Even as the Capital Region Development Authority (CRDA) put up the proposal of the Singaporean consortium in public domain on Monday, two firms of the consortium -Ascendas-Singbridge Pte Limited and Sembcorp Development Ltd -have sought 15 years for completing the first phase of greenfield capital city of Amaravati.
According to the proposal submitted by the Singapore firms, the seed capital city would be developed in an extent of 1,691 acres. The proposal drafted by the Singapore firms has already been approved by the state cabinet under Swiss Challenge mode. CRDA invited competing counter proposals from eligible prospective bidders for selection of a master developer for the capital city.
In their proposal, the Singapore firms said they would need at least Rs.3,200 crore for development of the seed capital in three phases. Highly-placed sources said the firms proposed to complete the first phase of the seed capital in five years from the time the master developer is selected. In case CRDA completes the process of master developer selection by the end of 2016, works are expected to begin in 2017 and completed by 2022. “Thus, all three phases would not be completed before 2032,“ a senior official pointed out. Work on the second phase would be launched only after completion of about 70 per cent of the project's first leg. The first phase would be taken up in 656 acres. The second in 514 acres and the remaining in 521 acres in the third phase.
“After raising some iconic structures, the Singapore firms will first market them globally and go for brand building. Then, they will seek funds from international agencies. It's all about creating hype around Amaravati and getting funds,“ an official said. The master developer would develop iconic towers in 50 acres. Interestingly , the Singapore firms would develop 8 lakh sft of area either on their own or through the builders selected by CRDA picked up as master developer. CRDA set September 1 as deadline for the firms to file bids.
Both the master developer and Capital City Development Management Company (CCDMC) would jointly invest Rs.530 crore as corpus fund. While the Singapore firms will have a share of 52 per cent in the new company , the state government will be a junior partner with 48 per cent stake. The consortium proposed to utilize the profits from the sale of assets developed in the first phase for the construction of second phase and subsequently profits from second phase to third phase construction. In this process, the Singapore firms are planning to garner nearly Rs.760 crore. Sale of other assets and valuables in the seed capital city is expected to generate close to Rs.1,400 crore funds. As per the Swiss Challenge guidelines, if any eligible bidder submits a counter proposal with more attractive terms and lesser investment, CRDA will route the proposal to the original proposer of the plan, the Singapore consortium.
In case, the Singapore firms agree to take up the project at the rates proposed in the counter bid, CRDA would select them as the master developer. “In case the Singapore firms refuse to take up the works, then the chance will go to the competitive bidder,“ a CRDA official explained. The state government is planning to develop the capital city in 217 square km spread over 33,000 acres in 29 villages. The seed capital city is coming up in the riverfront area in 1,691 acres. The government had also decided to allow the master developer to secure loans from financial institutions by pledging the land allotted for development of the commercial assets.
Curiously , the Singapore firms would not develop government complexes coming up on the riverfront. They would confine themselves to creation of commercial assets to add realty value to the capital city area.