 "AP govt leans heavily on private investment to build Amaravati")
Coming up on a 45-acre site at Velagapudi near Vijayawada, a cluster of buildings with 600,000 square feet of office space is about to be ready for occupation any time soon. Chief Minister N Chandrababu Naidu had laid the foundation stone for the project only on February 17.
One might think that all of this was built using some prefab steel structures in a makeshift arrangement since the government calls it a temporary secretariat; it was the other way round.
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The project contractors, L&T and Shapoorji Pallonji, had to cast 100-foot-deep concrete pillars to lay the foundation for the six ground-plus-one-floor structures of 25-30 feet height above ground.
Obviously, the foundation can take a lot more vertical load than this, but the government has been extra cautious about the stability of the structures, as these are the riverside areas in Krishna delta.
This interim administrative complex is the first government project initiated in a corner of an area designated for the seed capital of the upcoming green-field capital city, Amaravati.
Naidu will run the government from Velagapudi complex till the grand ‘Government Administrative Core’ that houses the facilities of all the three arms of the state is built on the riverfront as envisaged in the capital city master plan.
Inside these buildings one can see large glass doors, access control systems, centralized AC, workstations among other facilities similar to a modern corporate office.
“Being shifted to Velagapudi from Hyderabad, the staff should feel that they are well taken care of here. The government would like to make them comfortable in the new place,” A Mallikarjuna, additional commissioner of the AP Capital Region Development Authority (APCRDA), who was deputed to supervise the project on a day-to-day basis, said.
Even this young 2012-batch IAS officer was not sure if this massive project could be ready in a short span of 4-5 months time (four moths time was given to the contractors). But the real time experience has changed his perception and now he believes it is possible to accomplish the tasks with the kind of speed at which things were happening there.
Perhaps believing in what the government wants to accomplish may make all the difference to Amaravati plan considering the size, scale and complexity of the whole project. The temporary secretariat complex sets an early example in demonstration of a single-minded focus and the execution capabilities of the government to make investors believe in Amaravati story, observers feel.
The construction firms have engaged more than 2,000 workers and hundreds of technical personnel to execute the project on a war-footing basis. The entire 600,000-square-foot office space of this Rs 550-crore secretariat complex project is expected to be ready by August 15, 2016.
As the government had decided to shift the secretariat from Hyderabad before the start of the new academic year, it had set the initial deadline of June 15 for the project completion but later extended it a bit. With the shifting orders already coming into force, the staff of many departments has technically reported to duty at the new place while waiting for full completion of interiors to move to Velagapudi.
The government may use this place to run the administration for the next 2-3 years. According to Government Advisor (Communications) Parakala Prabhakar, most of the structures in the proposed administrative core of Amaravati are expected to be completed by 2019. In May, the chief minister had asked Maki and Associates, Japan, who are the architects for the structures of the upcoming administrative core, to make some changes in the designs.
But the most complex part of all the exercise the government has so far undertaken for the green-field capital city was related to the procedure and the mode of development of ’Startup Area’ that will be built next to the Government Administrative Core in about 1,691 acres(6.84 square kms) in 3 phases on pure commercial lines.
On July 18, the APCRDA had issued a Swiss Challenge notification inviting counter bids from companies to a proposal submitted for the development of the Startup Area by the original project proponent (OPP)-a Singapore consortium comprising of Ascendas-Singbridge Pte Limited and SembCorp Development Limited.
The OPP will have the ultimate chance to win the bid by matching a counter offer, if it is higher, in this single-stage bidding process. The government proposes to be complete the entire process by October, 2016.
The development plan and other details of the Startup Area were frozen. The sole criterion of competition is the percentage of Gross Sales Revenues to be shared with APCRDA.
The successful bidder (the master developer) will hold 58 per cent stake in an SPV called Amaravati Development Partner (ADP). The government has incorporated a separate company- Capital City Development and Management Company (CCDMCL), which will have the remaining 42 per cent stake in ADP. Share in gross revenues is referred to the sale proceeds of the developed plots in the entire 1,691 acres of land, which would be kept at the disposal of the ADP by the APCRDA.
“The project proponent has given a commitment that they will sell the land at Rs 4 crore per acre on the lower side,” V Rama Manohara Rao, additional commissioner (Finance) of APCRDA, told Business Standard. If any concession needs to be given in land cost to a buyer, the differential amount will have to be borne by either of the two JV partners of ADP depending on who offered the discount.
The plots will be sold only to those companies that will create jobs in Amaravati since the aim of this elaborate exercise was to build a capital city that was not just world class but also a vibrant living place for people engaged in modern professions and an evolving engine of economic growth for the state, according to Rao.
In the Startup Area, the IT and ITeS sector will be the center of growth around which the demand for residential, commercial and social infrastructure was sought to be created.
As per the OPP projections, there will be a demand for 3.99 million square feet of office space from IT and ITeS companies followed by 14.26 million square feet from residential and 1.85 million square feet space from mixed use/commercial space requirement in the first phase itself.
All of this will not happen without a proper infrastructure on ground. While approving the Startup Area development proposal submitted by the OPP last month, the state government in its July 4 Orders (GO MS 170) also committed to make a budgetary provision of Rs 5,500 crore to provide external infrastructure around the Startup Area. On its part the ADP is expected to incur a total project cost of Rs 3,137.3 crore, which includes Rs 1,981.6 crore on infrastructure inside the startup area in phases.
Startup Area of Amaravati is envisioned as a home to at least 100,000 people. With around 15,000 government staff that currently works in the state secretariat and in the head offices of 50-odd line departments were being moved to Vijayawada, they were likely to add 30,000 to 40,000 to the startup area population as most of them come along with their families. So attracting another 60,000 people to live in this area will not be a big issue, say officials.