In setback to Naidu’s dream Amaravati project, World Bank drops USD 300 million in funding

In a massive setback to Former Andhra Pradesh chief minister Chandrababu Naidu’s ambitious project of Amaravati, the World Bank has decided not to provide USD 300 million in funding for the Amaravati Sustainable Infrastructure and Institutional Development Project. The status of the project mentioned on the World Bank’s official website is shown as “dropped”. During his government, the former Andhra Pradesh chief minister had sought a loan from the World Bank for his dream project to develop the proposed capital city of the state after its division.

On Naidu’s request, the World Bank had committed USD 300 million in funding for the development of sustainable infrastructure in the proposed city. The total estimated cost of the Amaravati project, as mentioned on the World Bank’s website, is USD 715 million.

Although the reason behind its decision to drop the funding was not made public by the World Bank, several NGO’s for farmers and Human Rights Forum have been against Naidu’s plan to build the capital city of Andhra Pradesh as it required acquisition of farm land on a large scale. Also, they opposed the plan to build the city very close to the bank of Krishna River.

The World Bank had ordered an inspection based on a bunch of petitions by NGOs to see if the state government had honoured all the commitments. The inspection was carried out by a team of World Bank and report was submitted in January this year.

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“None of the assurances and promises by then CM Chandrababu Naidu to farmers of the region were being fulfilled. Farmers in the capital region lost land and livelihood and spent sleepless nights. It was a four-year-long struggle and finally the people have won with the WB dropping the idea of funding this project,” The Indian Express quoted Mallela Sheshagiri Rao, a lawyer who represented Capital Region Farmers Federation.

Following Naidu’s defeat in the recent Assembly elections, new Andhra Pradesh Chief Minister Jagan Mohan Reddy had recently announced that his government will soon initiate a probe into the alleged financial irregularities in the construction of new state capital Amaravati. He had also accused Naidu of misleading people about the place where the new capital would come up in order to buy himself land at lower rates.