Amaravati: A capital idea, but how feasible?

Andhra Pradesh chief minister N. Chandrababu Naidu has set a 2017 deadline for completing the first phase of Amaravati. Will he pull it off?


An artist’s impression of Amaravati, the Singapore-designed capital of Andhra Pradesh that’s taking shape on the banks of the Krishna river.
An artist’s impression of Amaravati, the Singapore-designed capital of Andhra Pradesh that’s taking shape on the banks of the Krishna river.

It’s perhaps the most audacious urban infrastructure project conceived in independent India: to build an entire state capital, a modern metropolis that would rival the world’s finest cities, from the ground up.

When Andhra Pradesh chief minister N. Chandrababu Naidu spelt out his vision for Amaravati in September 2014, based on a master plan prepared by Singapore’s Surbana Jurong Pte Ltd, the sceptics scoffed at it as a utopian dream.

They had their reasons. After all, India is a country where procuring land even to build a highway could take years and become snarled in endless red tape and litigation.

And where, they wondered, would the revenue-deficit state government find the money to build the capital, which would be spread over 217 sq. km with towering structures, glass facades, a central boulevard, wide avenues and footpaths, metro and riverway transport, walkways along a 35 km promenade, and elegant living spaces. A “blue-green” city, signifying water and tree cover, with the finest infrastructure India has ever seen, is what chief minister Naidu promised his people.

Naidu paid no heed to the sceptics. The government duly procured the land on the banks of the Krishna, India’s fourth largest river, between the cities of Vijayawada and Guntur, in one of India’s largest land pooling exercises.

Farmers in the would-be city of Amaravati gave away their lands to the state government in return for the promise of 800-1,000-square yard residential plots and 100-450 square yard commercial plots. For a 10-year period, farmers who parted with land will also be paid an annual compensation that would increase 10% (of the original amount) every year, the government said.

The sceptics were somewhat quietened when Prime Minister Narendra Modi laid the foundation stone of Amaravati on 22 October 2015, to the chants of Vedic hymns at a ceremony where water from 35 Indian rivers was mixed with soil procured from 13,000 villages and 3,000 wards of Andhra Pradesh, signifying bonding of the entire state with the capital.

Day in, night out

Nine months on, work is underway at a frenetic pace in the village of Velagapudi, where an army of workers has been deployed by two of India’s best-known construction firms, Larsen and Toubro Ltd (L&T) and Shapoorji Pallonji and Co. Ltd.

L&T is building four blocks of the government’s transitional headquarters, while Shapoorji is responsible for building two blocks.

The first of L&T’s blocks is closest to completion. Workers are toiling day and night to finish the project.

Inside the block nearing completion, electrical wiring is still being laid and overhead air-conditioners are being mounted. Elevators are yet to be installed and the building doesn’t have piped water yet.

Outside, the mud paths in the temporary secretariat complex are being turned into asphalted roads. The mud paths acquired infamy in Andhra Pradesh after the chief minister’s convoy got mired during one of his inspection tours of the facility. Left with no choice, Naidu stepped off his bus and toured the area in another vehicle.

These are but minor inconveniences in the building of India’s newest state capital. If chief minister Naidu has his way, the muddy paths will soon give way to 25-60 metre wide, black-topped roads, together with walkways and bicycling tracks.

Political stakes

At stake in the project is Naidu’s credibility, and, many agree, his political future.

Naidu is trying to finish the project by 2017, two years ahead of the next state election, when he will likely be judged on the progress made in the construction of the capital.

Sixteen years ago, as chief minister of a larger Andhra Pradesh state, Naidu was known as the architect of one of India’s top technology hubs: Hyderabad.

In June 2014, the state lost Hyderabad to India’s 29th and newest state Telangana, which was carved out of Andhra Pradesh. Overnight, Andhra Pradesh was left with no capital.

A hastily drafted legislation by the Congress party-led United Progressive Alliance government, which lost power in the 2014 general election, gave time till 2024 for Andhra Pradesh to build its capital.

Till that time, the state government could function out of Hyderabad, which would eventually become the exclusive capital of Telangana.

It was in these circumstances that Naidu’s Telugu Desam Party (TDP) was elected to govern Andhra Pradesh by the people who bet on him to replicate what he did in Hyderabad: build a thriving commercial enclave.

Sure enough, after a three-month wait and a lot of speculation, during which the price of land doubled in some areas, a formal announcement was made.

Andhra Pradesh’s new capital would be built from scratch on the farmlands abutting Krishna river, between Vijayawada and Guntur.

Clean slate

Critics questioned the need to build a concrete megapolis in place of multi-crop farmland in one of India’s most fertile and ecologically sensitive areas. And why build a new capital when the government could easily have designated one of the existing cities in Andhra Pradesh, with infrastructure ready, as the capital?

Naidu chose to start afresh because he did not want a city’s existing infrastructure to impede his vision of building a “world-class city” without the deficiencies of existing cities. He wanted to start with a clean slate.

His government is contesting the National Green Tribunal’s stand that the floodplains of the Krishna river and Kondaveeti Vagu will be damaged by construction.

