The World Bank has apprised the Andhra Pradesh government of its readiness to finance other projects in the state in spite of its refusal to a $300 million Amaravati project, an official said.
World Bank officials communicated this to the state government after the $300 million loan proposal for Amaravati was dropped at the behest of the Centre, a top official in the Chief Minister’s Office said.
“The Washington-based Bank is now not averse to extending loan to AP government according to the latter’s priorities. The possibility of increasing the quantum of loan was also not ruled out by the Bank,” the official said.
He indicated that the government might seek World Bank assistance for funding the flagship Navaratnalu programme that was aimed at improving the living standards of citizens in tune with the Sustainable Development Goals.
World Bank officials informed the state government officials that the loan proposal was dropped mainly due to “non-compliance of its policies,” particularly those related to settlement of affected people.
Also, alleged rampant corruption and flouting of various socio-economic norms were cited as other reasons, the CMO official said.
The Independent Accountability Mechanism (teams) of the World Bank conducted an extensive study in the field after touring the capital region in September 2017.
The Bank teams found “many irregularities in the tender process which were heavily loaded in favour of contractors.”
They also detected many irregularities in land pooling, utilisation of verdant agriculture land for other purposes, agriculture workers losing livelihood, serious environmental violations, the plan of the new proposed capital affecting the course of Krishna River and other issues.
The World Bank, based on field-level investigations, sought an explanation from the Capital Region Development Authority over these issues but the explanation was “unsatisfactory.”
The World Bank team submitted its final report on March 29, 2019.
In its report, the team reportedly noted that the then Chandrababu Naidu-led government awarded contracts worth Rs 1,872 crore for laying roads even before the loan was sanctioned.
Contracts worth Rs 947 crore were awarded for other “minor works,” even as the World Bank objected that the works were allotted in violation of the retroactive financing policy.
Against this backdrop, the $300 million loan proposal was dropped, the World Bank informed the state government.