The Indian state of Andhra Pradesh has abandoned the city of Amaravati and chosen the coastal city of Visakhapatnam to be its new capital. The new Andhra Pradesh Chief Minister Jagan Mohan Reddy announced this on Tuesday (31 Jan).
“I myself will be shifting over to Visakhapatnam in the months to come,” Mr Reddy said.
Before Mr Reddy became the new Chief Minister, the Andhra Pradesh state was run by the Telugu Desam government. The Telugu Desam Party is aligned with PM Modi’s Bharatiya Janata Party. At the time, the Chief Minister was Chandrababu Naidu, leader of the Telugu Desam Party. It was Mr Naidu who picked the city of Amaravati to be the new capital of the state.
Mr Naidu wanted Amaravati to be like Singapore and signed two memorandums of understanding (MOUs) with a consortium comprising Ascendas-Singbridge and Sembcorp Development to develop it.
In 2017, the Singapore Amaravati Investment Holdings consortium was announced as the master developers for the waterfront financial centre in Amaravati.
This collaboration is complemented by a G-to-G Memorandum of Understanding (MoU) between the Government of Singapore and the government of Andhra Pradesh on training and capacity building, which has been endorsed by the government of India.
The city was conceived to be ten times bigger than Singapore.
At the time in 2017, in response to questions by Workers’ Party Member of Parliament Leon Perera, then-Minister for Trade and Industry S Iswaran painted a rosy picture of the Amaravati project in Parliament:
“The Amaravati project to build a new capital city in Andhra Pradesh, will give Singapore companies opportunity to export our expertise, in urban solutions and other domains. With our early involvement in the initiative, our companies including SMEs will be well-positioned to offer their services and participate in projects, within the state of Andhra Pradesh as well as the broader Indian market.”
When asked by Mr Perera in 2019 whether the Government will continue to encourage investment in the Amaravati city project following the change in the stance of the government of India in respect of seeking funding for the project, Mr Iswaran, who is then-Minister-in-charge of Trade Relations said the Singapore consortium companies are closely following the developments and evaluating the impact on the investment opportunity.
Following up on the matter, Mr Perera asked if the Minister has any sense of the total investment that has been made by Singapore companies in this project to date, Mr Iswaran said the investments made by companies are commercially confidential, and therefore he is not privy to their details nor able to give the MP a response.
Bye Bye to Amaravati
Mr Naidu lost the state elections in April 2019 to his rival, Mr Reddy, who was from the YSR Congress party. Shortly thereafter, in November 2019, the Reddy government cancelled the agreement with the Singapore consortium.
Mr Reddy further accused Mr Naidu of being party to corruption in the mega project when Mr Naidu was the Chief Minister. Mr Reddy said at the time, “A CBI enquiry on the foreign investments will bring out the facts on why investments are coming only from Singapore companies.”
In a letter to the central government in 2019, Mr Reddy’s government said over 1,618ha of land at the project site was bought in 2014 by people who were told in advance about the location of the new capital. Mr Naidu has denied any wrongdoing.
Opposition parties have criticised Mr Reddy for making the decision without consulting the state assembly and accused him of being “dictatorial”.