VIJAYAWADA: With uncertainty prevailing over various projects in Amaravati including the ‘Start-up’ area to be developed by the Singapore Consortium, Singapore in-charge Trade Minister S Iswaran, who was instrumental in the State government signed a pact with the island nation, said that the firms were evaluating the impact of the new government’s decision to review the capital city works on their investment opportunities. The announcement has come at a time when speculation is rife that the consortium expressed its willingness to exit the project amicably.
Even though the agreement between Singapore Amaravati Investment Holdings Ltd (SAIH) and Amaravati Development Corporation Ltd (ADCL) was signed in June 2018, when Iswaran announced that significant progress would be made in six months, the project remained a non-starter.
With the change of guard in the State in May this year, the Singapore government has been closely watching the developments with the new dispensation deciding to review all the capital city projects and put Amaravati on the back burner.
Speculation is rife that the YSRC government may drop the Start-up area development. When asked about the status of the agreement with Singapore firms, a key minister in YS Jagan Mohan Reddy’s cabinet, hinting that the project would not be taken up, told TNIE, “The Singapore firms know what they have to do. They have agreed to amicably back out.” To a query on the international arbitration at London clause in the agreement, the minister said, “All issues are being examined to see that it is a win-win situation for both the parties.”
For the record, SIAH, consisting of Ascendas-Singbridge and Sembcrop Development Ltd, and ADCL together formed Amaravati Development Partners (ADP) to develop 1,691 acres of Start-up area, aimed at kick-starting economic activity in greenfield capital envisioned by the TDP government. While SAIH has 58 per cent stake in ADP, ADCL has 42 per cent.
Even though the previous TDP government last year infused capital into the ADP and also prepared the master plan for development of phase-1 of the project, it did not materialise.
The ADP had planned to pump in a total of `528 crore for the development of Start-up area over 5-10 years. In total, the ADP had chalked out proposals to spend over `2,100 crore for development of infrastructure. While the land was given by the ADCL, Singapore firms were to develop it and bring investments. The Start-up area was promoted as a project, once developed in 15 years, that would contribute a `1.15 lakh crore to the State’s GSDP. However, all that remains on paper now.
On Tuesday, Iswaran said the investment firms were assessing the situation. In his statement, he noted that the previous government of Andhra Pradesh sought Singapore’s assistance to master plan Start-up area and how Singapore Consortium was awarded the project through Swiss Challenge method.
“The collaboration is complemented by a G2G (government to government) Memorandum of Understanding between government of Singapore and the government of AP for training and capacity building, which was also endorsed by the government of India. The new State government of AP that took office on May 30 is reviewing its plans for capital city project, amidst its other priorities. In July, government of India withdrew its loan request of $300 mn to World Bank and Asian Infrastructure Investment Bank also subsequently withdrew $200 mn loan request. The Singapore Consortium companies are closely following these developments and evaluating the impact on investment opportunities,” he told Singapore Parliament.
To a supplementary question by Workers’ Party Non-Constituency MP Leon Perera on the investment made by the Singapore firms so far and if AP government doled out any incentives, Iswaran noted, “The investments made by companies is commercially confidential, so I am not privy to the details and therefore not able to respond. Secondly, with regard to any subsidies or grants by the government for investments made in the State, the answer is no.”