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‘AP’s credibility at stake as govt backs out on deals’

V Rishi Kumar Amaravati | Updated on November 28, 2019 Published on November 28, 2019

Former Chief Minister of Andhra Pradesh N Chandrababu Naidu visits Amaravati with his supporters on Thursday   -  T Vijaya Kumar

Chandrababu Naidu says the decision to put Amaravati on the backburner and reopen contracts have dented investor confidence

Former Chief Minister of Andhra Pradesh N Chandrababu Naidu on Thursday said that the State’s credibility has been hit due to the decision of the YS Jagan Mohan Reddy government to stop work in the capital city of Amaravati, scrap infrastructure deals and review power purchase agreements.

The TDP Chief said: “I am pained at the way works at the capital city Amaravati have been stalled by the new government. Many companies and investments made in the State have taken a hit due to this one decision.”

After conducting a tour through many of the 29 villages under the capital region where works had been initiated, Naidu said, “but for the hasty decision, which has put off all investors, many of these projects would have been completed.”

Need to reconsider

Interacting exclusively with BusinessLine at a housing complex which was under development for NGOs, close to the AP High Court, Naidu said, “I sincerely hope that the government would reason out and commence work on the project, which has given a lifetime opportunity to develop a greenfield capital city.”

Funding was no problem, as the World Bank, the Asian Development Bank, and some lenders from Europe, including from the Netherlands had invested in the new capital and a number of contracts had been awarded. All it required was to ensure their timely completion, he explained.

On the Jagan government’s mandate 70 per cent reservation for locals in private firms and industries, he felt that this was not a good step as this would send wrong signals to investors who have already shied away from the State. Other States could also block youth from the State seeking jobs.

FDI discouraged

On the reopening of power purchase agreements of renewable energy projects, he said at least 10-12 sovereign governments are involved in the funding of these projects. All of these have been hit and it has cast a shadow on fresh FDI into the State. Since the State was seeking to change the PPAs, the letter of credit mechanism has been brought about so that there are no defaults in payments for power producers. Such reviews and cancellation of projects impact FDI, he said.

Just a few months back, the entire capital city area was abuzz with over 70,000 workers involved in various activities. Now, the whole area is deserted, he said.

Naidu said during his regime, about ₹9,500 crore was billed and paid for capital works. Tenders for works for about ₹42,000-₹43,000 crore were to be called. These together worth ₹51,000 crore was part of the phase I of the capital investment. “In the entire project, we had planned for a total investment of about ₹1.1 lakh crore over several phases,” he said.

On the farmers who had given land and made a dream capital city possible, he said that the State managed to get a total of 54,000 acre under its fold. Of this, about 34,000 acre were through land pooling and the rest was through government and assigned lands.

Land value

“Once all the projects get executed, the State would still have over 10,000 acre which would have had the potential to generate about ₹1-2 lakh crore in revenues,” he said. Sharing these numbers, he called upon the Jagan government to see the benefits of setting up the new capital and go ahead with its construction, instead of finding loopholes, and worrying about financing the projects.

He also said that the new government has been talking about a number of welfare schemes, but unless it generates revenues, all these schemes would remain on paper.

He hoped that the people would put pressure on the government to execute the capital city project and attract fresh investments into the State.

Published on November 28, 2019
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