Prospects appear dire for the stalled capital city project of Amaravati, which was being developed in the southern Indian state of Andhra Pradesh with Singapore’s help .
The zombie project, mothballed since the state elected Mr Jagan Mohan Reddy as its new Chief Minister in May, came up for discussion at the India Singapore Business and Innovation Summit.
India’s visiting Foreign Minister Subrahmanyam Jaishankar ducked the question when asked yesterday by Singapore’s Ambassador-at-large Tommy Koh if the project was “sick, very sick or dead”. It was a decision for the state rather than the federal government, Mr Jaishankar said.
The state’s Finance Minister Buggana Rajendranath made no mention of the proposed city, a pet project of the previous government, in his speech at the summit at the Sands Expo & Convention Centre.
In an interview with The Straits Times, he described it as something of a damp squib that did not figure high in the priorities of the agrarian state which was struggling to build an industrial base and generate revenue. “We don’t have the money to build a city,” Mr Rajendranath said.
“Our priority is bringing up the standard of living, providing equitable development to the entire state, providing an infrastructure for creating a manufacturing base, rather than to build a single city,” he said. “You have all of these lined up against that one issue. You can have this or that.”
Thus far, the involvement of Singapore firms has been relatively minor, restricted to developing a small portion as a financial district, he said.
Singapore has been involved in the project since its start in 2014, when Andhra Pradesh embarked on the venture because it lost its capital city Hyderabad to the newly created state of Telangana. Surbana Jurong submitted the city’s masterplan in 2015, and a consortium of Ascendas-Singbridge and Sembcorp Development was announced in 2017 as the master developers . It was conceived to be 10 times the size of Singapore, requiring an investment of billions of dollars.
Dr P.V. Ramesh and Mr Shamsher Singh Rawat, senior officials in Mr Rajendranath’s delegation, told The Straits Times that the state was keen to pitch for investors in the new sectors selected for priority development, including a greenfield international airport, four seaports, aquaculture and healthcare projects. Amaravati may not be abandoned, but a decision on it may yet take months, they said, adding that the state was in favour of developing a decentralised urban environment rather than concentrating all development in a single, large city.
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“It is the prerogative of the local government to adjust and amend its priorities from time to time, and it is the prerogative of the investors to decide whether to stay or to leave.
“What transcends such changes is the sanctity of contracts,” he said.
“The government needs to consider the signal it sends to investors,” he added.
Singapore has remained a highly competitive economy because it has provided a stable and predictable environment for investors, he said. “This lowers the cost of business. This encourages more investments.
“So, I would ask everyone to give time to the new government in Andhra Pradesh to sort out its priorities, then allow the private sector to make its own decisions, rationally, on commercial grounds.”
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