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Tribune News Service
Andhra Pradesh will take the help of two Singapore companies to build Amaravati as a “world-class capitalâ€, chief minister N. Chandrababu Naidu said, providing clarity on development plans eight months after the foundation for the new capital was laid.
The state cabinet, at a meeting on Friday, gave its nod to develop the capital with help of a consortium led by the Singapore government.
The cabinet studied the proposal submitted by two Singapore companies, urban solutions provider Ascendas-Singbridge Pte Ltd and Sembcorp Industries Ltd to develop the capital city on the banks of the Krishna river, between Vijayawada and Guntur.
Sembcorp’s urban development division builds industrial parks, integrated townships, and commercial and residential spaces.
The two companies submitted their proposal to be master developer of Amaravati on 30 October.
The proposal was referred to a high-powered committee headed by state finance minister Yanamala Ramakrishnudu. The committee scrutinized the proposal at various levels and approved it last week.
“We realized that a world class capital cannot be built without help from foreign nations,†the chief minister said at a media briefing in Amaravati.
The Singapore government has a 74.5% stake in the consortium.
The consortium has offered a 42% stake to Amaravati Development Company, a special purpose vehicle (SPV) of the state government.
The SPV and the Singapore consortium will jointly develop the core capital area.
The state government will follow the Swiss Challenge method to build the greenfield capital city. This means that the proposal submitted by the Singapore consortium will be challenged by other potential master
developers.
If the competing proposal beats the one proposed by the Singapore consortium, the mandate to build the capital goes to the other party.
Andhra Pradesh is also working with the Japanese government.
The Japan Bank for International Cooperation (JBIC) and the state finance department signed an in-principle agreement in October for capital development and industrial
development.
Apart from Japan, China and the United Kingdom have also been approached to submit their proposals, Naidu said.
The final master developer will be selected by 15 August.
The master developer will be responsible for developing 6.84 sq. km, or around 40% of the core capital area.
The state government will hand over 1,691 acres to the master developer in three phases, Naidu said.
Of the 1,691 acres, 50 acres will be given at a nominal price. The consortium has offered to pay Rs.4 crore an acre for 200 acres under the first phase of development, noted Naidu.
The Singapore-based companies have already designed three masterplans for Amaravati, covering three areas: seed capital (16.9 sq. km), capital city (217 sq. km) and capital region (7,420 sq. km).
Urban planning consultancies Jurong International Holdings Pte. Ltd and Surbana International Consultants Pte. Ltd developed the masterplans, released last year.
A revenue-deficit Andhra Pradesh is building a capital from scratch following the creation of the state of Telangana in June 2014. The state has time till 2024 to build its capital, before the current joint capital, Hyderabad, is transferred to Telangana.