india

Updated: Jul 19, 2019 09:22 IST

The World Bank has “dropped” its plan to extend a loan of $300 million (nearly Rs 2,065 crore) to Andhra Pradesh for the construction of Amaravati, the new capital city of the state.

An indication to this effect was made on the World Bank’s website on Thursday. The website mentioned the present status of “Amaravati Sustainable Infrastructure and Institutional Development Project” as “dropped”.

The reason for the cancellation of the loan proposal is not known yet.

The newly-formed YSR Congress government headed by chief minister YS Jagan Mohan Reddy has pushed the Amaravati capital works down in its list of priorities.

However, a top official of the Andhra Pradesh Capital Region Development Authority (APCRDA), the implementing agency of the capital project, said there was no official communication from the World Bank on the loan cancellation.

The official, who did not want to be named, had earlier said the World Bank wanted to inspect the project works to know the current status and also refused to release the loan for the completed infrastructure works.

“We asked the bank to give us a month’s time to submit a revised proposal for the loan for new works,” he said.

Official figures show the total cost of the project proposed to the World Bank by the previous Telugu Desam Party (TDP) government headed by N Chandrababu Naidu in 2016 was $715 million, of which the bank had committed to extending assistance of $300 million.

While the project was under examination of the World Bank, it received a large number of complaints from farmers who had refused to surrender their lands and also some NGO representatives, saying that the Amaravati project was not sustainable and was being constructed in violation of environmental laws.

Subsequently, a team of officials from the World Bank inspected the capital region and interacted with the stakeholders and kept the loan proposal in abeyance. Later, the government sent a revised proposal in July 2018 stating that the National Green Tribunal had given its clearance for the project.

However, with the change of guard in the state and the new government not showing any interest in expediting the capital city project works, the World Bank dropped the loan proposal altogether.

Meanwhile, the Working Group on International Financial Institutions welcomed the World Bank’s decision.

“The Bank arrived at this decision after a series of representations from many people’s movements and civil society organisations over the past years,” the group said in its press release.

“We are happy that World Bank took cognizance of the gross violations involved in the Amaravati Capital City project, threatening the livelihood of people and fragile environment. After Narmada and Tata Mundra, this is the third major victory against the World Bank Group,” it added.