Amaravati Gateway

By Vishnu Shankar

Reams have been written in all major news papers about the new master plan of Amaravati unveiled by the Andhra government with generous assistance from Singapore. Scores of TV reports have been viewed by all of you. Andhra Nation will not go into those details, except for reproducing a copy of the Eenadu report which gives a bird’s eye view of the whole plan at the end of this article.

We wish to tackle some basic questions here. Many people i have spoken to say that the plan indeed looks good on paper and in photos. But healthy skepticism persists. Here are the frequently asked questions and this is what Andhra Nation feels about them.

The master plan indeed looks grand but there are some reports that it will cost a few lakh crores to build it. How will the AP govt which is running a deficit from its birth, meet this humongous expenditure ?

This is the most asked question. But the answer is pretty simple. There are three components to building Amaravati.

  1. Basic infra work like land leveling, building the underground power, water, sanitary, cable and broadband network and doing the over-ground work such as building roads etc. A big part of this cost is expected to be borne by the central government and hence the burden on AP will be lesser than what most people expect.
  2. Building the state government offices which include major landmark constructions like Assembly, secretariat, CM and other ministers’ offices and quarters. Almost the whole of this expenditure will be borne by the Centre as per the provisions of the State re-organisation act.
  3. As far as the other part is concerned, which will be building private office complexes, homes, malls, colleges, schools, hospitals etc, AP government has already tied up the most important resource which is land. The most likely way forward for building this segment will go like this. 1) AP will shortlist the developer / a number of cluster developers by the Swiss challenge method. 2) It will offer a part of the land already pooled as its equity and ask the developer to do the rest. This is very similar to joint venture development in case of individual properties. where the land owner offers land, the builder builds apartments and they share the project in a pre-defined ratio.
  4. I wish to give an example here. When Cyber towers, the first building in Madhapur was constructed way back in the late nineties, AP government’s contribution was only 11% and the private developer did the rest. This 11% equity by APIIC was in form of land alone and no monetary expenses were incurred. A large part of the IT and Financial districts of what is now known as Cyberabad was built in a similar way. And the same Chandrababu Naidu was at the helm then as is the case today.amaravati street view

OK, but it may take a few decades to build a city of this scale and grandeur, even if money is not going to be an issue.

True.Don’t expect Amaravati to spring up instantly and become as it looks in the photos in 2-3 years. But that is not to say that it will take decades. Again take the example of Cyberabad. It probably took less than 10 years to come into shape. In my view, if AP govt works efficiently, it can stick to the following timeline, provided it starts construction on 22-10-2015 as expected.

  1. All basic underground work as mentioned in point 1 of Question 1 to complete by Early 2017.
  2. Basic zoning and plotting of the area to complete by the mid of 2017.
  3. All government offices as mentioned in point 2 of Question 1 to complete by Sept/ Oct 2018.
  4. All road works along with landscaping / greening to complete by Sept/ Oct 2018.
  5. A few private office and residential buildings too to come up by  Sept/ Oct 2018.
  6. Hence you will be able too see a reasonably good part of Amaravati in the next 3 years time. This is very much possible if AP can attract some competent global developers to do the works.

Fine. But why should global developers be interested in developing Andhra’s capital ??

The whole world is crying for business and an order like building a smart new city from scratch is a huge business opportunity even for the biggest companies in the world. So don’t worry about it. Be prepared to be pleasantly surprised to watch big global companies swarm around Amaravati like bees. Like ants around a piece of Jaggery.

You seem to be an incurable optimist. But what is the use ? Even if Amaravati develops well, it can never compare to the glory of Hyderabad.

Ha..ha.. don’t say that too often. You will be forced to retrace your own words very shortly. A city is never judged by its population numbers or even by what it has already achieved. It is always about how much can it grow from here. Lack of growth will sound the death knell for any city or country. Look at USA. It has already achieved a lot and is far ahead of any other country. Then why is it that it wobbles when recession strikes? Similarly in spite of everything that is already there, lack of new business opportunities will swallow Hyderabad in the years to come. And new business will give Amaravati the clear edge.

OK. Let me accept your argument. Even if all new big buildings come up in Amaravati as shown in photos, who is going to run business from there??

I personally feel AP government is going ahead with a very clear plan. It is already speaking to integrated companies from China, Japan, Singapore etc apart from many others. By saying integrated companies, I mean global companies with varied and diverse business verticals. I mean companies who have a building arm to build and can run other group company businesses from the offices they themselves build. For example Sumitomo of Japan with which AP has already had several rounds of discussion. Sumitomo’s businesses are extremely diversified. While it has construction expertise, it also has group companies in such varied industries such as Auto, finance, Insurance, Chemicals, steel,glass, electronics and electricals. So a multi level office building built by Sumitomo can house its own group companies and need not look for other corporate tenants. There are several such companies in the world. And the good part is that Naidu knows this game very well.

In short, Amaravati is an amazing thing happening right in our midst and I (as a Telugu) am extremely proud. I am sure it is going to rock big time and make a big splash. And you don’t need to wait till eternity for that to happen. It is going to be much sooner than you think. And when that happens, it is going to suck in a lot of investment which in normal times would have gone elsewhere. So Andhrites, time to be proud !! Amaravati beckons and how!!

Here is the Eenadu report on Amaravati (Click to zoom)

eenadu report on amaravati