Amaravati can't be capital city, Visakhapatnam can: Consulting firm

Amaravati cannot be developed as the state capital city instead port city Visakhapatnam could be the preferred choice, according to Boston Consulting Group, which the Y S Jagan Mohan Reddy government hired to suggest a BIG (balance, inclusive growth) strategy for Andhra Pradesh.

The BCG report, contents of which were shared with reporters here on Friday, only reflected what the Chief Minister had spoken in the state Assembly on December 17, suggesting that the Secretariat be located in Visakhapatnam, Legislature in Amaravati and High Court in Kurnool.

The report only gave further indications that Visakhapatnam would soon become the headquarters of Andhra Pradesh, whether or not it is immediately designated as the state capital in formal terms.

Also, the BCG repeated what the six-member committee of experts recommended in its report on December 20 about distribution of capital functions to foster regional development.

The sectoral development plans that the BCG talked about in its report could, in fact, be found in the statutory Sivaramakrishnan Committee appointed by the Centre to suggest the capital for AP post-bifurcation in 2014.

The six-member committee of experts and referred to such plans in its report last month.

The BCG essentially seemed to have focused on the costs involved in building a greenfield capital city like Amaravati but again relied on the data already released by the AP Capital Region Development Authority, stating Rs one lakh crore is required to develop the core infrastructure.

A substantial portion of this need to be funded through debt and (its) servicing cost will be around Rs 8,000 croreto Rs 10,000 crore per annum. The state government already has a debt of Rs 2.25 lakh crore on its books, the BCG noted.

Multi-billion dollar investments are required for (building) a world-class city. Global benchmarks suggest investments of 0.5-1 billion USD per 10,000 population. New cities take 30-60 years to reach scale and many greenfield cities conceived over the last 50 years have had difficulties achieving the vision, the BCG pointed out.

In an attempt to mollify agitated farmers, who are seething over the governments plan to relocate the capital, the BCG came out with a suggestion focus could be on developing Amaravati region into an education hub, food and fisheries hub and hi-tech organic agriculture hub.

Focused efforts are required on these clusters to ensure employment creation and faster development, it said.

The high-powered committee of ministers and top bureaucrats would meet here on January 6 to deliberate on the recommendations of the experts committee and the BCG.

The high-powered committee is expected to submit its report by January 20, after which the Cabinet would discuss it for an appropriate decision.