'Amaravati will be a game changer for Andhra Pradesh.'
Giving a fresh lease of life to Andhra Pradesh's dream capital project of Amaravati, Prime Minister Narendra Modi on Friday laid the foundation stone and inaugurated multiple development projects worth over Rs 58,000 crore (Rs 580 billion) for the state.
Earlier in the day, Chief Minister N Chandrababu Naidu announced the country's first Quantum Valley, being built in Amaravati, would be inaugurated on January 1, 2026.
'I see Amaravati as a fulfilled dream. Amaravati is a land where tradition and development walk hand in hand,' the PM said, launching the new projects.
Of the Rs 58,000 crore, around Rs 49,000 crore (Rs 490 billion) is earmarked for 74 major infrastructure projects in Amaravati. This includes construction of the AP legislative assembly, secretariat, high court, and residences for judicial officers.
'Today we have laid the foundation stone and inaugurated works worth Rs 60,000 crore. These are not just concrete structures -- they are a strong foundation for the aspirations of Andhra Pradesh and the vision of a developed India.
'The name of Indra's capital was Amaravati -- Now, Amaravati is the capital of our Andhra Pradesh. This is no coincidence; I declare it a sign of good fortune and a beginning for the construction of Swarnandhra (Golden Andhra),' Modi said.
As Gujarat CM, Modi said he used to closely monitor Naidu's work in developing the IT sector in Hyderabad. 'I studied it through officials and understood the process, and today, I'm able to implement those learnings across the entire country.'
'In this nation, when it comes to executing large-scale projects, completing them quickly, and ensuring top-notch quality, there is no one better than Naidu.'
Modi had laid the foundation stone of the project way back in 2015. However, it got stuck during the Yuvajana Sramika Rythu Congress Party government.
A senior government source told Business Standard that around Rs 37,702 crore (Rs 377.02 billion) of the contracts for Amaravati's development, out of the total estimated cost of around Rs 64,910 crore (Rs 649.10 billion) in 2024, have already been awarded.
The Union government has committed Rs 15,000 crore (Rs 150 billion) in assistance to Amaravati so far in 2024 and has facilitated support from the World Bank and the Asian Development Bank with support of $800 million each.
Around 25 per cent of the Rs 13,700 crore (Rs 137 billion) is scheduled for advance disbursement. Hudco has signed a deal to provide a Rs 11,000 crore (Rs 110 billion) loan, and discussions are in the pipeline with Germany's KfW Development Bank for another Rs 5,000 crore (Rs 50 billion).
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Amaravati, nestled along the southern banks of the Krishna river in Andhra Pradesh, is in a festive mood.
Across the 20-kilometre stretch from Vijayawada to the state's futuristic capital, everything -- from the lush green trees and harvest-ready fields to the buildings -- points to one thing: The arrival of Amaravati 2.0.
It is a kind of rebirth for the 2,300-year-old city, once the cradle of divine Buddhist culture and a seat of dynasties like the Ikshvakus, Pallavas, and Cholas.
The city was dubbed a 'ghost town' during the Yuvajana Sramika Rythu Congress Party government's tenure.
Locals and industry stakeholders had given up on the project after the previous Y S Jagan Mohan Reddy government floated the three-capital theory.
Jagan's idea was to have Visakhapatnam as the executive capital, and Amaravati and Kurnool as the legislative and judicial capitals, respectively.
Roads and unfinished tall buildings, once overrun with wild shrubs and weeds until the assembly elections in June 2024, have since been cleared.
Bumpy roads have been reconstructed, and bylanes that looked deserted and haunting just 10 months ago are now vibrant once again.
A senior government source told Business Standard that a lion's share of the contracts for Amaravati's development, estimated to cost around Rs 64,910 crore in 2024, has already been awarded.
"Various works related to trunk infrastructure, flood mitigation, neighbourhood development, government offices, and housing, amounting to Rs 37,702 crore, have been awarded and are in the mobilisation stage," the source said.
On the other hand, there is a sense of joy among locals, whose dreams are back on track.
"The entire 50,000 acres had become a jungle over the past four years. We are eagerly waiting to welcome the PM. Amaravati will be a game changer for Andhra Pradesh," said Puvvada Sudhakara Rao of the Amaravati Parirakshana Samithi Joint Action Committee.
A key indicator of this revival is the real estate sector, which is seeing a V-shaped recovery in prices.
After falling to Rs 8,000 to Rs 20,000 per square yard during the YSRCP regime, prices have more than doubled, now ranging between Rs 35,000 and Rs 65,000 per square yard, depending on the location, Rao said.
According to government sources, funding is already in place, and further sources are being explored.
"Amaravati is set to become the index of Andhra Pradesh's growth. The industry will develop rapidly once infrastructure is in place," said Raja Sekhar Bahudodda, general secretary of the Andhra Pradesh Chambers of Commerce and Industry Federation.
"The government has announced several policy measures to ease norms for industry and ensure the availability of incentives. This will become the next major destination for global majors in information technology and artificial intelligence," Bahudodda added.
"Startups are also gaining prominence, indicating Amaravati may become a future startup hub," he said.
Last month, a delegation from the Singapore government visited Amaravati and assured support to revive its partnership, which got derailed during the YSRCP government's tenure.
Between 2014 and 2019, Singapore had played a key role in the development of the Amaravati greenfield capital.
Already, around 130 government and public-sector offices have been allotted land in Amaravati to begin operations.
In addition, public-private partnership (PPP) projects are being invited and scrutinised on a case-by-case basis for potential memoranda of understanding.
The government has stated that the Amaravati project is expected to be completed within three years.
"A lot of time was lost for Amaravati due to political reasons. Chandrababu Naidu is known for attracting investors, and many investments are already taking place in and around the capital city," said Rama Krishna Sangem, a veteran journalist and political analyst.
"When he was chief minister of undivided Andhra Pradesh, he brought in major players like Microsoft and other global corporations. The same model is now being replicated in Amaravati," Sangem added.
"Naidu will not waste time now."
Feature Presentation: Ashish Narsale/Rediff.com
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