is going for market barrowings at exorbitant interest rates of 10.32% and collected Rs 2,000cr from the Bombay Stock Exchange last week,” he said.

Reddy said that the government would be mobilising another Rs 12,000cr soon to continue ongoing work like the laying of six-lane and four-lane roads in the capital city. “Very soon, the government would be forced to pay an interest burden of Rs 1,532 crore per annum on the money they plan to raise, this is a sheer burden on people,” the PAC chairman said.

Minister Narayana, who looks after Amaravati construction, refuted all these charges, saying that only those who were jealous of the TDP government building a world class city were opposing it. “We wouldn’t have gone for market bonds, if only the Centre gave us funds. We promised to people to build a beautiful capital and we will keep our word,” he told The Sunday Guardian.

The minister and officials, however, are tight-lipped over the possible delays from the side of the Singapore consortium, which is to a great extent mandated to follow clearances by the Union Ministry of External Affairs and Ministry of Finance. The CRDA has finalised bids for construction of different administrative, commercial and residential zones of the city, but the work is expected to begin after more time.

Now Naidu wants to go to the people, seeking their participation and support as the Centre is not cooperating with him on Amaravati. At the same time, the Opposition will go to the same public alleging that the capital city is nothing but a real estate racket and that this huge debt on its name would be a burden on future generations. Andhra elections are going to be fought on these lines next year.

Replies to “Amaravati, an albatross around Naidu’s neck”

  1. you seem to be unaware of the facts,
    1. 90% of land pooled was not irrigated, dry land only
    2. GOI has given only Rs 1500 crore for Capital and another Rs.1000 crore for Underground drainage in Guntur and Vijayawada.
    3. If IYR Krishna Rao is so concerned, why doesn’t raise them when he was CS, after retirement why he took Brahmin Corp’s chairman post?
    4. you get inputs from Skashi paper only 🙁
    very bad article with half facts and lies !!!

  2. You posted the same baseless allegations which opposition were made with no solid proofs.
    Being a journalist you should investigate atleast the preliminary things. Which you didnt.

  3. It is a good article explaining the implications of Amaravati city contemplated by the CM of A.P. and its inappropriateness. But there are some variations from the facts on the ground. The central govt. did not indicate any addition allocation of funds, before hand. The state did not even spent the Rs.2500 cr. given by center properly. The LPS was not innovative . It was coercive, destructive and impracticable. It destroyed invaluable natural endowments like ‘jareebu’ lands and freshwater acquifer which can not be created artificially by governments. The liberal help the CM expected from central government can not be in the range of 50000 or one lakh cr, which is not practicable. It is not 213.17 km, the city agglomeration is planned for 2740 destroying at least a lakh acres of Krishna delta and other highly agriculturally productive land in the area. The central government allowing state to throw its own committe report even before it was considered, set the ball rolling for the impracticable and destructive city project. What can they do with 2000 cr. if they need about 48000 cr. for phase 1 itself. Do they expect Center will be able to give all that 48000 cr. in one tranche and go on giving for the next phase(s) for the utopian city. But the article has rightly said that the project has become an albatross around the neck of Babu and it can well be the same around the neck of the state also.

  4. People are interested the capital at Amaravati only. The so called IYR,Ysrcp ,Vadde etc., are joules about this ,they don’t want to develop AP goodwill of CBN. So,they are propagating all these things. Once the elections are over Ysrcp will fade out and our capital willbe No.1 ..

  5. In 1996 Mr. Rajasekhar reddy also had commented against Mr. Chandrababu Naidu during the current Hyderabad hitec city towers construction. In fact Mr. reddy don’t seen hidden Naidu’s vision. however later Mr. Reddy followed. Nowadays so many are commenting many on Naidu but a very few can understand his vision. For now let them comment on him.. Not an issue.. but in future they would know about the truth.

  6. We should support AP Chief Minister in his attempts in building new capItal at Amaravathi.

  7. View s mentioned in this article are politically motivated. Pepole give mandatory againstCentrral BJP government and opposition parties in state coming 2019 election.

  8. Its the reality that every andhrite will agree!!! excpet, the people from districts of Guntur, Krishna (as they are direct beneficiaries of new capital) & supporters of TDP.
    But, neither the people nor GOI nor the opposition parties are in a position to stop a monarch & tuglak like CBN. Example being, even after much backlash on issuing 2000 cr. bonds recently, he is again readying to issue fresh stock of bonds on 27th.
    I am sure people from rest 11 districts are just waiting for 2019. Untill then, its all in the hands of God.

    Also, be ready to see witness some harsh comments, blaming the authors & publishers as non visionary, anti-AP development, anti-south & finally, paid by BJP.

  9. It’s government wish to build a Brunei like capital ok no issues like ghmc bonds let them collect principal and interest by only people living in that crda area otherwise rest of crda the remaining state will be bleaded to standstill

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