The Capital Paradox: Why road to Amaravati remains bumpy

Amaravati, touted as a world-class capital city that India has “never seen before”, presents a compelling picture of paradox; a social asymmetry that is too stark to ignore.

Here are the images of irony: Ranga Rao, a medium farmer, made a cool ₹12 crore by selling four acres of his land and became an instant millionaire, thanks to an unprecedented boom in land prices in the Vijayawada-Guntur region where the new capital city is coming up. Lingaiah, whose entire family used to be gainfully engaged in farm work, is now jobless after the lands were acquired for the capital city project while life for Mohammed Aziz, a driver with a local travel agency, has become tough with the monthly rent for his two-room house in Vijayawada going up from ₹2,000 to ₹7,500 within a short time.

The dream project of Andhra Pradesh Chief Minister N Chandrababu Naidu, Amaravati, which requires ₹one lakh crore to build over three phases, is bogged down by resource crunch, bureaucratic delays, shoddy implementation, blame-game between the state and the Centre and allegations of cronyism and environmental degradation.

Fuelled by expectations of a massive development boom, a string of residential and commercial complexes–gleamy glass and steel structures–has come up on Vijayawada-Guntur highway. A typical 3 BHK flat in these ventures, close to the highway, costs nothing less than ₹1.20 crore.

“The capital project is heavily skewed in favour of the land owners who have benefitted immensely while the agricultural labourers, daily wage earners, vegetable and fruit vendors and even the middle class have been squeezed out,” says Venkata Raju, a jobless youth at Vundavelli village, about 7 kms from Vijayawada.

Ambitious dream

The plans for Amaravati started soon after the bifurcation in 2014 to compensate for the loss of Hyderabad to Telangana. Naidu, widely credited for developing Hyderabad into a global software destination during his tenure as Chief Minister of the united AP between 1995 and 2004, came up with an ambitious idea to build a city to serve as a “power-house for economic development and job-creation which could attract non-polluting high-value manufacturing and service industries.”

Amaravati, named after the ancient Buddhist city and the seat of power of Telugu rulers nearly two millennia ago, was envisioned to be among the top three in India by 2022 and the best state in the country with “High Happiness Index” by 2029.

The Vijayawada-Guntur region has been chosen for the river-front capital as it is centrally located and accessible from all parts of the state. According to the plan, the capital region will be spread over 7,420 sq km of which the capital city would occupy 217 sq km. The plan envisages an area of 6.84 sq km to be developed first. This core area will contain within it the Assembly, Secretariat, Raj Bhavan and High Court buildings.

“Amaravati will be constructed in such a way that it will become a role model for the rest of the country,” Naidu would often say. The master plan provides over 30 percent blue green footprint, with ample public spaces such as parks, riverfront and canal front.

However, the works are proceeding at snail’s pace as the cash-strapped government is finding it difficult to mobilise funds for the mammoth project. The confrontation with the Centre, following the TDP’s exit from the BJP-led NDA, has worsened the woes.

Barring an interim government complex at Velagapudi, with a Legislative Assembly and Secretariat, and a network of roads under-construction, the main components of works in the core capital area are yet to take off fully.

Land Pooling

While land acquisition for big projects elsewhere in the country is riddled with roadblocks and protests, the process has been relatively smooth in Andhra. The state government opted for land pooling method involving voluntary surrender of lands by farmers who will be made partners in the development of the region.

The government has pooled 34,075 acres from 28,148 land owners, spread over 29 villages. Under the scheme, the government pays ₹25,000 per acre per year for 10 years to each farmer who parted with his or her land. There would be a five per cent increase every year on the promised payment. The government also promised to give back developed plots of 1,000 square yard per acre to farmers within nine months from the date of the completion of the land pooling. Since the value of these lands is expected to increase in future, the farmers would be immensely benefited.

“Unlike land acquisition, there is no displacement here. The land pooling scheme has made Amaravati a truly people’s capital because farmers will enjoy the economic benefit of future development,” an official of the Capital Region Development Authority (CRDA) said.

