VIJAYAWADA: The World Bank loan issue rocked the Andhra State Assembly Monday as the ruling YSRC and the opposition TDP members traded charges.
Finance Minister Buggana Rajendranath made a statement on the World Bank’s decision to drop the USD 300 million loan proposal for the Amaravati Sustainable Infrastructure and Institutional Development Project.
Refuting the allegations of the TDP that irresponsible attitude of the State government has led to such a development, Buggana said that the opposition should remember that the new government was formed just 45 days ago.
Squarely blaming the previous TDP regime for the delay in getting the World Bank loan and its subsequent withdrawal, he said that the TDP was attempting to attribute its failure on the YSRC government. Levelling serious charges of corruption and irregularities in Amaravati projects, he pointed out that a contract was awarded for construction of a one-km road at a cost of Rs 32 crore. Is the road leading to heaven? he wondered.
The Finance Minister said that based on proposals submitted by the State government, the Department of Economic Affairs (DEA) cleared the loan proposal for funding from World Bank and Asian Infrastructure Investment Bank (AIIB). “Later both the banks conducted five joint missions and several individual missions. The project was named ‘Amaravati Sustainable Infrastructure and Institutional Development Project’ with an outlay of USD 7,125 million (around Rs 5,000 crore). The loan component was to be shared between the World Bank and AIIB USD 300 million (Rs 2,100 crore) and USD200 million (Rs 1,400 crore) respectively and the share of the State government was to be USD 215 million (Rs 1,500 crore),’’ he said.
“Anticipating project approval, the then government launched 10 road works (92 kms) at an estimated cost of Rs 1,872 core and works on 48.3 kms of canals and reservoirs with a capacity of 0.56 TMC at an estimated cost of Rs 947 crore. Later, the World Bank informed that the contracts awarded for seven roads were not eligible for financing and the cost would have to be borne by the State government,” he said.
A number of representations were made by a large number of landowners and NGOs to the Independent Accountability Mechanism (IAM) of the World Bank regarding certain commissions and omissions in the design of the project and its alleged environmental, social and economic impact. IAM’s inspection panel visited Amaravati from September 13 to 16, 2017. World Bank did not consider the loan proposal as the inspection panel recommended an investigation into alleged issues of harm and related potential non-compliance with livelihood restoration.
He said the Union Department of Economic Affairs requested the State government to convey its stand by July 1, but the latter sought time till July 31 as a detailed inquiry was underway. The DEA then demanded a response by July 15 as the Centre had to take a stand on allowing inspection prior to approval of the project, “a practice that was unprecedented in the history of India’s relationship with the World Bank”, he said.
The State government on July 15 told the Centre that the DEA may take an apt call on further course of action and based on its own assessment the Finance Ministry had informed the World Bank to drop the project. Based on its own assessment, the Union Ministry of Finance informed World Bank to ‘Drop Amaravati Project’ on July 16. The World Bank was reported to have accepted the DEA proposal and informed it would be happy to support additional proposals for financing from the AP government, the Finance Minister added.
“In fact, impressed by the good governance and development agenda of our government, the World Bank has sanctioned a new USD 328 million support to the State health sector and a pact would be signed on July 27, 2019. The World Bank has said that the programmes and Navaratnalu framework of the government are in perfect harmony with its development priorities and assured that it will increase its assistance to the State.”