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Start-up Area Project was not financially feasible: AP FinMin

M Somasekhar Hyderabad | Updated on November 13, 2019

Andhra Pradesh Finance Minister Buggana Rajendranath   -  :HANDOUT_E_MAIL

“The Start-up Area Project in Amaravati city was closed as it was not found feasible,” Andhra Pradesh Finance Minister Buggana Rajendranath said here today.

Elaborating, the Minister said, “The Start-up Area Project within Amaravati city was proposed to be developed by a company called Amaravati Development Partners Ltd which in turn consisted of Singapore companies Ascendas Sinbridge and Sembcorp as also the AP Government’s Amaravati Development Corporation.

“ The proposal was that the Singapore Consortium would have an equity of 58 per cent and Amaravati Development Corporation 42 per cent. During the deliberations with the Singapore Consortium, it was realised that the 1,700 acres for the project was a small part of the huge city that was proposed to be developed along with the area around it which comprises the CRDA (Capital Region Development Authority), totalling about 217 sq km, that is, roughly about twice the size of Mumbai including Navi Mumbai and suburbs,” he said in a statement.

Rajendranath explained that “Within this CRDA, there again is a city called Amaravati, which is roughly about one lakh acres. This area was proposed to be acquired by way of 35,000 acres of fertile tracts belonging to various owners by way of land pooling and about 10,000 acres of government land. It was also proposed to acquire over 40,000 acres of forest land; the then AP government had requested the Government of India to deforest an existing forest. Thus, Amaravati Start-up City was to be a part of the CRDA, that is, 1,700 acres within the one lakh acres.”

During deliberations, it was also realised that to develop the one lakh acres about ₹2 lakh crore would be required which is the size of the State annual budget. Unless that amount was spent and the whole area developed, there would be no meaning in having a business district in it, the Finance Minister said.

The State government also realised the need to develop infrastructure, health, industries, employment to youth and the holistic development of all the 13 districts. In this scenario, it was realised that the development of 1,700 acres alone would neither be easy, as thought so by the previous government, nor viable. Therefore, it was decided to wind up the company in the best interest of the State.

Published on November 13, 2019

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