HYDERABAD : The Andhra Pradesh (AP) government on Tuesday said its forthcoming Amaravati capital city will not have an exclusive area for startups as planned, after a Singapore consortium that partnered the government for the project pulled out of it.

This is the second major development with regard to Amaravati this year, after the World Bank and the Asian Infrastructure Investment Bank withdrew funding in July.

A statement from the state’s minister for municipal administration, Botsa Satyanarayana, said the Singapore consortium ended the Amaravati Capital City Startup Area project after the state could not get a convincing reply on its “genuine concerns". He added the project was called off with mutual consent. “There was no progress in the required measure and set parameters in the capital area region," he said in the note.

A statement from Singapore’s ministry of trade and industry on Tuesday said: “Companies recognise such risks when venturing into any overseas market and factor them into investment decisions. In this instance, the Singapore Consortium companies said the project has cost them a few million dollars, and that its closure does not impact their investment plans in India."

The startup area project was to be undertaken by the Singapore Amaravati Investment Holdings (SAIH), which had last year formalized its collaboration with the AP government to jointly master-develop the startup area with the Amaravati Development Corp. (ADC), a state government agency.

SAIH, a joint venture company that is wholly-owned by Ascendas-Singbridge Andhra Investment Holdings and Sembcorp Development India, and ADC were to develop the startup area, which lies within a 20sq. km core area of Amaravati, along the Krishna riverfront. It was largely former AP chief minister and Telugu Desam Party supremo N. Chandrababu Naidu’s brainchild.

The previous TDP government had envisaged to develop the startup area in phases over 15-20 years. The project was expected to be the first centre of activity in the capital city area. “Our concerns were expressed when the state government asked the Singapore Consortium (comprising Ascendas SingbridgePte Ltd and Sembcorp Development Ltd) about the benefits the state would get out of the project and why the delay in the project," said Satyanarayana in his statement.

Prior to the project’s formalisation in 2018, Ascendas-Singbridge Pvt. Ltd and Sembcorp Development Ltd were awarded a contract to act as the master developer for a startup area, spanning 1,691 acres.

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