After World Bank Drops Amaravati Project, AIIB To Take A Call Next Week

A day after World Bank pulled out $300 million lending to the Amaravati Capital City project in Andhra Pradesh, the second loan lender of the project, Asian Infrastructure Investment Bank (AIIB ), Friday said it will take a call next week on its involvement in the project.

AIIB spokesperson Laurel Ostfield told Outlook, “AIIB is aware that the World Bank has dropped the Amaravati Sustainable Infrastructure and Institutional Development Project from its investment pipeline. Our investment committee will be discussing our involvement in the project early next week.”

The Amaravati Capital City project, an ambitious project of former Chief Minister Chandrababu Naidu,  was to be co-financed by multilateral funding agency AIIB.

The World Bank website shows the status of the ‘Amaravati Sustainable Infrastructure and Institutional Development Project’ as ‘Dropped’.

A senior official told Outlook Thursday that the government has withdrawn its request for financing the project.

In 2014, former Chief Minister N Chandrababu Naidu had announced Amaravati as the proposed capital city, to be developed over many years.  Naidu had envisaged Amaravati as the newest metropolis of India, spread over 217 square kilometres. The Singapore government had prepared the master plan for the same.

Environmental activists, farmer leaders, and civil society organisations opposed and criticised this project for building the city on the floodplains of river Krishna, diverting fertile farmlands and forests, displacing around 20,000 families, acquiring lands, and allegedly favouring contractors for the construction of the city.

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.