The Singapore consortium, which has taken up the construction of many buildings and mini-cities of the Andhra capital, is hesitant to go ahead in view of the TDP government’s strained relations with the BJP-led Central government.

Amaravati, an ambitious mega city capital of the newly carved out Andhra Pradesh under Telugu Desam Party (TDP) Chief Minister N. Chandrababu Naidu, is slowly turning into a financial burden, thanks to the absence of any additional allocation of funds from the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government at the Centre. This project is becoming an albatross around Naidu’s neck ahead of next year’s general elections.

Naidu’s latest decision to raise funds from the market by issuing different types of bonds at interest rates as high as 10.32% has resulted in a fresh round of controversy, as the Opposition YSR Congress and BJP have objected to it, saying that the debt burden would be huge and unmanageable in the coming years. The Centre, which has so far given Rs 2,500 crore, has sought more clarifications on the capital city.


The woes of construction of the capital city, that have been latent all these four years, came into the open once the TDP pulled out of the ruling NDA government in March this year, in protest against the alleged discrimination of the Centre against Andhra. The Centre stopping its patronage has prompted Naidu to scout for other sources of funding to sustain the construction of the capital.

As on 23 August 2018, the Andhra government’s statutory body, the Capital Region Development Authority (CRDA), has cleared as many as 32 projects worth Rs 26,000 crore. These are part of a total of over 56 projects worth of Rs 48,115 crore, in the first phase of the capital city construction, which was supposed to be over by 2022 as per the original proposals.

However, this is unlikely to be completed in the next five years as both funds crunch and political uncertainty have clouded the atmosphere since this March. The Singapore consortium, which has taken up construction of many of the iconic buildings and mini-cities of the capital, is hesitant to go ahead in view of the TDP’s strained relations with the BJP government at the Centre.

Paucity of funds from the Centre is another reason for a possible delay in execution of many works that are underway. The Chief Minister, who wanted to showcase the capital city—along with the Polavaram irrigation project across river Godavari—to the people before the next elections, is in a dilemma on pushing these two at any cost. If Polavaram is 53% complete by now, Amaravati’s work progress is less than 20%.