AP wants ₹3,000 crore to resume Amaravati work, but banks says no

Government plans to complete construction works in Amaravati hit fresh roadblock

Cattle roam as unfinished buildings stand in the background. | Photo: P Pavan

The Andhra Pradesh government’s decision to resume construction work on partially completed buildings in Amaravati has hit a roadblock, with bankers insisting on closure reports for earlier work for which they lent funds.

A consortium of three nationalised banks had extended 2,060 crore for various projects in Amaravati — initially billed Andhra Pradesh’s new capital — when the Chandrababu Naidu government was in power. The Amaravati Metropolitan Region Development Authority (AMRDA), formerly Capital Region Development Authority, recently approached the consortium for a fresh 3,000 crore loan to complete some of those buildings. The state government offered counter-guarantees for the loan.

Also read: Amaravati was going to be the pride of Andhra. It is now a ‘ghost city’

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The banks’ response leaves the AMRDA facing a dilemma. The building works were stopped abruptly in May-June 2019 after the YSR Congress Party came to power. Chief minister YS Jagan Mohan Reddy initially wanted to review the projects before taking a decision.

However, months later, he came up with a fresh plan to create three capitals – with the executive capital in Visakhapatnam, judicial capital in Kurnool and legislature in Amaravati. The decision left the fate of several projects in Amaravati in limbo.

The secretariat buildings (twin towers), court complexes, bungalows for judges and ministers, and quarters for civil servants, gazetted and non-gazetted officers and others will become redundant if the executive and judiciary move out of Amaravati. Various litigations challenging the three capitals law are pending before the high court. On the other hand, local farmers who provided the land for the comprehensive single capital have been agitating, insisting that the capital should be in Amaravati.

Also read: Capital city dream shattered, Amaravati farmers left in penury

A few days before local body elections, in February, the CM took stock of the situation in Amaravati and formed a nine-member official panel to complete the half-built structures. The government, however, did not specify what these buildings would be used for. According to sources, the government intends to sell some of the buildings that are not required, to raise funds for other infrastructure works.

The panel was asked to study the project and make recommendations – whether to finish construction or to explore means of reducing the burden on the exchequer. Chief Secretary Aadityanath Das, who heads the panel, has already held a meeting to find a way forward.

Municipal Administration Department Principal Secretary Y Srilakshmi told the committee that 2,112 crore was needed to complete the unfinished building infrastructure. The state also owed 302 crore to contractors for work done, she said.

The CM asked the officials to expand the two-lane Karakatta Road to four lanes with 150 crore. This is the main road connecting Amaravati to the highway to Guntur and Vijayawada. The CM advised the AMRDA to mobilise funds through loans for completion of various projects.

The AMRDA placed a proposal to raise 10,000 crore to complete the prioritised works in three phases: 3,000 crore each in the first and second phases and 4,000 crore in the third phase.

According to the AMRDA commissioner, the consortium partners –

Bank of Baroda, Union Bank and Indian Bank – had on January 12 agreed in principle to sanction 1,000 crore each.

However, according to officials, the banks asked for the closure reports for the amount advanced earlier.

“We have asked the banks to write to us with all their requirements. The government will take a call once such communication is received,” an official said.

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