Capital Region Development
Under the Projects and Operations of the World Bank, the status of Amaravati Sustainable Infrastructure and Institutional Development Project is “Dropped”.

In what is a major setback to Andhra Pradesh, it seems that the World Bank has pulled out of the Capital Region Development Project. The World Bank had committed to provide a loan of 300 million USD. However, going by its official website, the status of Amaravati Sustainable Infrastructure and Institutional Development Project is “Dropped”.

Amaravati was the brainchild of former Andhra Pradesh Chief Minister Chandrababu Naidu, who envisioned a massive megacity encompassing the area of 29 villages between Vijayawada and Guntur, a project mired in controversy from the beginning. The decision by the World Bank could seriously hit the works being carried out in Amaravati, and mount a major challenge to the newly formed government by YSRCP.

While the status of the project changed on the website, there seems to have been no official communication from the bank to the government.

Andhra Pradesh Capital Region Development Authority, Commissioner Dr. P. Lakshminarasimham, told Outlook, that there was no official word from the World Bank yet. 

The APCRDA had sent in its application in 2016 seeking the loan of which World Bank would lend $300 million and the remaining $200 million would come from Asian Infrastructure Investment Bank (AIIB).

However, the loan process got stalled after activists and affected farmers from the Amaravati capital region approached the bank and filed a complaint. They contended that the the capital was coming up on fertile agricultural land. They also said that the loose sand along the river bank would not be conducive to heavy construction. They also alleged that the capital region included the flood planes of the Krishna river and the city would be prone to floods. But the major opposition was against the Naidu government's land pooling method to acquire land for the capital.

An inspection panel also visited the state in 2017 to investigate the alleged irregularities in land procurement and other claims made by the farmers, following which they submitted a report to the international agency.

Petitions were also filed with the National Green Tribunal and the Supreme Court.

Reacting to the news, Mallela Sheshagiri Rao from the Capital Region Farmers Federation said, “With uncertainty hovering above us in respect to our land and livelihood, we had suffered sleepless nights with fear and pain. The struggle has made a mark in our lives that we can never forget. We hope the larger message of World Bank’s pulling out of this project will be heard by the state and other financiers and will address the concerns of people with honesty and commitment.”

“We are happy that World Bank took cognisance of the gross violations involved in the Amaravati Capital City project, threatening the livelihood of people and fragile environment,” said Medha Patkar, senior activist of Narmada Bachao Andolan and National Alliance of People's Movements.

With the World Bank seemingly pulling out, sources say that a loan commitment made by the Asian Infrastructure Investment Bank (AIIB) is also uncertain.

After Jagan Mohan Reddy took over in May, all construction for the project was put on hold. The state government has said that it is reviewing its finances and is also likely to modify the plan.

Read: What happens to Amaravati? On the ground, ambiguity remains