High Court Stays Swiss Challenge Model Adopted By AP Govt

Hyderabad: The Hyderabad High Court on Monday stayed the Swiss Challenge model adopted by Andhra Pradesh government for the construction of new capital city ‘Amaravati.’ High Court has admitted a petition filed by Aditya Constructions and Chennai-based NVN Engineers Private Limited and adjourned the hearing to October 31, while directing the AP government to file its counter.

Attorney General Mukul Rohatgi on behalf of the AP government told the court that Swiss Challenge model has been adopted to build a world-class capital city for AP.
YSRCP has been raising its voice against wishful acts of Chandrababu Naidu, who didn’t allow Indian companies to participate in the bidding. Moreover, he passed adverse comments saying Indians can build only slums not capital cities. This drawn flak from opposition parties and all sections of the socieity as well.

Without bothering about concerns from opposition parties, AP Cabinet in June 2016 approved the controversial Swiss Challenge model for awarding the capital city development project to Singapore consortium of Ascendas-Singbridge and Sembcorp Development Limited, which in 2015 submitted a proposal under Swiss Challenge model.

AP government has floated a special purpose vehicle (SPV) called Amaravati Development Company (ADC). Singapore consortium and the ADC will together develop the Amaravati capital city. The Singapore consortium has 58 percent stake in Amaravati Development project and rest of 42 percent is held by the AP government.

YSRCP has been fighting against Swiss Challenge model as it would sabotage interests of the State.

Buggana Rajendranath Reddy, YSRCP MLA from Dhone, recently highlighted the lapses in Swiss Challenge saying Singapore government holds 74.5 per cent equity in the consortium. AP government has floated a special purpose vehicle (SPV) called Amaravati Development Company (ADC). Singapore consortium and the ADC will together develop the Amaravati capital city.

Reddy further said: “Naidu has offered 58 percent stake in Amaravati Development project to the Singapore consortium and rest of 42 percent will be held by the AP government.

The projects cost is Rs3,000 crore. Singapore consortium will contribute Rs300 crore and AP government would invest Rs200, while Rs500 crore would be mobilized via debt route. Later, Rs2,000 crore will be raised by booking profit from selling plots after the development. Amaravati capital city project’s board will have six directors in total four directors from Singapore consortium and two from AP government. AP government already lost control as it has below 50 percent stake.

Now, with two directors and entrusting all types of rights over the development project, what will the AP government do? In addition to this, AP government is giving irrevocable power of attorney to Singapore consortium. Which means after awarding nothing can be retracted.”