Land reserve price to shoot up in Amaravati

HYDERABAD: The UK Export Finance Group has estimated the reserve price of land per acre in the upcoming AP capital city, Amaravati, at 4.3 crore in 2019. In a report titled ‘Amaravati 21st century capital – investment strategy’, the British government agency estimated that the basic reserve price of land will increase from 2 crore to 4 crore in the next three years.

The UK government represented by British Deputy High Commission, Hyderabad, has engaged the agency, Price water house Coopers Private Limited (PWC), to prepare the strategy report to suggest the investment opportunities to the UK-based companies and to the AP government on ways and means for mobilizing funds to build the capital city.

The 76-page report exclusively available with this newspaper says that the reserve price includes total infrastructure cost incurred per acre by the AP Capital Region Development Authority (CRDA) vis-a-vis net saleable area. The net saleable area available in Amaravati is about 10,325 acres at a reserve price of 4.3 crore per acre. The cost will escalate at a rate of nine percent every year.

The report also estimated that AP government can get 31,000 crore and the maximum basic reserve basic price will escalate to about 6 crore. The report further said that the total funding requirement of the capital would be about 70,000 crore. As a participant in the development of the new capital, the UK Export Finance Lending Group will provide the maximum amount of loan at a rate of 85 percent of project cost in Amaravati for the UK-based investors. Loans will be available with an interest rate of 0.40 to 3.5 percent depending on the tenure. However, the state government has to bear the hedging costs.

Credits ET Realty

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