World Bank dropped Amaravati loan at Centre’s behest

The World Bank representative did not reveal if the Indian government cited any reason for withdrawing the loan request.

Published: 20th July 2019 05:42 AM  |   Last Updated: 20th July 2019 05:42 AM   |  A+A-

The World Bank building entrance

The World Bank building entrance (File | AFP)

Express News Service

VIJAYAWADA: A day after the World Bank ‘dropped’ $300 mn loan for Amaravati, it has come to light that the decision was taken following a communication from the Central government earlier this week.

World Bank Senior Communications Officer (South Asia) Elena Karaban told TNIE, “Earlier this week, the Government of India has withdrawn its request to the World Bank for financing the proposed Amaravati Sustainable Infrastructure and Institutional Development Project. The World Bank’s Board of Executive Directors has been informed that the proposed project is no longer under preparation following the government’s decision.”

The World Bank representative did not reveal if the Indian government cited any reason for withdrawing the loan request. The lending agency generally accepts the decision of the member state if the latter wants to withdraw loan application for a project. The Department of Economic Affairs (DEA), Ministry of Finance, deals with projects related to World Bank financing. 

The World Bank’s decision has come as a shocker to the Andhra Pradesh Capital Region Development Authority (APCRDA), which hasn’t received any communication from the DEA. Sources said officials from the authority had a meeting with World Bank representatives just a few days ago, but nothing was informed even then.

For the record, the previous TDP regime, in 2016, through the Centre, sought a loan of $500 mn to construct Amaravati under Externally Aided Project (EAP) programme. However, the application was put on hold following letters from a few farmers in the capital region in May, 2017, who alleged widespread irregularities in land procurement.

The World Bank reportedly wanted to dig deeper and the same was communicated to the State government earlier this year. With the change of guard, the State officials, through the DEA, reportedly sought time to consider the lending agency’s request. However, the Centre, it is learnt, wasn’t keen on a probe by an international agency, prompting it to withdraw its loan request. For processing the loan, the World Bank needs a sovereign guarantee from the Centre. 

The World Bank pulling out of the deal triggered a blame game between the YSRC and the Opposition TDP. While TDP supremo N Chandrababu Naidu, under whose leadership the loan was sought, held the YSRC government responsible for the World Bank backing out of the commitment, the ruling party leaders claimed that ‘irregularities’ committed during the TDP’s rule were the reason.

Speaking to a news channel, YSRC MP and the State’s Special Representative in New Delhi V Vijayasai Reddy said the World Bank wanted to send a team to investigate complaints by farmers from Amaravati alleging irregularities in land procurement. He was quoted as saying that if a probe was needed, the State government would conduct it and that the State government was against probe by a foreign agency.

From his remarks, it appears that both the Centre and the Jagan government are on the same page. Nonetheless, the Centre hasn’t cleared the air yet.

TDP chief Chandrababu Naidu, in an informal chat with reporters in the Assembly lobby on Friday, remarked, “Who instigated the farmers to complain? Wasn’t it YSRC? The present government is responsible for the bank backing out.” The TDP also moved an adjournment motion for a debate on Amaravati in the Assembly, but the Speaker rejected it.

YSRC Chief Whip G Srikanth Reddy quickly hit back at Naidu saying that the TDP was carrying on a false propaganda. “The TDP committed atrocities and irregularities in the name of land pooling. This prompted the farmers to write letter to the World Bank. The same has been confirmed by the Working Group on International Financial Institutions as well,” he said at the Assembly’s media point.

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