A Singapore consortium will develop the commercial core of Amaravati, the new capital city of Andhra Pradesh, deepening the Republic's footprint in the fast-growing economy where developing urban infrastructure is a government priority.
The consortium of Ascendas-Singbridge and Sembcorp Development, which had jointly bid on the project, was announced yesterday as the master developer for a 6.84 sq km stretch called the start-up area.
It was given the letter of award in a ceremony witnessed by Singapore's Minister for Trade and Industry (Industry) S. Iswaran and Andhra Pradesh Chief Minister Chandrababu Naidu.
"This start-up area will certainly be the heart of Amaravati," said Mr Iswaran, who is in India on a three-day visit.
Get The Straits Times
newsletters in your inbox
He added: "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."
He also attended a ceremony yesterday to lay the foundation stone for the start-up site in Amaravati.
The capital city and region - spread across 8,603 sq km, or 10 times the size of Singapore - is being built in the Guntur Vijayawada region. The capital city area currently consists largely of empty farm land interspersed with villages alongside the Krishna river. It is estimated that 10 million people will be living in Amaravati by 2050.
The state is building a capital city from scratch because it lost its existing capital of Hyderabad to Telangana, a new state that was carved out of Andhra Pradesh in 2014. It was given the option of sharing Hyderabad for 10 years, but Mr Naidu has already moved government offices and the assembly from Hyderabad to Amaravati. The plan is to develop the capital city, including the start-up areas, in multiple phases over a period of 15 to 20 years.
Still, Mr Naidu, who will face elections in two years, urged the Singaporean firms to work fast.
"I requested you here to speed up work and before next elections, show some results. I have to show progress," he said.
In India, urban infrastructure is a pressing priority as more and more Indians move to cities in search of jobs and a better standard of life.
Indian Prime Minister Narendra Modi has unrolled a plan to modernise 100 existing cities, and has sought expertise from other countries, including Singapore.
While Amaravati, a greenfield project, is not on that list, it is one of the most ambitious urban infrastructure projects right now. Its challenges include securing continuing finances for a project estimated to take up to two decades to complete. Some initial estimates put the cost of the project at over one trillion rupees (S$22 billion).
The masterplan for the capital city was completed in six months' time in 2015, by Singapore's Surbana Jurong. But the Andhra Pradesh government was unable to move to the next stage of appointing a master developer as it was hit by legal troubles, ranging from firms filing cases against the bidding process to farmers resisting the land-pooling process.
While most of the legal hurdles have been resolved, some remain, including a case in the National Green Tribunal on the ecological impact of the city.
Yet, in spite of these challenges, the master developer of the project is excited by the opportunities.
Mr Neil McGregor, group president and chief executive of Sembcorp Industries, said: "It is a rare opportunity to create a city from scratch."
But he noted: "I think the challenge will be moving at a sufficient speed to develop the land and to attract the right kind of investment and businesses to the area."