After a hiatus of five years, Amaravati, once a city with rich Buddhist and Satavahana heritage, is being resurrected as capital of the rich south Indian State.

“The Government shall not juggle around with the future of State in the name of three capitals. Amaravati shall be our capital and the city of Visakhapatnam shall be developed as a financial hub,” Chandrababu Naidu, the Chief Minister of Andhra Pradesh told a NDA Legislative Party meeting after returning to power in June this year.

Plans for Amaravati’s development as the capital were deferred during the earlier YSR Congress rule which favoured a three-city formula to run the state where legislature would be in one city, high court in another and the executive would sit in a third.

Land Pooled By Farmers To Build New Capital 

The capital region which spreads over 217 sq km along the Krishna river in Guntur district in the heart of Andhra Pradesh is one of the fertile areas of the State. It was conceptualized in 2015 wherein the farmers contributed their land under a land-pooling mechanism, receiving an annuity for 10 years and a portion of the developed land in return for their contribution. 

This was the first of its kind mechanism of pooling land on a large scale of upto 34,000 acres from around 25,000 farmers in 24 villages in the region and the fastest one within a time period of 6 months. The objective was “Making land the primary mode of exchange instead of money thereby reducing the pressure on the State’s finance”.

Amaravati’s master plan was developed by renowned London-based Foster & Partners and it was touted to be one which promoted sustainability. During his visit to Amaravati, Norman Foster remarked, “This is a design that brings together our decades-long research into sustainable cities, incorporating the latest technologies that are currently being developed in India”.

The then TDP government had awarded the master developmental rights for the start-up area in Amaravati to a Singapore consortium consisting of Ascendas-Singbridge and Sembcorp Development.

State Of The Art Capital Divided Into Nine Zones

It was envisaged to be developed as a state-of-the-art capital with world class standards duly segregating it into nine zones, namely government, sports, health, electronics, tourism, knowledge, finance, justice, and media city.

The government headed by Jagan Mohan Reddy which came to power in 2019, had scrapped the Amaravati project turning it into a ghost city leading to several bigwigs including the World Bank which had committed a loan of $300 million (Rs 2,100 crore) and Asian Infrastructure Investment Bank (AIIB) with a proposed $200 million (Rs 1400 crore) loan being left high and dry.

The capital development project was also marred with various legal controversies, subsequently in 2022, after various court battles, the AP High Court ruled that the government could not scrap the development of Amaravati, especially since they had signed an agreement, and asked the government to develop it within six months.

The High Court also asked the government to stick to the capital city’s master plan as approved by the previous government and develop the nine theme cities accordingly in the capital region. However, the state government challenged this order in the Supreme Court, which eventually put a stay on the High Court’s decision.

As the incumbent government came into power, it found the only functional buildings in Amaravati were the High Court and the Legislative Assembly of Andhra Pradesh. The rest of the city was a ghost town with blocs of semi-constructed building and roads with slime leading to nowhere.

Cleaning Up A Half-Finished City 

The preliminary work of cleaning up the place itself was a huge task. Staring the government in the face is the much more daunting task of completing the job and turning Amaravati into a functional city. The cost of repairing the damage that time has wreaked on the half-finished city plus the cost of finishing it will be huge.

The tech savvy Chandrababu Naidu, has led the development narrative earlier too in developing Hyderabad, and is expected to bring the same vigour this time round too.

Revised estimates of project cost are now being placed at Rs 1 lakh crore. Officials point out that the cost of building material itself has gone up by 35 per cent in the meanwhile.

Considering the current political equations in the alliance, Naidu has the requisite political muscle to revive the Amaravati project, since he is a key partner in the NDA which rules India’s central government. Policy support as well as central funding for the project should not be a problem, feel analysts.

New Funders & Monetisation Plans

Nonetheless, finding new funders who will be willing to bridge the difference between committed funding and the revised estimates will be a challenge for any administration. One possibility of completing the grand project is to monetise part of the land holding – estimated to be worth Rs 2 lakh crore.

However, given the fact that Andhra Pradesh has been one of the better governed States with an enviable GDP growth rate of over 98 per cent in the eleven years between 2011-12 and 2022-23 and it aims to be a new Silicon Valley within India, finding partners and buyers of the dream project may not be that difficult, though still a formidable task.

Ashish Choragudi is a public policy professional, researcher with an experience in handling a range of projects