India

Andhra govt ends Amaravati project with Singapore consortium

Andhra govt ends Amaravati project with Singapore consortium

THE YSRCP government in Andhra Pradesh has scrapped the previous TDP government’s Start-up Area Development Project, covering an area of 6.84 sq km, in the state capital of Amaravati.

In January 2018, then Chief Minister N Chandrababu Naidu had awarded the development rights for the start-up area to a Singapore consortium and its Indian partners. Work was yet to begin on the project, to be developed in phases over 20 years.

A government order issued on Monday night said the agreement with the Singapore consortium to develop the greenfield start-up area had been terminated, and orders had been issued to the AP Capital Region Development Authority (CRDA) not to proceed with the project.

It said the government, “after careful examination of the matter”, had granted “approval to refrain from proceeding further in the Start-up Area Development Project of 6.84 sq km and in principle approval to wind up Amaravati Development Partners Pvt. Ltd. (ADP) by voluntary liquidation on a mutual consent basis between the shareholders of ADP i.e., ADCL (Amaravati Development Corporation Ltd) and SAIH (Singapore Amaravati Investment Holdings Pvt Ltd).

Andhra Pradesh Minister for Municipal Administration and Urban Development, Botsa Satyanarayana, said the project was scrapped following mutual consent. “There was no progress in the required measure and set parameters in the capital area region. We expressed our concern when we asked the Singapore consortium about the benefits the state would get from the project and about the delay. How the state will benefit was the genuine concern and a satisfactory reply was not forthcoming,” he said.

“It was noted that during the past four years, the consortium did not undertake tangible work… The government wants to fast-track development and growth,” he said.

In a statement on Tuesday, the Singapore government said: “The Singapore government notes the decision by the Government of Andhra Pradesh (GoAP) to close the Amaravati Capital City Start-Up Area Project. The closure is based on mutual consent between the GoAP and the Singapore consortium (comprising Ascendas Singbridge Pte Ltd (now part of CapitaLand Group) and Sembcorp Development Ltd).’’

Singapore’s Minister-in-Charge of Trade Relations S Iswaran was quoted as saying: “Companies recognise such risks when venturing into any overseas market and factor them into their investment decisions. In this instance, the Singapore consortium companies have stated that the project has cost them a few million dollars, and that its closure does not impact their investment plans in India. Singapore companies remain interested in opportunities in Andhra Pradesh and other Indian states because of the size and potential of the market.

Our economic agencies will continue to help our companies internationalise by exploring opportunities in India and other overseas markets.”

The YSRCP government led by Chief Minister Y S Jagan Mohan Reddy, which came to power in May, has scrapped other projects cleared by Naidu, including the development of Amaravati as a world-class capital city.