Andhra Pradesh govt’s nod to raise Rs 3,000 crore for Amaravati

Cabinet clears proposal to extend govt guarantee for fund mobilisation for infra works, LPS layouts’ development 

Published: 24th February 2021 08:19 AM  |   Last Updated: 24th February 2021 08:19 AM   |  A+A-

Dhyana Buddha statue at Amaravati in Guntur

Dhyana Buddha statue at Amaravati in Guntur. (Photo | EPS)

By Express News Service

VIJAYAWADA: In a move that indicates that the State government is fast-tracking the three-capital plan, the Cabinet on Tuesday approved the proposal for extending government guarantee to raise Rs 3,000 crore from banks for the development of trunk (roads and allied) infrastructure and Land Pooling Scheme (LPS) layouts for farmers in Amaravati region.

Though Information and Public Relations Minister Perni Venkataramaiah (Nani) did not divulge the same during the press briefing after the Cabinet meeting, he asserted that the Jagan Mohan Reddy government will take steps to increase the value of plots given to farmers of Amaravati.

“The Cabinet has cleared the proposal to extend government guarantee for mobilisation of Rs 3,000 crore for infrastructure (roads) development and LPS layouts in Amaravati region,” a statement from the government after the Cabinet briefing said. Interestingly, the minister did not reveal it. In fact, to a query on decisions pertaining to Amaravati, Perni Nani said, “As decisions related to Amaravati development have already been taken and allocations for the same are made, there were no proposals that need a resolution by the Cabinet.”  

According to sources, the Amaravati Metropolitan Region Development Authority (AMRDA), after consultations with the Municipal Administration and Urban Development and Finance Ministers and secretaries in the last week of December, has decided to go for a loan of Rs 10,000 crore from a consortium of banks for development of various projects. 

In the first phase, sources said, the AMRDA wanted to raise Rs 3,000 crore. Though the government has been looking for funds, it is said that banks, which had already lent money for various projects, were sceptical due to the ‘uncertainty’ following the State’s decision to ‘review’ the scope of the capital city and the proposed relocation of executive seat to Visakhapatnam. However, officials claimed that a consortium of banks positively responded to lend about Rs 3,000 crore provided that the government extended sovereign guarantee. 

It may be recalled that the AMRDA (previously APCRDA) had tapped Rs 2,060 crore from three banks — Andhra Bank, Vijaya Bank and Indian Bank — for various housing projects, and the government in October 2018 gave guarantee for raising another Rs 10,000 crore from banks for trunk infrastructure and LPS layouts. The latter has not been sanctioned, according to the AMRDA statement last year. 

Subsequently, the government formed a nine-member panel earlier this month to take a call on “whether to fully execute (unfinished projects in Amaravati) or to explore the means of reducing the burden on exchequer”, and the committee chaired by the Chief Secretary preliminarily decided to go ahead with projects which achieved about 75 per cent of progress. 

Principal Secretary (MAUD) Y Srilakshmi, in the committee meeting two weeks ago, noted that Rs 2,112 crore was needed for completion of unfinished housing projects, besides Rs 302 crore for clearing pending bills. The committee is scheduled to meet again in the first week of March.

“What the farmers want is appreciation of the value of land allotted to them in return for the land they had given under LPS. We will take all steps for ensuring the land value appreciation and the region’s development by way of urbanisation. The government was never against Amaravati development and it has only emphasised on balanced development of all regions,” Nani added.

He said unlike the empty promises of former Chief Minister N Chandrababu Naidu, the State government has already initiated works of National Highway and development of village roads in Amaravati region linking them to the highway. “Construction of a barrage and a bridge connecting both banks of the river are on anvil,” he said.

Assembly resolution against VSP disinvestment  

The State Cabinet on Tuesday decided to move a resolution in the ensuing budget session of the State Legislative Assembly against the disinvestment in Visakhapatnam Steel Plant. Minister Perni Nani said the Chief Minister has already written a letter to Prime Minister Narendra Modi and others in the Central government requesting them to reconsider the decision to privatise VSP and, at the same time,  suggested alternatives to develop the steel plant. 


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