However, there is still resistance to the land pooling as farmers from five villages are yet to part with their lands. The ruling TDP leaders allege that these villages are under the grip of the opposition YSR Congress Party headed by Y S Jagan Mohan Reddy.

“Still, about 2,500 acres are yet to be acquired by the government. We are not giving our lands because we will lose our source of livelihood and we don’t have faith in the kind of development model that this government is talking about,” said P Ram Mohan, a farmer from Penumaka village.

Interestingly, the YSRCP candidate from Mangalagiri Ramakrishna Reddy has been mobilising farmers who are unwilling to give their lands and leading the protests against land pooling.

Unsustainable project

Naidu’s detractors have alleged that the choice of the location of the capital city was to benefit the big contractors and industrialists affiliated to the ruling TDP. The relatively prosperous Vijayawada-Guntur region is dominated by Kamma community, the traditional support base of the TDP.

“Amaravati is an environmentally unsustainable project and a flood risk,” says Prof Ramachandraiah Chigurupati of the Centre for Economic and Social Studies. The project imposes a heavy cost on the livelihoods of people and destroys the fertile agricultural lands.

“In a zone characterised as low-lying plains with fertile agricultural land, floods will be a feature. The state has been hit by several cyclones over the years. In times of global warming, which leads to intense bursts of heavy rains, an entire city could be inundated within hours, leading to massive destruction,” the expert warns.

The critics argue that the biggest losers would be the backward caste farmers, who take land on lease, and agricultural labourers, a majority of them belonging to the scheduled castes. The model would only result in widening the social inequalities.

Amid much fanfare, Prime Minister Narendra Modi had laid the foundation stone for the project on October 22, 2015. After three and half years, the city is still in a nascent stage. The expected international investments are yet to materialise.

The development plan of the city is divided into three phases – the first phase from 2015-2025, second from 2026-2035 and the third from 2036-2050 – to ensure that the city grows properly and sustainably.

According to a latest status report, made available to The Federal, the overall cost of construction of Amaravati is ₹48,116 crore in Phase I and ₹1.09 lakh crore in total. “Out of the ₹48,116 crore construction works to be undertaken, ₹36,960 crores of works are under execution on the ground,” the report said.

A total of 320 km of arterial and sub-arterial roads are being planned as per the master plan. Of this, 285 km are currently under execution, it said.

The government complex master plan, spread over about 1375 acres housing the secretariat, Assembly, High court and other offices, is expected to be completed by December 2020. The Tier-II infrastructure works, covering all amenities in the core capital region, will be completed by December 2021, the report says.

Funds crunch

In what was a grandiose start, Singapore government was roped in to design the master plan for the city that seeks to combine tradition with modernity and incorporates the concepts of Vastu and Feng Shui, the Indian and Chinese sciences of construction. This was the first time that a foreign country has designed a state capital in India.

A Japanese firm Maki and Associates was selected for construction of iconic structures, including Assembly, Raj Bhavan and High Court.

However, the project hit a roadblock with the expected funds not flowing in. The Centre had sanctioned ₹1500 crore for the capital construction which the TDP government dubbed as ‘pittance.’

The government had approached World Bank for ₹7,000 crore loan for infrastructure development but the NDA government pruned it to ₹3,800 crore and provided the counter-guarantee. Though the Bank initially offered to provide the loan, it backed out later following objections from a group of farmers in the capital region who accused the government of acquiring lands by coercion.

The government also approached JICA (Japasene International Cooperation Agency) and ADB (Asian Development Bank) for financial assistance but its efforts are yet to make much headway.

However, HUDCO sanctioned a ₹7,500 crore loan, enabling the government to kick off capital works. On its part, the CRDA raised ₹2,000 crore through bonds to meet the capital cost in August, 2018.

With the World Bank assistance failing to become a reality, a question mark hangs over the plans to develop the plots-with roads, drains and other infra facilities-to be handed over to the farmers who parted with their lands for the capital city project.