World Bank 'drops' USD 300 million Amaravati project

A major confusion prevailed after the World Bank dropped USD 300 million project in Andhra Pradesh's Amaravati. But now reports have surfaced saying that the project was dropped after a request came in from the Government of India's Finance Ministry.

Elena Karaban the Senior Communications Officer for World Bank, South Asia told the News Minute, "The Government of India has withdrawn its request to the World Bank for financing the proposed Amaravati Sustainable Infrastructure and Institutional Development Project.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."

It came as a major setback to the Andhra Pradesh government after the World Bank pulled out from a key project for development of new state capital Amaravati. The World Bank website Thursday showed the status of Amaravati Sustainable Infrastructure and Institutional Development Project as 'dropped'.

When asked why the Government of India dropped the loan request for Amravati, the World Bank official told the News Minute, "All decisions on World Bank financing for projects are made by the Department of Economic Affairs in the Ministry of Finance, Government of India. As per normal procedure, the Bank accepts the member state’s decision not to move forward with a project."

The development came after the YSRCP government came into power. The ruling party YSRCP has alleged that the project was dropped because of irregularites in the project. YSRCP MP Vijayasai Reddy told the News Minute, “There were a lot of complaints about



irregularities in the construction of Amaravati; irregularities committed by the previous Naidu government. The World Bank had received numerous complaints on these irregularities. The World Bank had sought permission to conduct an inquiry. Understandably, the Home Ministry was concerned and so was the Andhra Pradesh government, that a foreign agency would conduct an investigation in a sovereign nation like India.”

Amaravati is the brainchild of N. Chandrababu Naidu, who suffered crushing defeat in the recent elections. After forming first government in residuary state of Andhra Pradesh following bifurcation of united Andhra Pradesh in 2014, Naidu had announced developing Amaravati near Vijayawada as the new state capital. The Singapore government had prepared the master plan for the same.

Under Naidu's ambitious plans the capital city is to come up in areas of 217 sq km. Under the first phase from 2015 to 2025, the state capital was to be built at a cost of nearly Rs 50,000 crore while the subsequent two phases were estimated to cost over Rs 1 lakh crore. Naidu's government had claimed that farmers voluntarily came forward to give 33,000 acres under an innovative land pooling system to develop the state capital. He had also succeeded in launching the works to the tune of Rs.35,000 crore over last two years.

After taking over as the new chief minister in May, Y. S. Jagan Mohan Reddy had alleged that there was a big land scam in Amaravati to benefit then chief minister and those close to him. He had declared that the government will get the irregularities in land acquisition and awarding works for various projects thoroughly probed.