Board Approves Panel Deferral of Amaravati Investigation Recommendation

The World Bank’s Board of Executive Directors on July 13, 2018, approved an Inspection Panel decision to defer for a second time its recommendation on whether an investigation is warranted of the proposed Amaravati Sustainable Capital City Development Project in India. The Panel proposed to report back to the Board after nine months or when Bank management authorizes the appraisal of the proposed project, whichever arises earlier.
 
The objective of the project, which has yet to be approved by the Board, is to “provide select urban infrastructure in designated locations of Amaravati Capital  City, and to develop capacity of its urban governance institutions.” The total financing for the project is US$715 million, of which Bank lending is proposed to be US$300 million through an International Bank for Reconstruction and Development investment project loan.

A May 2017 Request for Inspection, which the Panel registered in June 2017, was filed by landowners from the area proposed for the construction of the city. They allege harm from a land pooling scheme being used to assemble the land required for the city, as well as from other project activities. The Requesters claim harm related to their livelihoods, environment and food security, and allege a lack of consultation as a result of the Bank’s non-compliance with its environmental and social policies in preparation of the proposed project.

Last December, the Board had approved the Panel’s recommendation to defer its investigation recommendation for six months to “provide an opportunity for the Bank to address the Requesters’ concerns” and to “introduce measures to ensure that the project’s preparation is in compliance with Bank policies and procedures.” The Panel met Bank management in April and June 2018 to receive updates on the progress of project preparation and on the implementation of the proposed actions. During this same period, the Panel received regular communications from the Requesters who raised several concerns, including issues of accessibility and responsiveness of the Grievance Redress Mechanism and the establishment of the Citizen Advisory Committee.

The Panel understands from the management updates that several actions to address the Requesters’ concerns, including the independent assessments of the land assembly instruments that will serve as inputs to the project’s safeguards instruments, are still underway and require more time to be completed. The Panel notes that these assessment studies are a key element of the actions proposed by management. The Panel further notes that, according to management, the authorization to appraise the project can only be requested once all required safeguards instruments have been cleared and disclosed. The Panel is of the view that there is a need to await further progress on the assessment studies and other actions in order to be able to assess the implementation of management’s commitments to address the allegations of harm and Bank non-compliance raised in the Request for Inspection.

Considering the above, the Panel on June 26, 2018, proposed a second deferral of its recommendation for nine months or when management authorizes the appraisal of the proposed project, whichever arises earlier, and the Board approved. 

All public documents related to the case to date can be found on the Amaravati case page on the Panel’s website.