After principal secretary (CRDA) Ajay Jain recently approved the draft general power of attorney (GPA) to be given to the ADDPL, CRDA is preparing ground to seal the deal to enable Singapore Consortium launch developmental works in the area, which are expected to kick-start economic activities in Amaravati. The start-up area is a 6.84 sq.km area (1,691 acres) and adjacent to the Amaravati Government Complex.
“We had presented the issue at the 17th Executive Authority meeting chaired by Chief Minister Chandrababu Naidu and were given a green signal. Signing of the agreement is most likely to take place on June 7,” said CRDA special commissioner V Rama Manohara Rao. The Consortium has already formed a special purpose vehicle, called Amaravati Development Partners Pvt Ltd (ADPPL), with Amaravati Development Corporation Ltd (ADCL) for the same.
It maybe noted that Singapore Consortium–which consists of Ascendas, Singbridge Pte. Ltd. and Sembcorp Development Ltd.–was picked up as the Original Project Proponent (OPP) through international competitive bidding under Swiss Challenge method. While the OPP holds 52 per cent share in ADPPL, ADCL has 48 per cent. With the OPP holding major stake, there were concerns that giving
GPA would mean giving away the land rights to Singapore Consortium. However, the CRDA clarified that giving the GPA would only give Singapore firms the right to develop the area, mortgage the lands to raise loans for development and enter into an agreement to sell the developed area.
“For development, the consortium will raise funds by mortgaging the lands. Post development, it will market the developed area. Singapore Consortium has presence in 19 firms, which will help in marketing our project. So the GPA will help the Consortium till it enters into a sale agreement. The final say, whether to go ahead with the sale or not, lies with the CRDA,” Rama Manohara Rao explained.
Regarding the clause which states that London would be the place for arbitration in case of any dispute in the execution of the project, the special commissioner clarified: “It is an international practice followed by various firms as a risk mitigation mechanism. It is to ensure a fair and transparent process of solving the disputes, if there were to be any.