Iswaran said “ the newly-elected Government of Andhra Pradesh has decided not to proceed with the Start-Up Area given its other priorities for the state
Amaravati: Y.S.R. supremo and Andhra Pradesh Chief MinisterJagan Mohan Reddy has scrapped his predecessor N. Chandrababu Naidu’s grand project to develop a Singapore-like financial hub in the planned “world-class capital” Amaravati. This comes months after World Bank pulled out of the project.
On Monday, the state government terminated the Start-up Area Development Project, which was planned by Naidu alongside Singapore minister for trade relations, S. Iswaran, in 2017 to make Amaravati the growth engine of post-bifurcation Andhra Pradesh reeling under the loss of revenue rich Hyderabad.
The Singapore government, which was roped in by Naidu to execute the project, has now expressed interest in pursuing emerging opportunities in the state where Reddy is redrafting all infrastructure projects.
After becoming the chief minister in the month of May, Reddy has indicated the insignificance of Naidu’s plan in his new development agenda for the Andhra Pradesh. In its budget, his government allocated a paltry Rs 500 crore for the capital city’s development.
“I’m confident that our government will build the best capital in India. Everybody in the world, people will talk about Amaravati,” Naidu had said about the new capital conceived by his government in 2017. The start-up area plan was to be developed through a special purpose vehicle Amaravati Development Partners Private Limited (ADP), which comprised state-owned Amaravati Development Corporation Limited (ADCL) and Singapore Amaravati Investment Holdings (SAIH) Pvt Ltd.
As per the project, the ADP was to develop about 1,691 acres of start-up area in three phases. While SAIH owned a 58 per cent stake in the ADP, the ADCL has a 42 per cent stake. The start-up area is aimed at kickstarting economic activity in the Amaravati.
In a statement, on Monday Janice Ong, senior assistant director of corporate communications of the Ministry of Trade and Industry of the Singapore government, said the decision to wind up the project followed a government order issued by the YSR Congress party government led by YS Jagan Mohan Reddy.
“The Singapore Government has given the decision by the Government of Andhra Pradesh to close the Amaravati Capital City Start-Up Area project via a Government Order dated November 11, 2019,” the statement added.
Minister-in-charge of trade relations S Iswaran said the Singapore Consortium was appointed by the Government of Andhra Pradesh in 2017 to help master develop the 6.84 square kilometres of Start-Up Area of its new capital city Amaravati.
Iswaran said “The newly-elected Government of Andhra Pradesh has decided not to proceed with the Start-Up Area given its other priorities for the state. Companies have realized such risks when venturing by overseas the 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,”.
The Jagan government issued orders on Monday asking the Andhra Pradesh Capital Region Development Authority (APCRDA), the nodal agency of the capital city, not to proceed further on the project. The government authorized APCRDA commissioner P Lakshmi Narasimham to finalize the draft termination agreement with Singapore consortium.
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