The increase in the cost of construction of greenfield Amaravati capital is ‘enormous’ in the last five years after the construction was stopped abruptly, according to a White Paper on Amaravati.
“Apart from the enormous increase in the cost of completing the infrastructure, the credit ratings of Amaravati Bonds got affected negatively,” Andhra Pradesh (AP) Chief Minister N Chandrababu Naidu said while releasing the white paper, in Amaravati on Wednesday.
The initial rating of bonds by Acuite, Brickwork and CRISIL were AA-(SO), AA-(SO) and A+(SO) respectively in 2018, while the latest ratings were C, BB+(CE) and BB+(CE) respectively, according to the white paper. “The brand image of AP suffered and the confidence of the investors has been shaken,” Naidu said.
As per the original plan for the project, unveiled by the Telugu Desam Party (TDP) government during 2014-19, the total project cost was pegged at ₹51,687 crore. This included ₹19,769 crore for Tier-I infrastructure consisting of city-level roads utilities, village infrastructure; ₹17,910 crore for Tier-II infrastructure consisting of last-mile connectivity; and ₹14,008 crore for Amaravati government complex along with essential infrastructure.
Subsequently, tenders were called for works worth ₹41,170 crore and all works were grounded. For this, ₹4,318 crore was paid and ₹1,268 crore has to be paid as on date.
Lost opportunity
The timely construction of Amaravati was a “lost opportunity” , the White Paper said, adding that the halt of works also resulted in cost escalation, damages to the structures, lock of funds in incomplete works, loss of revenue (GST & Income Tax), loss of jobs and absence of wealth generation, among others. “This is a case of one person (referring to former CM YS Jagan Mohan Reddy) destroying the future of the new generations,’‘ Naidu said.
The payment of annuity for 2,903 farmers was also stopped by the previous government and pensions were discontinued for 4,422 families.
On the way forward, Naidu said: “We need to restart the construction activity and restore investor confidence while rebuilding the brand impact of resurrecting the State economy,’‘ Naidu said.
The new capital project of Andhra Pradesh, Naidu’s pet project, suffered a setback when the then government led by YS Jagan Mohan Reddy, during 2019-24, decided to put in place three capitals for the State — Amaravati as legislative capital, Visakhapatnam and Kurnool named the executive and judicial capitals respectively.