Court puts Naidu on back step with Amaravati stay order

The Hyderabad High Court on Monday stayed the operation of the Swiss Challenge method adapted for the selection of a master developer for the construction of Amaravati As per the Swiss Challenge method, the proposal submitted by the Singapore consortium will be allowed to be challenge by any other potential master developers for lesser project costs. The notification has been challenged by a local developer who has raised issues such as lack of transparency in the process

In a major setback to Andhra Pradesh Chief Minister Chandrababu Naidu's grand design of building Amaravati as a world-class capital city, the Hyderabad High Court on Monday stayed the operation of the Swiss Challenge method adapted for the selection of a master developer for the construction of the core capital.

The bench of Justice MS Ramachandra Rao stopped the process initiated by the Capital Region Development Authority (CRDA) two months back. The High Court asked the government to file its affidavit and adjourned the case to October 31, 2016.

The fresh dispute over the Swiss Challenge method is now expected to further delay the capital mega project.

Naidu's government has chosen the controversial Swiss Challenge method for the selection of developers despite opposition from experts and political parties. In July 2016, the state cabinet gave its approval to go ahead on the proposal submitted by two Singapore Companies Ascendas-Singbridge Private Limited and Sembcorp Industries Limited on October 30, 2015.

As per the Swiss Challenge method, the proposal submitted by the Singapore consortium will be allowed to be challenge by any other potential master developers for lesser project costs. Following the cabinet approval, the Capital Region Development Authority (CRDA) issued a tender notification on July 18.

The Singapore consortium has offered a 42% stake to Amaravati Development Company, a special purpose vehicle (SPV) of the state government while holding 58% to itself.

However, the notification has been challenged by Hyderabad-based Aditya Housing and Infrastructure Development Corporation. The petitioner raised many issues such as lack of transparency in the process and inadequate bid submission proposal given in the Request for Proposal (RFP) issued by CRDA for the development of the start-up area in Amaravati, among other things.

The petitioner also challenged the non-disclosure of the offer made by the Singapore consortium. The petitioner, represented by its director Mallikarjuna Rao, also brought to the notice of the Court that the faulty guidelines, the process and deliberations the government held with the Singapore companies appear to be too skewed in favour of the Singapore companies to prevent the other competitors to effectively challenge the proposal.