Naidu sidestepped cumbersome provisions of the Land Acquisition Act, which would have made land acquisition on such a large scale almost impossible, by turning to land pooling.

The Capital Region Development Authority (CRDA), a body set up to plan, coordinate, execute, finance and promote Amaravati, took control of about 33,000 acres from farmers in 23 villages spread across three wards—Thullur, Mangalagiri and Tadepalli in Guntur district.

And in designing and implementing the project, he turned to Singapore, whose founding father, the late Lee Kuan Yew, is an idol of his. His government also reached out to the governments of Japan and China.

Eastern tilt

In doing so, Naidu tilted east, the fulcrum of the new world order, away from North America, whose companies helped him transform Hyderabad into one of India’s most prominent technology hubs in the late 1990s and early 2000s.

Three technical teams toured the world to study the best practices followed by modern cities in Brazil, Europe, China and Asia.

Andhra Pradesh had its first success when it signed a memorandum of understanding in December 2014 with Singapore to build a “world-class people’s capital”.

Under the pact, Singapore drew up three master plans, free of cost, for Amaravati—a capital region concept plan for an area spanning 7,420 sq. km, a capital city master plan (217 sq. km) and a seed capital detailed master plan (16.9 sq. km).

Amaravati is six times bigger than Chennai, the erstwhile British trading outpost that is now one of the biggest cities in southern India.

It will be the fifth planned capital in independent India after Gandhinagar, Chandigarh, Bhubaneswar and Naya Raipur.

Located at the northern end of the capital city, the seed capital will be the epicentre of power in Andhra Pradesh, accommodating its legislature, secretariat and high court, besides other government offices and residences of its political class and bureaucracy.

While the seed capital will accommodate 300,000 residents, the larger capital city will be home to 13.5 million people by 2050, according to the master plans developed by Jurong International Holdings Pte Ltd and Surbana International Consultants Pte. Ltd of Singapore.

“Singapore is the most well-managed city in the world,” urban planner Maheep Singh Thapar said. “When they (Andhra Pradesh) say we want to emulate Singapore, they want to bring in those efficiencies.”

Singaporean companies have been building cities in other countries for 20 years, said N. Srikanth, commissioner of the Capital Region Development Authority of Andhra Pradesh.

“Singapore consortium companies have developed similar cities in Tianjin, Guangzhou (China), and in Vietnam.”

The collaboration didn’t end with just Singapore. Chinese companies have shown interest in Amaravati, as have Japanese firms. At the same time, Andhra Pradesh is also seeking newer partners.

As recently as two weeks ago (10 July), Naidu expressed interest in working closely with the Kazakh capital, Astana, which is among the youngest capital cities in the world built completely from scratch.

Master architect

Tokyo-based Maki and Associates was chosen as the master architect for Andhra Pradesh’s 900-acre capital complex after it unanimously won a design competition beating London-based Rogers Stirk Harbour + Partners and Ahmedabad-based Vastu Shilpa Consultants.

Fumihiko Maki, who heads Maki and Associates, and Richard Rogers of Rogers Stirk Harbour are winners of the Pritzker Prize, widely regarded as the Nobel Prize of architecture.

Andhra Pradesh’s proposed capital complex, Maki said, is roughly the size of New York City’s Central Park. The Japanese architecture and planning firm has suggested incorporating some features of Central Park in Amaravati to serve as a green zone, a tourist attraction, and an attractive amenity for city residents.

Maki’s services, are, however, not free of cost. A committee appointed by the state government would finalize the financial terms with the master architect for designing the secretariat, legislature complex, high court, governor’s mansion and other important government buildings in Amaravati.

“If the buildings are not globally attractive, it will be difficult to draw investments,” said Thapar. “Since investments and investors are being attracted from across the world, it is important to make this a global attraction. But this also needs to be supported by world-class physical and social infrastructure.”

At the same time, Thapar added, it is the responsibility of the current state government, intelligentsia, bureaucracy, town planners, architects and urban activists to come together and ensure the character of the city is modern and yet it radiates an Indian-ness. “Some form of uniqueness should be brought in,” he said.

The state government is also looking towards Japan to develop the capital complex, Srikanth said. The capital complex will be funded by state and central governments, he said.

Just as he did with Cyber Towers in Hyderabad in 1998, Naidu plans to market an eye-catching government complex to attract potential investors.

The complex will also help him bolster his credentials among the state’s citizens, who could turn hostile to the chief minister if there is no progress on the ground before 2019, when Naidu will seek re-election.

Funding leeway

Naidu, whose TDP is an ally of the National Democratic Alliance (NDA) at the centre, will have decent leeway, in terms of funds, to build a model capital zone.

An expert committee appointed by the Union government estimated Rs.27,097 crore as the cost of building Amaravati. The committee recommended an allocation of Rs.10,519 crore for capital zone buildings, Rs.1,536 crore for capital zone infrastructure, Rs.5,861 crore for city infrastructure and Rs.9,181 crore for city infrastructure growth extension, Union home affairs minister (state) Haribhai Parthibhai Chaudhary said in a written reply to a question in Parliament in December. To be sure, only Rs.1,850 crore was disbursed to the state during 2014-15 and 2015-16.

