Investments in Amaravati project “commercially confidential”, but no state funds used: S. Iswaran

While investments made by the Singapore companies involved in the joint project between Singapore and Andhra Pradesh to develop capital city Amaravati in India are “commercially confidential”, Minister-in-charge of trade relations S Iswaran on Tue (3 Sep) said that no state expenditure was involved in the project.

Iswaran was responding to supplementary questions from Workers’ Party Non-Constituency Member of Parliament Leon Perera regarding the total expense made by Singapore companies in the Amaravati project to date, and as to whether there has been “significant expenditure or state funds” in the form of co-investments or grants to support the companies in their venture.

“I am not privy to the details, and I am therefore not able to give the Member a response,” he added.

However, Iswaran assured the House that “the answer is no” as to “whether there were any subsidies or grants by the Government for investments in the [Amaravati] state”.

Indian Minister hints dropping Amaravati as new state capital, threatening Singapore companies’ investments

The Amaravati project is a joint development between the Singapore consortium led by Temasek-linked Ascendas-Singbridge and Sembcorp Development, and Amaravati Development Corporation Limited, a company set up by the previous Andhra Pradesh state government under the Telugu Desam Party (TDP).

After the TDP lost to Jaganmohan Reddy’s YSR Congress party in the recent general election in May, developments in Amaravati came to a halt.

Andhra Pradesh’s new state government is reviewing all ongoing works and cutting finances, triggering uncertainty over the future of the state capital project which Temasek-linked entities Ascendas-Singbridge and Sembcorp Development have invested in.

The new government has accused the previous Chief Minister of corruption regarding the way land was acquired, as well as other improprieties including insider trading.

Individuals linked to the previous Chief Minister were said to have allegedly bought land with the knowledge of where the capital city was going to be located before any formal announcements were made.

It was even reported that his new state government has even gone ahead to cancel flight arrangements connecting Amaravati’s Vijaywada Airport and Singapore’s Changi Airport, an agreement signed by the previous state government with Singapore.

Earlier last month, Singapore High Commissioner to India Lim Thuan Kuan, alongside officials from Singapore’s Ministry of Trade and Industry, met the new Chief Minister in a bid to improve soured relations resulting from the takeover.

Lim told Reddy that Singapore is ready to invest more in other areas in Andhra Pradesh, and informed the Chief Minister about Singapore’s current collaboration with the state of Andhra Pradesh – in areas such as urban planning and development, waste and water management, building and construction, to name a few – via a Memorandum of Understanding endorsed by the Government of India.

Officials and experts from Andhra Pradesh and Singapore have worked closely to develop key economic sectors such as construction and urban solutions, logistics and connectivity, and tourism to name a few, Lim added.

The High Commissioner also reportedly told the Chief Minister that over Rs20,000 crore (S$4 billion) worth of investments made by Singapore companies in Andhra Pradesh have contributed to the creation of “a substantial number of jobs across the state”.

New Indian Express, however, observed that “the omission of Amaravati in the statements” of both countries “was striking”. Furthermore, it was also reported that uncertainty over the fate of Amaravati’s development has led to a sharp fall in land prices across the state in the last two months.

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