Vijayawada it is, right in the heart of Andhra

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Andhra Pradesh chief minister N Chandrababu Naidu on Thursday announced that the new capital of the state would be located around Vijayawada, chosen because of its central location. He made a statement in the state Assembly to this effect.

"The cabinet met on September 1 and resolved to locate the capital city in a central place of the state, around Vijayawada, and go for decentralised development of the state with three mega cities and 14 smart cities. It is proposed to go for land pooling system to be worked out by a cabinet sub-committee," he said.

He said Vijayawada region was a popular choice and the same reflected in the views given to the Sivaramakrishnan Committee appointed by the Centre to suggest alternatives for the capital of Andhra Pradesh.

The Andhra Pradesh Assembly also adopted a resolution requesting the government to implement the provisions of the AP Reorganisation Act, 2014.

The Act relates to the progress and economic development of the state.

“The Andhra Pradesh Legislative Assembly records its disapproval of the process adopted for bifurcation of Andhra Pradesh without adequate consultation with and concurrence of the major stakeholders and without proper consideration for several adverse consequences. The Assembly affirms its abiding commitment to the well-being of the people of Andhra Pradesh through accelerated and balanced development of the state. The Assembly resolves to request the Government of India to take all measures required to create a level-playing field for the state by compensating for the disequilibrium created by bifurcation,” the resolution said.

The Assembly requested the Centre to provide resources for establishment of the capital city and take steps for completion of the Polavaram multi-purpose irrigation project within four years.

The Sivaramakrishnan committee, which submitted its report last week, did not indicate any particular place as the prospective capital. However, the committee was of the view that locating several governmental offices within the Vijayawada-Guntur-Tenali- Mangalagiri (VGTM) urban area was undesirable for decentralised development.

Building the capital in VGTM was likely to put a strain on infrastructure and possibly lead to unplanned expansion of urban areas. It pointed out that fertile agricultural land would be used for infrastructure development if the capital came up in this region, it said.

Even as the announcement of the capital was only a formality, land prices around Vijayawada-Mangalagiri have zoomed to new levels. According to real estate players, land around 30 km of Vijayawada is commanding about Rs 1.2-1.5 crore an acre. Earlier the same was around Rs 30-40 lakh, they said.

“The rates being quoted for the land are unrealistic for projects to take off on a large scale. The new projects will be unviable if they are sold at the current level of prices for the real estate properties,” said C Shekar Reddy, national president of industry body Credai.

According to locals, in areas past Nuzived, which is known for the mango varieties, the land rates are being quoted at Rs 80 lakh an acre, which some months ago was about Rs 8 lakh. At the Gannavaram area, which has the airport, the prices have zoomed to Rs 4 crore from the earlier Rs 50 lakh. The prices of land in the bordering areas of Telangana and Andhra Pradesh too have shot up. There are also cases of farmers selling an acre near Gannavaram and buying about 20 acres in other places.

According to L V S Rajashekar, managing director of Air Costa, the capital announcement is expected to bring some incentives to the aviation sector. “There will be growth in the infrastructure segment. We expect some incentives, particularly for aviation turbine fuel,” he said.

Currently, VAT is 16 per cent in Hyderabad, Vijayawada and Visakhapatnam. “There are moves to bring this to zero per cent in some northern states of Andhra Pradesh and we expect Andhra Pradesh also to kick in some reforms in this direction,” he said.

It now connects to Hyderabad and Visakhapatnam, Bangalore and other locations. “We cannot land in Kadapa and Rajhamundry airports as the runways are small. They are about 4,000 metres and they have to be at least 7,000 metres for our aircraft to land. We hope these will be upgraded,” he said. It now has four aircraft and will add one in December and more in April next year.

Y Harish Chandra Prasad, chairman of Malaxmi group, which has interests in power, agribusiness and property segments, said the group would consider setting up a business that could generate blue collar jobs.

“Vijayawada is an ideal location for the capital. We will be part of the growth story of Andhra Pradesh. However, it is too early to talk about the domain we are interested in or the investments figures,” said Prasad, who was earlier the managing director of Lanco Kondapalli in Vijayawada.

He says what is needed is a distributed model of growth. Development should not be centred on the capital, as was the case with Hyderabad. “The existing infrastructure can be used for administrative purposes. New industries should be set up based on the inherent strengths of the respective districts,” he said.

JA Choudary, now part of Hyderabad Angel Network and formerly with the Nvidia, said: “The IT industry will not move to Vijayawada immediately. Earlier, it was Hyderabad and now it will be Visakhapatnam. And this should be the case. All industries should not be concentrated around Vijayawada. There will be impetus for e-governance. With Vijayawada planned to be developed as a smart city, there will be some support from the government,” he said.

DV Manohar, chairman of Shree Shakti Group, said the group has plans for a solar farm in Rayalaseema region and a tourism project near the capital. “We have already executed a solar farm project in Rajasthan and look to have one in Andhra Pradesh, particularly in Rayalaseema. We will take up one tourism project, which could include a hospitality project as well, around the capital city. These two will be significant project and not small ones,” he said.

The move has been on expected lines, said Gautam Reddy, executive director of Ramky Infra. If the idea really is to decentralise development, it will work better, he said.

"Any capital that has requisite infrastructure can be a good host to any industry. The basic infrastructure includes, power, water, land and to top it, economic and policy that could encourage development. That way, the pharmaceuticals industry is quite mobile and am not sure if Vijayawada can be compared with other choices," said Mahima Datla, managing director of Bilogical E.

Earlier, industry body CII had prepared a blueprint for developing an industrial corridor in Krishna, West Godavari, Prakasam, and Guntur (KGPG) districts in Andhra Pradesh for food processing, marine processing, granite and mineral processing.

It said the implementation of petrochemical and petro investment region (PCPIR), which was announced at Visakhapatnam, should be speeded up.

“Vijayawada can be developed as a multi-modal logistic hub due to its location. This is kind of mid-point for the Chennai-Kolkata highway,” said Vanitha Datla, chief executive officer and executive director of Elico, and vice-chairperson of CII Andhra Pradesh. “There is a lot of scope for development of agri-based industries around Vijayawada. Of course, on the land rates, there are a lot of speculators but that part would be taken care by the government. Though there are concerns about fertile land being used for capital building, it will be small when compared to the total land under cultivation,” she said.


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