World Bank ‘ready’ to fund other projects in Andhra worth $1bn

The World Bank continues to finance other projects in Andhra Pradesh to the tune of $1 billion, covering health, agriculture, energy and disaster management sectors, in spite of its refusal to a USD 300 million Amaravati project.

In a statement, the World Bank said, “As the new government sets its development priorities, we stand ready to provide whatever support the state and the Government of India might request.”

World Bank officials communicated this to the state government after the USD 300 million loan proposal for Amaravati was dropped at the behest of the Centre, a top official in the Chief Minister’s Office said.

“The Washington-based Bank is now not averse to extending loan to AP government according to the latter’s priorities. The possibility of increasing the quantum of loan was also not ruled out by the Bank,” the official said.

He indicated that the government might seek World Bank assistance for funding the flagship Navaratnalu programme that was aimed at improving the living standards of citizens in tune with the Sustainable Development Goals.

This includes a new 328 million USD support to the state’s health sector, signed with the Andhra Pradesh government on June 27, 2019, the World Bank statement said.

Also read: What next for Amaravati, the dream Andhra capital?

World Bank officials informed the state government officials that the loan proposal was dropped mainly due to “non-compliance of its policies,” particularly those related to settlement of affected people.

Also, alleged rampant corruption and flouting of various socio-economic norms were cited as other reasons, the CMO official said.

“On July 15, the Government of India (GoI) withdrew its request to the World Bank for financing the proposed Amaravati Sustainable Infrastructure and Institutional Development Project,” the bank said.

The Independent Accountability Mechanism (teams) of the World Bank conducted an extensive study in the field after touring the capital region in September 2017.

The Bank teams found “many irregularities in the tender process which were heavily loaded in favour of contractors.”

Also read: Dropped Amaravati project due to withdrawal of finance plea, says World Bank

They also detected many irregularities in land pooling, utilisation of verdant agriculture land for other purposes, agriculture workers losing livelihood, serious environmental violations, the plan of the new proposed capital affecting the course of Krishna River and other issues.

The World Bank, based on field-level investigations, sought an explanation from the Capital Region Development Authority over these issues, but the explanation was “unsatisfactory.”
The World Bank team submitted its final report on March 29, 2019.

In its report, the team reportedly noted that the then Chandrababu Naidu-led government awarded contracts worth Rs 1,872 crore for laying roads even before the loan was sanctioned.

Contracts worth Rs 947 crore were awarded for other “minor works,” even as the World Bank objected that the works were allotted in violation of the retroactive financing policy.

Against this backdrop, the 300 million USD loan proposal was dropped, the World Bank informed the state government.

This had resulted in a blame game between the ruling YSR Congress and the opposition Telugu Desam Party, with each accusing the other for the bank dropping the loan proposal.