Andhra Pradesh Minister alleges big scam in Amaravati project

Maitri Porecha New Delhi | Updated on October 06, 2019

Mekapati Goutham Reddy, Minister for Industries & Commerce and IT, Andhra Pradesh   -  K_R_DEEPAK

‘Probe shows nexus between former CM Naidu and some companies that bought land in the proposed capital city’

Five companies have acquired 60 per cent of the land in Amaravati, the newly formed State capital of Andhra Pradesh, alleged Mekapati Goutham Reddy, Minister for Industries & Commerce and Information Technology, Andhra Pradesh. Reddy was speaking to BusinessLine on the sidelines of the India Economic Summit here.

Reddy said investigations have wrevealed that there were some related-party transactions between the government of former Andhra Pradesh Chief Minister Chandrababu Naidu and the companies in question. “A few people had indirect or direct access to the prior information of development of this capital city. They had the advantage of first information and went ahead to procure land against the norms,” said Reddy.

He further said that a Cabinet sub-committee had been formed to look at the processes of procurement of land and awarding of contracts. “It is empowered to understand that if there have been mala fide intentions, the matter will go to the vigilance department and the courts,” he said. The sub-committee will submit its report within a month or two. Reddy said of the 33,000 acres in question, up to 4,000-5,000 acres was truly rich agricultural land. “The builders started building on the fertile plots first. We have taken one of the most rich agricultural land available in the State of Andhra Pradesh and converted it into urban land, while we see agricultural land diminishing across the State,” he said. While before division of the State, its debt stood at ₹1-lakh crore, post division it stands at ₹2.6 lakh crore. Reddy said, “While we stood first for ease of doing business over the last two years, we have not created capital inlay as investments have been negligible. Sixteen to 18 per cent of our Budget goes in servicing of the debt interest. In the case of Amaravati that debt is in excess of ₹20,000 crore, but there are no net generators at all. We don’t mind if somebody takes the money and asset creation takes place, but today we have to bear the burden of borrowed money while there is no asset creation at all,” he said.

Reddy said the previous government was very good at promoting what it has done. “I must compliment Naidu on being a good marketing gentleman, I must give it to him, but you cannot depend on marketing alone, you need to look at the reality. Today the net benefit that we have got is five buildings and some roads that have not been completed, that is what has happened in five years,” he said. The earlier deadline for completing the capital city was December 2018, which has been missed.

Reddy further said, “Let us be realistic. We will bring Amaravati down to a small capital, lets not get into the ego that we want to build a world-class capital. According to me, even if 5-10 per cent of this would have been invested in Vizag we would have realised a greater potential,” he said. Thousands of farmers were affected when close to 5,000 acres was taken away for development. “The farmers have been promised shareholding and some net development rights, but when is the city going to come up? Rehabilitation of farmers is a big challenge for us right now. They have vacated their land and given it to us,” Reddy said.

After certain non-profit organisations and farmers went to court over World Bank lending money for Amaravati project, the bank ordered a ground-level investigation which had alleged that not all land was acquired willingly. After putting up the report on the World Bank Website for a brief while, it was retracted citing official approvals were not taken to make the report public. The report has not been made public till date. To add to the twist in the tale, according to a World Bank press release on July 21, the Government of India (GoI) withdrew its request to the World Bank for financing the proposed Amaravati Sustainable Infrastructure and Institutional Development Project. This led the bank to drop the $300-million funding request for the project.

Published on October 06, 2019

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