The proposed capital city project of Amaravati, the new capital of State of Andhra Pradesh covers an area of 217.23 sq. km with the seed capital in an area of 16.94 sq. km while the entire capital region pans over a spread of 8352.69 sq. km across both Krishna and Guntur districts of the State of Andhra Pradesh. The city specifically is planned to be built in Guntur district on the banks of the Krishna River, which is hailed as the rice-bowl of the State with 120 multi-crops irrigated on the floodplains. The area sited for the city presently has a population of 1.03 lakh while that of the entire capital region would be 5.8 million.
Global Financiers: The project is under consideration to be financed by both World Bank and AIIB. The total project cost is envisioned to be $715 million, of which the total Bank support is $300 million through IBRD investment project financing. The preparatory work for the project is being financed through a Bank-executed trust fund’ TFOA2879 – Support to Andhra Pradesh Sustainable Capital City Development’ with a grant amount of $0.17million. There’s a 12.2% disbursement from this trust fund as of the receipt of the Request. The Government of Andhra Pradesh (GoAP) as the Borrower is providing US$ 215 million, and the Asian Infrastructure Investment Bank (AIIB) is considering financing US$200 million.
Problems posed: This project has garnered much attention in the country owing to the massive land acquisition and ‘voluntary land pooling’ scheme [LPS]. The farmers allege harm to their livelihoods, environment, and food security, along with lack of consultation and participation of affected people. Complaints and requests for inspection were sent to the Inspection Panel (accountability mechanism of World Bank) during December 2016 and May 2017, and registration of the complaint was notified to the public (IPN-Request No. RQ 17/04). Further investigation is demanded by the people and complainants into Bank’s non-compliance with its operating policies [OP/BP 4.01 – Environmental Assessment, OP/BP 4.04 – Natural Habitats, OP/BP 4.11 – Physical Cultural Resources, OP/BP 4.12 – Involuntary Resettlement, OP/BP 4.36 – Forests].