The Andhra Pradesh government on Wednesday defended its move to close down the 'Start-up Area Project' within Amaravati, stating that it was not found feasible. The state government added that they had mutually agreed with the Singapore Consortium to call it off.
In a statement, state Finance Minister Buggana Rajendernath said that it was not found feasible to take up such a huge project, which involved a huge investment from the state government.
"A Start-up Area Project within Amaravati city, was proposed to develop an area of about 16.91 acres by a company called Amaravati Development Partners Limited which in turn consisted of a few Singapore companies namely Ascendas Sinbridge and Sincorp and Amaravati Development Corporation belonging to the Andhra Pradesh government,â€ť he said.
The consortium, which was appointed in 2017 by former Chief Minister N Chandrababu Naidu, was aimed at boosting economic activity in the region.
â€śThe proposal was that the Singapore Consortium would have an equity of 58% while the Amaravati Development Corporation would hold an equity of 42%," the minister added.
The Minister said that during deliberations, it was noted that the region under the Capital Region Development Authority (CRDA) was about 217 sq.km, roughly twice the size of Mumbai and its suburbs.
"During deliberations, it was realized that it requires about Rs 2 lakh crore to develop the entire capital area, which is the size of the state's annual budget. Unless that amount is spent and the whole area is developed, there is no meaning of having a business district in it," Rajendranath said.
"One can understand that the project would take decades to be completed and which cannot be done within a span of five years. Neither the time permits nor the finances permit this sort of development in such a short time," he added, stating that the YSRCP government was looking at "holistic development of the entire state with 13 districtsâ€ť.
The Finance Minister said that taking all this into consideration, the decision was made to drop the project, in the best interest of the state.
A press release from the Singapore government's Ministry of Trade and Industry on Tuesday also stated that the decision was taken mutually.
In a statement, Singapore's Minister-in-charge of Trade Relations S Iswaran said, "Companies recognise such risks when venturing into any overseas market and factor them into their investment decisions. In this instance, the Singapore Consortium companies have stated that the project has cost them a few million dollars, and that its closure does not impact their investment plans in India."