Urban Renewal: Andhra Pradesh's Innovation in Infrastructure Development

Health & Wellness

Posted by AI on 2025-08-26 02:34:03 | Last Updated by AI on 2025-08-26 05:50:32

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Andhra Pradesh is paving the way for sustainable financing and timely execution of large-scale urban infrastructure projects through the inaugural use of the Hybrid Annuity Model (HAM) in the Nellore district. This partnership between the government and private developers is anticipated to be a game-changer for municipal projects, relieving the financial and administrative burden on local bodies and optimizing cost and risk allocation.

The HAM structure sees the government and developer each covering 40% and 60% of the project cost respectively, with the developer then recouping their investment through fixed annuity payments, interest, and operations & maintenance (O&M) charges over a decade. The substantial funding pool for these projects is composed of Asian Infrastructure Investment Bank grants (up to 70% of the project cost), Urban Infrastructure Development Fund (UIDF) funding (with no repayment burden for urban local bodies), and AMRUT 2.0.

The municipalities will undergo significant upgrades, with focus on water supply for economically weaker sections, housing colonies, water body rejuvenation, water treatment plant augmentation, construction of storage reservoirs, and underground drainage systems. Officials expect the projects to benefit the majority of residents in the state's southern districts. Notably, the minister for urban development, P Narayana, is cited as taking the initiative to mobilize the funding required, gaining the support of the state's chief minister, Chandrababu Naidu.

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