india

Updated: Sep 13, 2019 17:41 IST

The World Bank pulled out of Amaravati capital city project of Andhra Pradesh in July, as the newly formed YSR Congress party government apparently did not show interest in pursuing the proposal to borrow US $300 million loan from the bank.

This was revealed in an RTI reply given by the Centre to a Guntur-based M Sambasiva Rao last week.

According to the information obtained through the RTI petition, the Department of Economic Affairs in the Union ministry of finance took up the matter with the officials of the AP Capital Region Development Authority (APCRDA) on June 4, five days after Jagan took over as the new chief minister, on the World Bank loan under Amaravati Sustainable Infrastructure and Institutional Development Project.

The APCRDA authorities conveyed to the DEA that the chief minister would take a call on the capital city at a meeting on June 6. However, the state government did not take any decision on the matter.

Recalling these developments in his letter to chief secretary L V Subrahmanyam dated June 24, Additional Secretary in finance ministry Sameer Kumar Khare pointed out that the World Bank was likely to initiate an investigation by its investigation panel (IPN) on the allegations of improper acquisition of lands and potential non-compliance with the bank’s policies. He said if the investigation was carried out, it would delay the implementation of the project.

The APCRDA intimated to the Centre that the state government was taking a comprehensive review of the entire project, including the World Bank loan issue, and sought time till July 31. But, Khare wanted that the State government to convey its final stand by July 1.

However, there was no reply from the state government to the DEA even after July 1 on whether it was accepting or rejecting the World Bank loan. On July 10, Bandana Preyashi, Director (Fund Bank) of DEA, wrote yet another letter to the AP chief secretary, requesting that the state government take an urgent decision on the World Bank loan.

She reminded that the World Bank’s board meeting to be held on July 23 was likely to approve the resolution to order an investigation into the allegations on land acquisition in Amaravati. “It is imperative that the state government takes a decision urgently on whether to continue the World Bank project or withdraw from it,” she said.

Bandana gave a final deadline of July 15 for the state to convey its stand. “If no response is received from the state by July 15, the department will presume that the state government is unwilling to take the loan from the World Bank and will communicate directly to the bank without consulting the state government,” she said.

With no response from the state government forthcoming, Bandana wrote to Junaid Ahmed, country director of the World Bank, India, on July 15, stating that the DEA was withdrawing the request for US $ 300 million loan for Amaravati project. The decision was approved by the bank the following day.

While the APCRDA authorities could not be reached for comment, state finance minister Buggana Rajendranath Reddy made it clear that Amaravati did not figure high in the priorities of the agrarian state which was struggling to build an industrial base and generate revenue.

In an interview to a Singapore daily The Strait Times on the sidelines of India Singapore Business and Innovation Summit on September 9, Reddy said his government’s priority was raising the standard of living, providing equitable development to the entire state, providing an infrastructure for creating a manufacturing base, rather than to build a single city.