TenderTiger

State Government | Andhra Pradesh - India | PID: 171162
Development projects worth more than Rs 40,000 crore, including one related to the new capital city, are in a limbo as the Andhra Pradesh government is caught in a fix over the utilisation of funds under the Externally-Aided Projects (EAPs)

Chief minister Chandrababu Naidu himself sounded sceptical about the “benefits” of the EAPs but it was a political decision which he now cannot shy away from

It is difficult to understand about the immediate benefit that would accrue to the state which is struggling to put its finances in order, while ensuring investments in capital works, so that growth does not suffer,” he told the Legislative Assembly in the just-concluded session

Under the Special Assistance Measure, announced by the Centre in September 2016 in lieu of Special Category Status to AP, the former was to fund the state for EAPs only “signed and disbursed” during 2015-16 to 2019-20

The AP government anticipated an amount of Rs 20,010 crore under the Special Assistance Measure (SAM) but expressed inability to spend it within the stipulated five years

As such, the state wanted the Centre to permit it to clear “other outstanding loans” towards EAPs and also use the gap to pay interest commitments to the Government of India, Nabard and other external agencies, a senior bureaucrat told PTI

The Union finance ministry rejected this proposal and also refused to concede the state’s demand to not make the SAM a part of the FRBM (Fiscal Responsibility and Budget Management) limit

It is an area of concern for us. The chief minister is pursuing the issue with the Centre since the state is not directly lending the money. As such, our contention is that it should be out of the FRBM limit,” the bureaucrat said

For over two years now, the state government has been requesting that the borrowing limit under FRBM Act be raised to 4 per cent of the GSDP, given the state’s precarious financial position post-bifurcation

The Centre, however, has not agreed to it either, even as the state has been borrowing quite heavily to make ends meet. AP targeted to borrow Rs 30,019 crore during the current financial year, excluding the EAPs

Among the 13 EAPs proposed by the state, the Amaravati Capital City Development Project is critical besides the Vizag -Chennai Industrial Corridor Development Programme

Though the Department of Economic Affairs (DEA), under the Union finance ministry, cleared the state’s proposal for a $ 500 million loan in 2016, the World Bank is yet to approve and sanction it

Of the total project cost of Rs 4,749 crore, the World Bank is expected to lend Rs 3,324 crore for the Amaravati project, under which critical infrastructure in the new capital is supposed to be developed

The chief minister wrote a letter to Union finance minister Arun Jaitley on October 24, 2016 proposing to take up construction of residential school buildings in the state at a cost of Rs 3,000 crore with funding from AIIB (Asian Infrastructure Investment Bank

A government note on the “latest status” of EAPs states that “the above proposal is in final stage (with the state government) and not yet submitted to the DEA”

The state government also proposed the AP Rural Road Project at a cost of Rs 4,234 crore with funding from the AIIB for “providing new connectivity to unconnected habitations”

The DEA sought comments of the Union Rural Development Ministry in May this year. The ministry, in turn, wrote a letter to the state government on July 31 asking it to “recast the proposal”. The state government is yet to do that

Similarly, the Rs 4,500 crore AP Rural Water Supply Project is stuck after the Screening Committee of the DEA asked the state to “recast the project financials by restricting to $ 500 million”

The Union Health Ministry sought comments from the state government last year on curtailing the AP Health System Strengthening Project cost from the proposed Rs 4,807 crore to Rs 2,900 crore but the state’s comments are (still) “awaited”

In all, seven projects worth a total Rs 18,313 crore are languishing due to “no response” from the state government, a senior official pursuing the EAPs said

Though the Amaravati Capital City Development Project, too, has been shown as approved”, among the six EAPs totalling Rs 19,162 crore, it cannot actually take off till the World Bank “sanctions” the loan, he added

| Updated on: 11 - Dec - 2017
Search Tenders By Product: Development Work Project
To view this paid Project you can either "Buy this Project" or subscribe our annual Project Alert Service and get access to all similar Projects. If you are registered member, please fill in the subscription form below . If not, please Register first.
Step 1 - Select a plan
Select Plan Unit Rate Subscription Validity
Rs. 29500 /-
Step 2 - If registered user, please fill below form
(*) Mandatory fields
Email Id *
States Interested In
Projects Interested In
Select Payment Type
Verification Code *
Note : As Goods and Services Tax is set to be implemented from 1st July 2017. The transition provisions under GST law applies to all services provided by e-Procurement Technologies Limited to its clients on or after 1st July 2017 and GST tax rate and other taxes are applicable as extra for all services provided.