The Amaravati Capital City Start-up Area project has been closed by the newly-elected government of Andhra Pradesh (GoAP) yesterday (11 November) based on mutual consent between the GoAP and the Singapore Consortium, said the Singapore Ministry of Trade and Industry in a statement.
In a press release today (12 November), Minister-in-charge of Trade Relations S Iswaran said that while the closure of the project has caused the Singapore Consortium – which comprises Ascendas-Singbridge Pte Ltd, now part of CapitaLand Group, and Sembcorp Development Ltd – the Singaporean companies ‘remain interested’ in opportunities in Andhra Pradesh and other Indian states for the size and potential of the market.
The Singapore Consortium was appointed by the GoAP in 2017 to help master develop the 6.84km2 area in its new capital city, Amaravati.
Said Mr Iswaran, “We note that the newly elected Government of Andhra Pradesh has decided not to proceed with the Start-Up Area given its other priorities for the state.”
Mr Iswaran added, “Companies recognise such risks when venturing into any overseas market and factor them into their investment decisions. In this instance, the Singapore Consortium companies have stated that the project has cost them a few million dollars and that its closure does not impact their investment plans in India.”
This closure was expected as the GoAP announced on 30 October that the Amaravati capital project has been formally scrapped, terminating the agreement with Singapore Consortium, consisting of Temasek-linked companies.
The Singapore Consortium has been involved with the project since early 2014. In 2015, Surbana Jurong submitted a masterplan for the city while Ascendas-Singbridge and Sembcorp Development were made master developers in 2017.
The Amaravati capital city project was initiated by the previous GoAP to be the states new capital city, about 10 times the size of Singapore, to be developed in stages over 15 years.
Earlier in September, Mr Iswaran responded to supplementary questions from Worker’s Party NCMP Leon Perera regarding the total expenses made by Singapore companies in relation to the Amaravati project to date and whether there was been “significant expenditure of state funds” in the form of co-investments or grants to support the companies in their venture.
Mr Iswaran said that no state expenditure was involved in the project, adding that the investments made by Singapore companies in the project are ‘commercially confidential’.
He said, “I am not privy to the details, and I am therefore not able to give the Member a response.” However, he assured Parliament that on the question of “whether there were any subsidies or grants by the Government for investments in the [Amaravati] state”, the answer is “no”.