VIJAYAWADA, ANDHRA PRADESH - A Singapore consortium, comprising of Ascendas-Singbridge and Sembcorp Development, has been chosen to develop the commercial core of Andhra Pradesh's new capital city Amaravati.

The letter of award to develop the start-up area of 6.84 sq km was given to the consortium at a ceremony on Monday (May 15) witnessed by Singapore's Minister for Trade and Industry (Industry), Mr S. Iswaran, and Andhra Pradesh Chief Minister Chandrababu Naidu.

The start-up area, along the southern bank of the Krishna River, will include office buildings as well as residential buildings. It is adjacent to the government core which will house the state secretariat, legislative and judiciary buildings, and the governor's office.

The Singapore consortium will work with Andhra Pradesh's Amaravati Development Corporation to develop the financial district. The two will form a joint venture called Amaravati Development Partners, said a press statement from Singapore's Ministry of Trade and Industry.

"This is a momentous occasion... The partners will build the required infrastructure and attract developers and companies, both Indian and international, to create high quality residential, commercial and public facilities," said Mr Iswaran at the ceremony.

Mr Naidu noted that he had been keen to collaborate with Singapore right from the beginning, after Andhra Pradesh was split into two in June 2014 to create Telangana, India's newest state.

The current capital, Hyderabad, would be shared between the two states for 10 years. It would then go to Telangana as it falls within its state boundary.

"It is a very rare opportunity to build a city from scratch," said Mr Naidu at the ceremony, while asking Singapore firms to work fast on the project.

Mr Naidu has already ordered all government departments, ministers and the state assembly to move to Amaravati. The government is currently functioning out of temporary government buildings, surrounded by empty farm land and villages.

Singapore has been involved in the Amaravati project from the start.

In December 2014, International Enterprise (IE) Singapore signed a memorandum of understanding with the Infrastructure Corporation of Andhra Pradesh to jointly work on the master plan for the city.

Surbana Jurong, which was appointed as the master planners, created the plan in three phases in 2015. The masterplan includes lots of green spaces, waterways, high-rise commercial and residential buildings combined with low-rise government offices.

Now, the Singapore consortium of Ascendas-Singbridge and Sembcorp Development will take the development of the capital city project forward.

A press statement from the two companies said the start-up area "is expected to create the first centres of activity attracting settlers and investment into Amaravati City, comprising developments for business, commercial and residential uses".

The start-up area is to be developed in phases over 15 to 20 years and the Andhra Pradesh government will work with the master developers on "industry positioning and investment promotion to bring economic activity to the city", the statement added.

"Today, we are happy to be presented the opportunity to work with like-minded partners on the development of Amaravati into a future-ready smart and modern city," said Mr Miguel Ko, group chief executive officer of Ascendas-Singbridge.

Mr Neil McGregor, group president and chief executive officer of Sembcorp Industries, said: "We are very pleased to be presented the opportunity to participate in the development of a brand-new capital city for Andhra Pradesh."

On Monday, Mr Iswaran and Mr Naidu also signed a memorandum of understanding for greater collaboration between Singapore and Andhra Pradesh in economic development, by identifying commercial opportunities for Singapore companies in Amaravati and Andhra Pradesh, and for sharing expertise in areas such as urban governance, security and education. The two ministers will co-chair a Joint Implementation Steering Committee.

When fully completed, the new capital will be 10 times the size of Singapore. Some estimates have put the cost of construction for the whole new city at more than one trillion rupees (S$21.8 billion).

IE Singapore led a 20-member strong business delegation to explore business collaboration in the state.

Its assistant chief executive officer Tan Soon Kim said: "Andhra Pradesh has a conducive business environment given its industry base, natural resources and long coastline... We will work closely with our companies to develop collaboration opportunities in Andhra Pradesh in urban development, transport and logistics and manufacturing."