Reviving the works on his dream project of Amaravati, an ultra-modern capital city, is among the top priorities of the Andhra Pradesh Chief Minister N Chandrababu Naidu who returned to power in the recent elections.
Soon after taking over the reins of the state, Naidu, who is credited with conceiving the Amaravati project during his previous tenure between 2014 and 2019, held a series of brainstorming meetings with top officials and sought suggestions from the public on how to fund and complete construction of Amaravati.
As part of efforts to revive the project, the state government's Capital Region Development Authority (CRDA) had decided to initiate talks with the Singapore government about developing the seed capital area in Amaravati.
The decision in this regard was taken at the CRDA's first meeting held recently with the chief minister. As soon as the YSR Congress Party came to power in 2019, the then government had cancelled an agreement with the Singapore Consortium, comprising Ascendas Singbridge Pte Ltd, which is now part of CapitaLand Group, and Sembcorp Development Ltd, to develop the seed capital area in Amaravati.
Earlier in 2018, the CRDA under the TDP government signed a concession and development agreement (CADA) and a shareholding agreement (SHA) with a Singapore consortium to execute the Amaravati Start-up Area Development Project.
The start-up area encompasses a total development land area of 6.84 sq km, slated for development in three phases spanning 20 years. At that time, over 15 companies and institutions from Germany, India, Japan, and Singapore entered into Memoranda of Understanding as partners in the areas of smart buildings, smart energy, smart environments, and smart collaborations.
“The CRDA meeting has now decided to initiate talks with the Singapore government about developing the seed capital area, for which the previous YSRCP government had cancelled the earlier agreement,” said the state minister for municipal administration and urban development P Narayana.
Between 2014 and 2019, the previous Naidu government, with the support of the Singaporean government, envisioned a start-up area development project in the core capital region, for which they floated Amaravati Development Partners (ADP).
However, after the YSRCP came into power in 2019, the then finance minister Buggana Rajendranath was asked by the then chief minister YS Jagan Mohan Reddy, to initiate talks with the Singapore government for a mutual understanding for the voluntary liquidation of the startup project.
Rajendranath had also visited Singapore once and held several rounds of talks with the relevant heads of government there. Finally, the Singaporean government, too, agreed to withdraw from the project voluntarily with some mutually agreed terms.
Singapore Amaravati Investment Holdings (SAIH) and Amaravati Development Corporation Ltd. (ADCL) were shareholders in the ADP.
SAIH was a wholly-owned joint venture company of Ascendas-Singbridge Andhra Investment Holdings and Sembcorp Development India. On November 12, 2019, following the state government's announcement to discontinue the start-up area development project, the Singaporean government also formally announced the project's closure.
Singapore’s then trade minister, S. Iswaran, who now faces corruption charges in his country, said that the project had cost the Singaporean companies a few million dollars and that the closure would not impact their investment plans in India. He said Singapore remains interested in opportunities in Andhra Pradesh.
S Iswaran, in a statement on November 12, 2019, said, “The Singapore Consortium was appointed by the Government of Andhra Pradesh in 2017 to help master develop the start-up area of its new capital city, Amaravati. 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.
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.
xSingapore companies remain interested in opportunities in Andhra Pradesh and other Indian states because of the size and potential of the market. Our economic agencies will continue to help our companies internationalise by exploring opportunities in India and other overseas markets.”
In another statement, Singapore Amaravati Investment Holdings (SAIH), which was formed to take up the start-up area development project, said that following the change in the scenario for the development of Amaravati Capital City, it is no longer feasible to develop the Amaravati Capital City Start-up Area as originally planned.
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