“The government will not build everything that you see in the designs. Private players will also participate. Eventually, if you have good infrastructure in place, private investments will come. Cyberabad (the information technology hub of Hyderabad) was mainly developed with the help of private investments,” a member of the capital advisory committee, a government-appointed body of top Telugu industrialists, said, requesting anonymity.

Swiss Challenge

In June, two years into its tenure, the state government zeroed in on a Singapore consortium to develop a land parcel of 6.84 sq. km, or around 40% of the core capital area, in three phases in Amaravati under the Swiss Challenge method.

Ascendas-Singbridge Pte. Ltd and Sembcorp Development Ltd, which develop urban solutions, submitted a proposal to be master developer for 1,691 acres. The consortium has offered a 42% stake to Amaravati Development Company, a special purpose vehicle of the state government, which, together with the Singapore consortium, will jointly develop the core capital area.

Of the 1,691 acres proposed to be developed, 50 acres will be given to the consortium at a nominal price. The consortium has offered to pay Rs.4 crore per acre for 200 acres under the first phase of development, Naidu said in June.

The consortium will develop infrastructure such as roads, sewer network and water supply, to begin with.

The consortium has no timeline and will develop its land parcel in line with market demand, Srikanth said. “If there is market demand, the development will be faster. If the demand is sluggish, it will be phased over a certain period,” he said.

Because the state government is following the Swiss Challenge method to build the greenfield capital, the Singapore consortium’s proposal will be challenged by other potential master developers.

If a competing proposal beats the one proposed by the Singapore consortium, and if it fails to match the competing plan, the mandate to build the capital goes to the other party.

On Monday, 18 July, the Capital Region Development Authority invited competing bids from other prospective master developers by 1 September.

Naidu, meanwhile, appears to be banking on an internationally recognized developer like Ascendas to bring private capital and some of the world’s top brands to Amaravati.

It makes immense economic sense to have a partner like Ascendas on board to attract big-ticket brands such as Teradata, Electronic Arts, HCL, Cognizant, GE, Datamonitor into Amaravati, one real estate consultant noted.

“Ascendas has a large client base in Asia. It has the ability to attract clients and is a known brand. It is a good decision,” Veera Babu, managing director of Cushman and Wakefield’s Hyderabad office, said.

Andhra Pradesh is also working with the Japanese government to build Amaravati. The Japan Bank for International Cooperation (JBIC) and the Andhra Pradesh finance department signed an in-principle agreement for capital development and industrial development in October 2015.

Chinese infrastructure firm Guizhou International Investment Corp. has been appointed the infrastructure consultant to offer detailed designs pertaining to infrastructure facilities such as roads, drinking water, sewage and electricity systems, among others, for parts of the capital city area.

Moving government

Much like he led the growth of Cyber Towers and Gateway in Hyderabad with the help of L&T back in 1998, Naidu will open up other areas of Amaravati to developers as the city grows.

“From a long-term growth perspective, it cannot be restricted to one partner on the development side,” Babu noted.

In the meantime, the state government has begun moving its machinery, including 32 departments and 89 directorates, from joint capital Hyderabad to Vijayawada, eight years ahead of the 2024 deadline.

Prime Minister Narendra Modi (right), and Andhra Pradesh chief minister Nara Chandrababu Naidu (left) at the laying of the foundation stone of Amaravati on 22 October 2015. Photo: PIB
Prime Minister Narendra Modi (right), and Andhra Pradesh chief minister Nara Chandrababu Naidu (left) at the laying of the foundation stone of Amaravati on 22 October 2015. Photo: PIB

The shift has been welcomed by analysts, even if it means that the Andhra Pradesh government would have to make do with a scattered set-up for now. The presence of government employees will pave the way for social infrastructure such as schools, hospitals, movie theatres and restaurants in the vicinity of the upcoming capital.

Social infrastructure being in place will make it easier to attract private companies, whose employees may otherwise be reluctant to move to Amaravati.

“It is a good decision he (Naidu) made. Waiting for 10 years would have postponed growth,” pointed out Babu. “It will help in the long term. You can now expect social infrastructure to come up faster.”

Naidu is also actively engaging with industry bodies to set up base in the new capital.

The Confederation of Indian Industry, or CII, will open a centre of excellence for start-ups in Amaravati and make the city its hub for start-up activities in the country.

The master plans envisage the creation of 1.8 million jobs in the capital city by 2050, by which time the larger capital region would have 5.6 million jobs.

To give the city an international character, the landscaping plan of the proposed capital complex designed by Japan’s Maki also has areas dedicated for foreign consulates and offices of international agencies such as the United Nations.

This reflects Naidu’s global ambitions, said Thapar. “Cities are getting globalized for a long time now and are directly competing with each other,” said Thapar. “It is clear that Naidu is thinking on that level. He wants to put a foundation which will lead to that level.”

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