Amaravati project: Now China-led investment bank 'withdraws' under public pressure

By Our Representative
In yet another setback to powers-that-be, the China-led Asian Infrastructure Investment Bank (AIIB) has pulled out of Amaravati Capital City Project of the Andhra Pradesh government. The decision, communicated by its spokesperson Laurel Ostfield, follows the World Bank -- a co-financier of the project -- last week pulling out of the project.
AIIB was considering to finance $200 million out of the total $715 million project, while the World Bank was considering to $300 million. Never before has the four-year-old AIIB dropped out of a project which it had considered to finance.
Ostfield said, “AIIB is no longer considering the Amaravati Sustainable Infrastructure and Institutional Development Project for funding.”
AIIB was considering this project only as a co-financier and was to adhere to the World Bank’s safeguard policies in this project. After the Bank’s decision to exit from the project, AIIB’s decision on this was being keenly watched.
The civil rights group Working Group on International Financial Institutions (WGonIFIs), which had been campaigning against the project, said, there were "monumental violations" in land transactions of the project, affecting agricultural, coastal, and pastoral labourers, tenants, landless families, and Dalits.
It added, these sections underwent "severe pressure and fear due to the land acquisition and displacement process, financial non-viability of the project, massive land-grabbing of the fertile land in the name of voluntary land-pooling." These issues "were raised time and again with the government and both AIIB and World Bank by the affected communities, people’s movements and civil society organisations."
WGonIFIs called AIIB's withdrawal "a victory of the people who despite intimidation and coercion from the administration, and indifference from financial institutions, stood their ground."
Commenting on the development, Narmada Bachao Andolan leader Medha Patkar recalled, World Bank funding of projects often brings in other bi-lateral and muti-lateral financing agencies, too. "They refuse to independently do due-diligence, as we saw in the case of the Narmada dam project."
She added, of late, this nexus between financial institutions and mechanisms are getting strengthened, and only people united and scientific facts can make them bow down, as we have seen in the case of the Amaravati project.
The World Bank statement the other day on the Amaravati project saying that it was the Government of India which withdrew the request for lending, , said WGonIFIs, reminded one how the government behaved in the same way as in the case of the Sardar Sarovar Project (SSP) in Gujarat in 1992, about 27 years back.
"After a scathing report on the Sardar Sarovar project by the Morse Committee, the World Bank insisted that the Indian government must meet tough conditions – mostly on resettlement and rehabilitation (R&R) and environmental safeguards.
The World Bank planned to send a team to India to check that the government had fulfilled necessary conditions before paying the remaining $170 million of the loan. One the day before the deadline -- March 31, 1992 -- the Bank announced that India had ‘decided to complete construction work on its own’.
In this case, too, said WGonIFIs, ahead of the World Bank's Inspection Panel was to deliver its decision on the investigation into the Amaravati project, the Government of India "withdrew".
“AIIB pulling out of the project after World Bank is a great victory for the people. The technicality of Government of India withdrawing is only hogwash. A probable investigation by the Inspection Panel would have revealed several violations and methods of coercion and unjust use/deployment of force on the farmers by the former Chandrababu Naidu’s government,” said Prof C Ramachandraiah of the Centre for Economic and Social Studies, Hyderabad.

It is a victory of the people who despite intimidation and coercion from the administration, and indifference from financial institutions, stood their ground

"This exit of two big financial giants from this environmentally and socially disastrous project is a victory of the people, civil society organisations, activists who have been relentlessly challenging this project at various fora for the past four years", said Anuradha Munshi, Centre for Financial Accountability.
She added, "It is time for these financial institutions to realise that people will raise a collective voice against them, and will win if these institutions continue to follow undemocratic and unjust ways to finance disastrous projects.”
Meanwhile, WGonIFIs demanded, the state government should scrap the Andhra Pradesh Capital Region Development Authority (APCRDA) Land Pooling Act, APCRDA itself and notifications passed subsequently, which are "inconsistent" with the the Land Acquisition and Rehabilitation Act, 2013. Also, the government should return the plots that were taken involuntarily from the people.
It also demanded initiation of judicial enquiry into socio-economic damage, land transactions and psychological trauma of agricultural, coastal, and pastoral labourers, tenants, landless families, and Dalits, who have "undergone severe pressure and fear, due to the land acquisition and displacement process".
At the same time, WGonIFIs said, the government should "announce a special compensation package for Dalits and other assigned landholders, as their social life has been damaged to a great extent in the past five years", even as "prosecuting brokers, real estate agents and other persons who purchased or facilitated the purchase of assigned lands after the announcement of the Capital Region."
WGonIFIs insisted, the government should simultaneously "stop attempts to de-list Dalit farmers from records through dubious documentary manipulation, and consider all Dalit cultivators in possession of the land as the original owners of the land for purposes of compensation and R&R under the 2013 Act."