Amaravati Row: YSRCP Fires Questions at CBN

YSR Congress Party State Coordinator Sajjala Ramakrishna Reddy sharply criticised Chief Minister Chandrababu Naidu’s claims on Amaravati, alleging that the projections around the capital city project are misleading and financially untenable. Taking strong exception to the assertion that Amaravati is a “self-financed project” backed by a 5,000-acre land bank valued at over ₹50,000 crore, Sajjala said the figures do not stand up to scrutiny and warned against what he described as an attempt to mislead the public.

He pointed out that, by the Chief Minister’s own argument, the primary source of revenue for the project is the proposed land bank. While Chandrababu Naidu has pegged land value at ₹10 crore per acre, Sajjala cited the Chief Minister’s own registered land purchases at ₹7,500 per square yard—translating to about ₹3.63 crore per acre. He further noted that official Sub-Registrar Office (SRO) records indicate even lower values of around ₹6,000 per square yard, or approximately ₹2.91 crore per acre.

Sajjala argued that even if one were to go by the higher purchase rate of ₹7,500 per square yard, monetising the entire 5,000 acres would yield only about ₹18,000 crore, far short of the claimed ₹50,000 crore. He emphasised that the government has already incurred expenditure of a similar magnitude, without accounting for interest liabilities.

He also highlighted that contracts awarded so far in Amaravati have already crossed ₹50,000 crore. The cost of providing basic infrastructure—including roads, water supply, sewerage and electricity—is estimated at around ₹2 crore per acre. With the project area expanding to nearly one lakh acres, the total projected expenditure could rise to ₹2 lakh crore.

According to Sajjala, all spending so far has been financed through borrowings, and future investments would also rely on debt, placing a significant burden on the state’s finances. He estimated that annual interest payments alone on ₹2 lakh crore could range between ₹15,000 crore and ₹20,000 crore.

He further observed that even if land values appreciate to ₹20 crore per acre after full development, it could take 15 to 20 years to materialise. By then, the cumulative interest burden could swell to between ₹3 lakh crore and ₹4 lakh crore, potentially forcing the government to borrow further just to service the interest, leading to a compounding debt cycle.

Sajjala remarked that while such a model may contribute to asset creation for a few, the financial strain would ultimately be borne by the entire state. He said these realities are well known but are being overlooked, and urged the public to reflect on whether such a capital model is sustainable, while advocating for an alternative approach like YS Jagan Mohan Reddy’s MAVIGUN model, which he said could be implemented in phases at significantly lower cost.

Sajjala's Questions to Chandrababu Naidu

• Sajjala questioned that if Chandrababu Naidu’s calculations are correct, clear answers must be given to key financial inconsistencies.
• He said the project’s only projected revenue source is the 5,000-acre land bank, with the government claiming a value of ₹10 crore per acre.
• However, he pointed out that Chandrababu’s own land purchase records show a rate of ₹7,500 per square yard, translating to about ₹3.63 crore per acre.
• He added that official Sub-Registrar Office (SRO) records indicate even lower rates of around ₹6,000 per square yard, or roughly ₹2.91 crore per acre.
• Even if the higher ₹7,500 rate is considered, selling the entire 5,000 acres would fetch only about ₹18,000 crore, not ₹50,000 crore as claimed.
• He stressed that not a rupee beyond this is realistically achievable, while the government has already spent similar amounts, excluding interest.
• Sajjala noted that contracts awarded in Amaravati have already crossed ₹50,000 crore.
• He said basic infrastructure costs—roads, water, sewerage, and electricity—are estimated at ₹2 crore per acre, taking the total projected cost to around ₹2 lakh crore for nearly one lakh acres.
• He pointed out that all spending so far has been through borrowings, and future investments will also rely on debt.
• According to him, interest on ₹2 lakh crore would amount to ₹15,000–₹20,000 crore annually.
• He added that even if land values rise to ₹20 crore per acre after development, it could take 15–20 years to materialise.
• By then, the cumulative interest burden alone could reach ₹3–4 lakh crore, forcing further borrowing even to service interest, leading to a compounding debt cycle.
• He questioned how sustainable such a model is, as the burden would ultimately fall on the state and its people.
• Sajjala remarked that these financial realities are already known but are being ignored.
• He said the decision now lies with the people—whether to support a model that could push the state into a long-term debt trap under Amaravati, or opt for an alternative like Jagan’s MAVIGUN model, which can be developed in phases at a fraction of the cost.