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After World Bank, HUDCO to lend 11,000 crore for Amaravati capital project

Oct 27, 2024 06:44 AM IST

The meeting of HUDCO officials with Naidu was a follow-up to an earlier meeting with state municipal and urban development minister Ponguru Narayana in New Delhi on Monday

Even the World Bank has initiated the process for lending a soft loan of 15,000 crore to the Andhra Pradesh government for the reconstruction of Amaravati capital city, the project is all set to another mega investment from the Housing and Urban Development Corporation Ltd (HUDCO), a central government enterprise, people familiar with the matter said.

HUDCO chairman Sanjay Kulshreshtha meets chief minister N Chandrababu Naidu on Friday. (HT Photo)
HUDCO chairman Sanjay Kulshreshtha meets chief minister N Chandrababu Naidu on Friday. (HT Photo)

A delegation of HUDCO led by its chairman and managing director Sanjay Kulshreshtha met chief minister N Chandrababu Naidu on Friday evening to discuss the proposal to lend 11,000 crore for the construction of Amaravati capital city.

This was confirmed by Naidu in a post on X: “Met with a delegation from HUDCO led by Chairman & MD, Shri Sanjay Kulshrestha, to deliberate on the development of the capital city, Amaravati. The discussions focused on a financial support package of 11,000 Cr for Amaravati’s construction.”

He further said: “HUDCO also expressed interest in developing an International Convention Centre on 10 acres of land in the capital city.”

The meeting of HUDCO officials with Naidu was a follow-up to an earlier meeting with state municipal and urban development minister Ponguru Narayana in New Delhi on Monday. Special chief secretary Anil Singhal, HUDCO Vijayawada regional chief BSN Murthy and others were also present during the meeting.

An official statement said Narayana explained in detail the state government’s action plan to develop Amaravati and requested for a loan of 11,000 crore. “The HUDCO authorities expressed satisfaction over the proposal and agreed in principle to lend 11,000 crore to Andhra Pradesh Capital Region Development Authority (APCRDA) for Amaravati construction,” it said.

The minister explained that the estimated cost for constructing buildings, roads, drainage, and setting up drinking water facilities in the capital city is around 50,000 crore. Of the total, 26,000 crore is needed for phase one works, for which the HUDCO would extend 11,000 crore.

In the first week of October, the World Bank sent a letter to the Union finance ministry approving the loan of 15,000 crore for the Amaravati capital city project for this year.

The final round of discussions between the World Bank and the state government would be held on November 8 and the agreement is expected to be signed by November 15, an official of the municipal administration department familiar with the development said.

Once the agreement is signed, the APCRDA is expected to get the first tranche of loan of 3,750 crore in November, as per the proposals submitted by the APCRDA. The remaining tranches would be released before the closure of the financial year, he said.

The World Bank loan would be utilised for the development of infrastructure, development of layouts of residential and commercial plots allotted to farmers who gave away their lands for the capital under land pooling system, construction of Amaravati government complex, including the state assembly, high court, secretariat towers and various departmental buildings.

The official said there would be a moratorium of 15 years on repayment of the loan, which would be borne by the Centre and the state in the ratio of 90:10.

On October 19, Naidu officially relaunched works to rebuild Amaravati as the state capital. He declared Visakhapatnam as the future financial hub and announced the establishment of a high court bench and industries in Kurnool.

He reiterated that Amaravati is a self-financing project and the loans taken for its construction would be repaid from the money generated within the capital city. Stating that the state government would get the World Bank loan soon, he said he had instructed the authorities to complete all the works on time. “Amaravati is going to be the most beautiful city in the country,” he added.

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