The Andhra Pradesh government is seeking Foreign Direct Investment (FDI) to protect the new capital city, Amaravati, from floods. Admitting that around 13,500 acres of the capital area and about 10,600 acres within the planning area of the city would be submerged from the flood waters of Kondaveeti Vagu during the monsoon season, the AP government has sought Rs 2,173 crore.

In a recent document titled ‘Investment oppor-tunities for UK investors in Amaravati-The 21st Century Capital’, the AP government has said that 100 per cent FDI is allowed in urban flood management works which is an investment opportunity through the automatic route. The government wants to construct three detention ponds with each having storage capacity of one TMC. According to the government, “Storm water run-off is estimated at about 324 TMC. Eighty per cent of the surface run-off in the capital city is not used, but merely discharged to the sea via the Krishna River. As the catchment area is developed, the surface run-off volumes and speeds are expected to increase significantly, causing more flooding and the water will be wasted. The detention ponds proposed under this project could provide temporary storage for storm water run-off, and help prevent flooding, while also providing a new source of raw water.” The project is estimated to be completed by 2020.,including the main drain of Kondaveeti Vagu, detention ponds and regulator.

For FDI in urban flood project the prior approval of the Government of India is not required. Flood management projects are usually implemented through the Engineering, Procurement and Construction (EPC) route. The Government of India has accorded infrastructure status to such projects. This opens up access to incentives such as a higher limit on external commercial borrowing, lower lending rates, tax holidays, lower import duties and financial assistance from specialised institutions. The project will be implemented by CRDA and is expected to gener-ate 2,862 jobs.