AP's temporary capital; Grand Fraud


(Brig (retd) GB Reddi)

Andhra Pradesh Chief Minister, N. Chandrababu Naidu, laid the foundation stone for the temporary capital at Velagapudi in Guntur district on 17 February 2016 on what may turn out to be the biggest fraud of the new millennium.

On the intervention of Chandrababu Naidu, the State government finalized the bids for temporary capital at Rs. 3,350 per sq. ft. The government has awarded four packages to L&T and two packages to Shapoorji Pallonji and Co for a total built-up area of 6 lakh sq.ft in a 28 acre area.

The government is planning to construct G plus one building, each floor with a space of 50,000 sq.ft. However, foundation will be constructed for G plus six floors.

Another 17 acres has been earmarked for creating public facilities around the temporary secretariat.

Chandrababu Naidu has justified the temporary construction in the multipurpose areas in the master plan.  The CRDA could use it for commercial or any other best purpose later.

Initially, the bidders quoted about Rs. 4,800 per sq. feet, while AP Capital Region Development Authority (CRDA) authorities insisted that the work be done at Rs. 3,000 as estimated by it. And, it works out to Rs. 3300 including mandatory taxes. It is learnt that the government has offered tax concessions to the bidder.

Land cost is not included in fixing the final costs since the site is made available to the contractor free of cost.

Yet, Chandrababu Naidu has agreed to finalize the bid at Rs.3,350/- per sq. ft. Why should he do so, when tax concessions have been offered and land is free of cost?

Talk to any construction agency, the cost of de luxe construction with marble/granite cannot exceed Rs.1, 500/- per sq.ft.  In particular, with the site for construction given free to the construction agency.

Considering even 30 percent given to the bidder as the margin of profit, the final cost cannot exceed Rs. 1,600/- to Rs.2, 000 per sq. ft.

If so, approving the bid for Rs.3, 350/- per sq. ft. is extraordinarily high and clearly reflects the giant size of scam in making.

Furthermore, the proposal to convert them into shopping complexes at a later date when the permanent capital is constructed may be considered good; but what about the cost of modifications and alterations?

Instead of spending large sums on temporary capital construction, surely it could have been constructed in Phases as per the Master Plan at the permanent site.

Quite ironical and quixotic it  is that Chandrababu Naidu on one hand paints a grim picture of State finances on one side, yet goes on incurred and incurring wasteful expenditure not only on  his camp office and residence.  As per his own statement the “Budget Deficit will continue till 2019.”

Furthermore, Naidu has been placing astronomical demands on the Central Government knowing well that such fund allocations are not going to be given to the State.

Two years are going to be completed by May 2016 since the new state was formed after bifurcation.  Naidu and his team had gone to Singapore, Japan and other nations to attract promoters to design and construct the capital.

Crores of rupees have been spent as consultation fees and foreign visits at tax payers’ money.  It is as if there are no eminent consultants locally available.

And, the progress of permanent capital at Amravati, whose foundation stone was laid with great fanfare on 8 June 2015, appears to be only on paper.

In sum, wily Naidu is playing all his political tricks to fool people of the new state.  The details of the ‘grand fraud’ being played out would come into limelight sooner than later.