AP govt may issue ‘Amaravati bonds’ to fund capital’s completion amid fin woes

Capital Project

• The previous TDP regime’s ‘Amaravati Bonds 2018’ raised nearly Rs 2,000 cr
• AP plans to seek special grants from the Centre for the national status Polavaram project
• Amaravati is expected to be completed in 2 and a half years
• AP’s debt increased from Rs 4.29 lakh cr in 2023 to Rs 4.85 lakh cr by March 2024

Vijayawada: The cash-starved Andhra Pradesh Government may opt for floating 'Amaravati Bonds' as a way out to fund the completion of pending works of the greenfield capital after the TDP-led NDA took over the reins of the State. Perplexed over deplorable financial health of the State, Chief Minister N Chandrababu Naidu has already gone on record seeking suggestions from all on how to fund and complete construction of Amaravati as well as another long-pending Polavaram Multi-Purpose Irrigation and Hydropower Project. He did not rule out seeking the support of NRIs fuelling speculation that another round of bonds may be considered to raise resources. He said this at a media briefing recently after his maiden inspection of the condition of various projects and Praja Vedika, where he used to redress the grievances of the people when he was in power during 2014-19.

The vedika was ravaged to the ground by the YSRCP Government in 2019 stating it was an unauthorised construction.

TDP regime post-bifurcation, had floated 'Amaravati Bonds 2018.' The bonds, considered the largest by any local authority, were oversubscribed fetching nearly Rs 2,000 crore. The issue was rated highly preferable by CRISIL and Brickwork and Auicte. Andhra Pradesh Government has already decided to seek special grants from the Centre for Polavaram, which has been accorded national status by the Modi 1.0 as part of a promise made at the time of bifurcation.

Accusing the YSRCP Government of taking back the Polavaram project by 10 years, Water Resources Minister Nimmala Rama Naidu alleged that there was total mess during 2019-2024. After visiting the project site along with the Chief Minister, Rama Naidu said repairs of the diaphragm wall has been estimated to cost Rs 448 crore as against the requirement of Rs 990 crore to build a new one.

He said the project cost has shot up due to negligence meted out by the erstwhile government.

According to Municipal Administration Minister P Narayana, Amaravati, the dream project of the Chief Minister will be completed in two and half years. He said the government is firm in developing Amaravati as the sole capital of AP and Visakhapatnam as the financial capital. He said Amaravati will become one of the top five capitals in the world.

During pre-budget consultation at the GST Council meeting, Finance Minister Payyavula Kishav submitted a wish list to Union Finance Minister Nirmala Sitharaman, which included a grant of Rs 15,000 crore for construction of Amaravati, liberal funding for Polavaram project and special grant for completing construction of Ramayapatnam Port, Kadapa Steel Plant, petroleum corridor, South Coast Railway headquarters in Visakhapatnam as promised by Prime Minister Narendra Modi, agriculture university and other infrastructure projects like Vizag-Chennai Industrial Corridor. The amount he sought for Polavaram was for budgetary grants in the proposals to be made for 2024-25. Official sources said the debt of AP has moved up from Rs 4,28,715 crore in 2023 to Rs 4,85,490 crore as on March 31, 2024. At the time of bifurcation, it was Rs 1,18,050 crore in June, 2014, which surged to Rs 2,64,451 crore as on March 31, 2019.