Amaravati Green Field Project not viable : Boston Consultancy Group

By Newsmeter Network  Published on  3 Jan 2020 3:28 PM GMT
Amaravati Green Field Project not viable : Boston Consultancy Group

Vijayawada: Boston Consultancy Group report on Andhra Pradesh’s three capital revealed that Amaravati Greenfield project is not viable. Submitting its final report on the capital issue in Andhra Pradesh, The Boston Consultancy Group (BCG) felt that the Amaravati Greenfield Project is not viable. BCG had arrived into this conclusion after studying 32 greenfield capitals across the globe. The AP Secretary for Planning shared the details to media on January 3.

The consultancy looked at Amaravati region plan based on potential economic returns, the investment required, the risk involved, and time horizon. Megacities can act as commercial drivers for regions. However, successful “greenfield” megacities usually have a compelling economic starting point like Shenzhen (Hong Kong) and Navi Mumbai (Mumbai). In the absence of a starting point, greenfield cities require significant investment, have a long gestation period, and require sustained efforts.

Significant investment is required for a world-class city, with global benchmarks suggesting investments of USD 500 million to 1 billion per 10,000 populations. Moreover, new cities take 30-60 years to reach scale. Many greenfield cities conceived over the last 50 years have had difficulties achieving the vision. Location of capital alone is not enough to drive economic momentum for a region.

As per Amaravati master plan, Rs 1 lakh crore is needed to build the core infrastructure of the city. A substantial portion of this will need to be funded by debt. Servicing cost will be around Rs 8,000-10,000 crore per annum. However, Andhra Pradesh government already has Rs 2.25 lakh crore debts on its book, and they have discussed opportunity costs via investments in other projects such as irrigation.

Further technical studies suggest that the area from the riverfront is highly prone to flooding/inundation and is not recommended for construction. To manage the investment requirements, while still ensuring the development of Amravati region, they have prioritised focus on education, food and fisheries and hi-tech organic agriculture hubs. Focused efforts on these clusters are to ensure employment creation and faster development.

The study suggests ways to drive balanced regional growth across AP in industry, agriculture, infrastructure and social indicators. Agricultural realisation per unit of cultivated land should be focused on the regions outside the Krishna Godavari Belt

The themes identified for Godavari delta are the promotion of petrochemicals, plastics manufacturing, food processing, development of diversification into horticulture and cash crops, developing Polavaram project, improving road connectivity and promote Konaseema as a backwaters destination

The themes identified for Krishna delta region are the promotion of food processing, hi-tech agriculture, fisheries, multi-modal logistics hub, health hub and development of Machilipatnam port. The themes identified for South Andhra are the promotion of automobile manufacturing, paper pulp, leather and furniture MSME cluster, fisheries export and diversification into a high-value catch, Godavari-Penna linkage and promoting Mypadu as a beach destination

The themes identified for West Rayalaseema are promotions of textiles, logistics and auto-parts, support organic horticulture cultivation, support water-saving measures like drip irrigation, Godavari-Penna linkage, and improving highway connectivity. The themes identified for East Rayalaseema are the promotion of electronics manufacturing, steel plants, hi-tech agriculture like processing of tomato, and an eco-adventure circuit around Gandikota and Belum caves.

The Boston Consultancy Group (BCG) has submitted its final report on the Andhra Pradesh capital issue

The Boston Consultancy Group (BCG) has submitted its final report on the Andhra Pradesh capital issue to Chief Minister YS Jagan Mohan Reddy on Friday, January 3. Meanwhile, BCG had submitted their interim report on the measures that need to be adopted on the capital and its integrated development.

BCG representatives have met with Jagan at his camp office and explained to him the salient feature of the report. Reportedly, the consultancy has underscored the need for equal distribution of water resources, administration, and development for all three regions in AP. Notably, the GN Rao committee had already submitted its report on the capital.

A high power committee headed by Finance Minister Buggana Rajendranath will have its first meeting to study both reports on January 6. The cabinet meeting on January 8 will discuss both reports.

The high power committee is expected to submit its report within three weeks, with specific recommendations. Based on that, the cabinet will meet again and discuss as to whether to go for an all-party meeting or not, said a cabinet minister.

Meanwhile, the new demand from East Godavari leaders about building Raj Bhavan at Rajahmundry was also placed before the high power committee, sources said.

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