Pall of gloom pervades Andhra's Amaravati as work grinds to a halt

40,000 workers from other states left in the lurch, real estate business takes a battering, farmers get a raw deal on the land they surrendered for Andhra Pradesh's new capital

It’s the silence that is eerie — this is a construction site where no sound of men drilling or machines digging can be heard. A hush has descended on Amaravati, the fabled new capital of Andhra Pradesh. Loitering around the unfinished structures on one project site is small time labour contractor Bapi Behera who has been collecting the pending Rs 20 lakh wages he is owed for his workers ever since they left the site three months ago. 

 Having finally collected the dues from Larsen & Toubro, Behera will take it back with him to Kolkata to hand out to his men who need it for the Durga festival. Along with Behera, only a few other souls can be seen: security guards, vegetables vendors, dhaba owners, and roadside grocery sellers who had hoped for big business from Amaravati.  

There were, at one time, some 20 project sites where residential apartment towers, villas, and  residential quarters for different categories of staff and government functionaries were meant to rise up. Roads and drainage systems were being built under the previous government. The city was going to come up on 217 square kms between Vijayawada and Guntur, on the southern banks of the Krishna River. Chief Minister  N  Chandrababu Naidu proclaimed that Amaravati, his brainchild, was going to be among the best five capitals in the world. 

The idea of a new capital city emerged after Telangana was carved out of Andhra Pradesh in 2014. The earlier capital of Hyderabad was designated as the joint capital for both states for 10 years but Andhra Pradesh had to find a new capital after that. Amaravati was chosen and work began. 

When Naidu lost power in the April elections, the new government, led by the YSR Congress Party, ordered the construction firms to stop work. It wanted to scrutinise the contracts awarded by the earlier government and investigate complaints of mismanagement.  

In July, the World Bank and the Asian Infrastructure Investment Bank pulled out from the project. Around 40,000 labourers from West Bengal, Bihar and Odisha were forced to down their tools, even though some buildings were close to completion. 

Consequently, all the buildings remain unfinished bar one — the ‘temporary’ secretariat complex, state assembly, and high court building. The latter opened in January and the other two were finished earlier. 

The mood is bitter. The sudden stoppage of work devastated those living in villages near the sites. The fear is not just about what has happened but about what might happen in future given the current uncertainty about Amaravati’s future. When some ministers raised doubts recently about the intrinsic soundness of Amaravati, they caused ripples of anxiety in villages where locals need the work and where big hopes of prosperity had been built on the city.  

In Rayapudi village, Idupulapati Sitharamaiah has lost rental income after two project engineers working for L&T vacated the first and the second floors of his house two months ago. Sitharamaiah had spent more than Rs 1 crore on his house in anticipation of some stable income from the investment.

Subbarao, a farmer who helps out at his son’s electrical shop at Velagapudi village, says business is down but he isn’t sure why. “Perhaps the lack of sand is affecting construction,” he says.

Dozens of private vehicles carrying prospective buyers of plots in Amaravati used to drive through the village roads every day. “Just before the elections, a buyer from Hyderabad asked me to identify a few plots in the commercial zone behind the high court, for whatever it cost. A day after the voting was over, the same customer told me over the phone not to pursue his earlier proposal,” said real estate broker Ali Ahmed in Rayapudi village.

There is now no selling or buying of plots and prices, said Ahmed, have fallen by 40 per cent. M Muralikrishna, also a real estate broker based in Mandadam village, said plot owners were greatly disappointed. Prices had crashed in his area to around Rs 32,000 per square yard from Rs 45,000 and in some places even lower. 

Farmers had been hoping big. In 2015, the Naidu government brought 27,000 farmers into a Land Pooling Scheme by mobilising 33,000 acres of their farm land across 29 villages for the city. The government offered them two plots — one residential and one commercial — totaling around 1,500 square yards per acre in exchange for their land.

So far, around 24,000 farmers have received the ownership certificates of 64,000 plots. “The work on the allotment of another 40,000 plots to the farmers was pending. We will complete the process and register those plots to the rightful owners in due course,” said Botsa Satyanarayana, municipal administration minister who is also in charge of the Capital Region Development Authority. 

The Naidu government promised farmers they would be given fully developed plots with roads, drainage and other civic amenities within three years but that infrastructure part of the promise had largely remained unfulfilled by the time his tenure ended. 

After giving away their land to the government, the farmers of 29 villages have ceased to be farmers in the old sense of the word but are rather owners of commercial and residential plots looking for a ‘maximum support price’ the way they used to for their agricultural crops, only this time for their new real estate commodity whose prices are driven by a combination of factors including hype and speculation. 

“We know there is no money with the government to spend on the development of Amaravati. All that we want from Chief Minister Jaganmohan Reddy is a commitment towards Amaravati. Things will get normal again,” says Subbarao.

It’s a sentiment echoed by Sitharamaiah who says that if the present situation persists, it will drive many farmers like him to take ‘extreme steps’.

Yet Chief Minister Y S Jaganmohan Reddy has shown no willingness to take responsibility for the current situation. All he has said to reassure people is that the state capital will not be moved out of Amaravati.

But if that is the case, then why stop work even on buildings intended for government use? Why not examine alleged irregularities in the contracts while letting work continue? Why stop work when the Naidu government has already spent Rs 5,600 crore on the completed and ongoing projects and another Rs 2,000 crore in pending bills to contractors? 

Satyanarayana claims that the Naidu government had stopped clearing the bills to Amaravati contractors much before the elections yet went ahead and awarded new contracts worth over Rs  30,000 crore (without any funding tie-ups to back them) last November-December, just a few months before the election schedule was announced.  

Soon after assuming office, Reddy cancelled these last contracts, leaving close to Rs 10,000 crore worth of contracts, in various stages of implementation, to be reviewed by a cabinet sub-committee. 

Every time a minister makes a critical comment about Amaravati, plot owners plunge into gloom, fearing such remarks will push prices down even further. The remarks always vary; sometimes it’s the soil conditions not being suitable for construction. At other times, it’s fear that a part of the capital will be flood-prone. 

Satyanarayana claims that his government’s approach towards Amaravati is going to be ‘realistic’ despite certain issues. “The previous government did not follow the advice of experts in deciding the location and other parameters. I can’t even find the rationale of the LPS — issuing contracts worth Rs 17,000 crore to develop infrastructure for the farmers' plots that total about 17,000 acres. What is free when you spend Rs 1 crore on infrastructure for every acre?” asked Satyanarayana. 

Meanwhile, Behera is getting ready to travel to Kolkata with his men's wages. “I would have been beaten up by my men if I had gone back empty-handed. Now I have to find work somewhere else. It's all over here,” he said.