Andhra Pradesh proposes Special Purpose Vehicle for capital

Published Nov 25, 2014, 7:42 am IST
Updated Mar 30, 2019, 11:50 am IST
Singapore doubtful of returns; wants Rs 1,200 cr for master plan

Hyderabad: The Andhra Pradesh government has proposed to set up a Special Purpose Vehicle to take up construction of the new capital city near Vijayawada in Guntur district.

AP has proposed to invest 51 per cent and has asked the Singapore government to invest 49 per cent in the SPV in a 51:49 ratio.


The Singapore government, however, has expressed some doubts and has questioned the AP government’s guarantee of returns for its investments.

During his recent visit to Singapore, AP Chief Minister, N. Chandrababu Naidu had asked the Singapore government to help in the construction of the capital city.

After Mr Naidu’s return, state government officials had discussed with Singapore officials  how to proceed with the government to government system in a 51:49 ratio.

Sources say that the Singapore government has expressed many doubts, particularly about returns for its investment. It does not have a problem with investing as long as the returns are assured.


The AP government had envisaged that all construction works would be taken up by the SPV, but the Singapore government has said that some works can be allotted through the SPV to other companies.

Officials said that the Singapore government has stated that it can develop the land and sell it to other companies and also construct some buildings to sell to companies.

The Singapore government has also apparently suggested to the AP government not to allot land to the owners at the same place.

After pooling 30,000 acres, 15,000 acres will be shared between  land owners and the government. If the land is shared equally, the government will get 7,500 acres of land.


State government officials now say that they are not sure about the Singapore government investing in the SPV.

They say that the Singapore government is calculating everything from a business angle and is only looking at the profit aspect.

Singapore government officials are likely to visit Hyderabad in January when they will discuss the details of setting up the SPV with AP government officials.

Location: Andhra Pradesh