As World Bank pulls out of Amaravati Capital City Project, activists call it 'major' victory

By A Representative
In a significant move, which is likely to have repercussions at multiple levels, the World Bank has decided to pull out of the $300 million lending to the Amaravati Capital City project in Andhra Pradesh. Wthe orking Group on International Financial Institutions (WGonIFIs) and the affected communities of the Amaravati Capital City Project have welcomed the decision, saying the project was being implemented without taking into account threat to people’s livelihood.
The Bank arrived at this decision after a series of representations it received from many people’s movements and civil society organisations over the past years, and a complaint to its accountability mechanism, Inspection Panel, by the affected communities.
“We are happy that the World Bank took cognisance of the gross violations involved in the Amaravati Capital City project, threatening the livelihood of people and fragile environment. After Narmada and Tata Mundra, this is the third major victory against the World Bank Group”, said Medha Patkar, senior activist of the Narmada Bachao Andolan (NBA) and the National Alliance of People's Movements (NAPM), India’s top human rights network.
“We are happy that the Inspection Panel, which was created due to the struggle of NBA, played its critical role here. While we celebrate this victory of the people, who stood up to the intimidation and terror of the state, we warn the government and financial institutions not to push their agenda without the consent of the people”, she added.
Ever since the Amaravati Capital City Project was conceptualised in 2014, environmental experts, civil society organisations and grassroots movements were expressing their anguish over “grave violations” of social and environmental laws, pointing toward the project’s financial unviability, massive land-grabbing of the fertile land in the garb of voluntary land-pooling, and open threats to the complainants by none other than the then chief minister.
Mallela Sheshagiri Rao from the Capital Region Farmers Federation said, "With uncertainty hovering above us in respect to our land and livelihood, we had suffered sleepless nights with fear and pain. The struggle has made a mark in our lives that we can never forget. We hope the larger message of World Bank’s pulling out of this project will be heard by the state and other financiers and will address the concerns of people with honesty and commitment.”
Another co-financier of the project Asian Infrastructure Investment Bank (AIIB), projected themselves as the post-Paris bank, signalling the commitment to tackle climate emergency, is in focus now.
While the project is still listed under consideration in their official documents, having entered in this project only as a co-financier and AIIB used World Bank’s policies to adhere to in this project, as a co-financier, the status of the AIIB now is unclear, with World Bank pulling out.
"For a change, good sense has prevailed upon the Bank to withdraw from the disastrous programme. This also vindicates our stance that despite its rhetoric of a post-Paris bank, Asian Infrastructure Investment Bank (AIIB), which is a co-financer in the project, can no longer hide behind the World Bank which it has been doing as a co-financier," said Sreedhar R, chair, International Committee, NGO Forum on the Asian Development Bank (ADB), and director, Environics Trust.

Another co-financier of the project Asian Infrastructure Investment Bank (AIIB), projected as the post-Paris bank, signalling the commitment to tackle climate emergency, is in focus now

Tani Alex of the Centre for Financial Accountability (CFA), another civil rights organization, said, “This is another instance of people’s power forcing institutions like World Bank responsive to their concerns. While the people affected by the project stood a firm ground, support and solidarity from a number of other organisations amplified their concerns at appropriate forums. This is a victory of people and their unnerving demands for accountability and justice.”
Meanwhile, WGonIFIs has demanded the State government should scrap the Capital Region Development Authority (CRDA) Land Pooling Act, CRDA authorities and notifications passed subsequently, which are “inconsistent” with the 2013 Central Act, and fully implement the Land Acquisition and Rehabilitation Act, 2013 in the case of all the affected people of Amaravati Capital Region. Also, the government should return the plots that were taken involuntarily from the people.
At the same time, it demanded initiation of a judicial enquiry into the socio-economic damage, land transactions and psychological trauma of agricultural, coastal, and pastoral labourers, tenants, landless families, Dalits who have undergone severe pressure and fear, due to the land acquisition and displacement process.
Other demands include a special compensation package for Dalits and other assigned landholders as their social life has been “damaged”, persecution of brokers, real estate agents and others who purchased or facilitated the purchase of assigned lands after the announcement of Capital Region”, and stop attempts to “de-list” Dalit farmers from records through dubious documentary manipulation.
The decision to develop Amaravati as new capital of Andhra Pradesh was born after bifurcation of the Andhra Pradesh in June 2014, both the new states of Telangana and Andhra Pradesh decided to share Hyderabad as capital for 10 years. In September 2014, N Chandrababu Naidu, former chief minister of Andhra Pradesh, announced Amaravati as the proposed capital city. The World Bank and AIIB were under consideration to finance the USD 715 million project.
In its risk assessment, the World Bank assigned this project category A, signifying social and environmental impacts. The project was criticised for building the city on the floodplains of river Krishna, diverting fertile farmlands and forests, displacing around 20,000 families, forcefully acquiring lands, and favouring contractors for the construction of the city.
A complaint with the Inspection Panel (independent accountability mechanism) of the World Bank was filed by the affected communities in 2017 to investigate the project for violation of the World Bank’s safeguard policies.

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