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Board Approves Panel Deferral of Amaravati Investigation Recommendation Following New Actions Proposed by Bank Management to Address Complainant Concerns

​The World Bank’s Board of Executive Directors on December 12, 2017, approved an Inspection Panel decision to defer its recommendation on whether an investigation is warranted of the proposed Amaravati Sustainable Capital City Development Project in India. The Panel deferred its recommendation for up to six months after Bank management proposed additional actions designed to address the concerns raised in a Request for Inspection of the proposed project.

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 the Bank lending is proposed to be US$300 million through an International Bank for Reconstruction and Development investment project loan.

The May 2017 Request for Inspection, which the Panel registered on June 12, 2017, was filed by landowners from the area proposed for the construction of the city. They allege harm from a land pooling scheme (LPS) 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. Bank management provided the Panel its response to the Request for Inspection on July 21, 2017.

A Panel team visited India from September 12-15, 2017, and met with the Requesters and other potentially affected community members, farmers who support the LPS and their representatives, representatives of the World Bank Country Office, officials from the Ministry of Finance and from the Andhra Pradesh Capital Region Development Authority, the agency responsible for developing the city, as well as civil society representatives.

On September 27, 2017, the Panel submitted its Report and Recommendation to the Board that recommended “carrying out an investigation into the alleged issues of harm and related potential non-compliance with Bank policies, especially relating to involuntary resettlement.” On November 27, 2017, Bank management submitted to the Panel an addendum that offered clarifications, an update on project preparation and additional actions to “complement and clarify” the actions presented in its July 21, 2017, response in order to fully address the Requesters’ concerns. Management indicated the addendum was based on recent field missions and discussions with the Panel.

After reviewing the addendum, the Panel submitted an updated Report and Recommendation to the Board. In the update, the Panel stated it was satisfied that the addendum and actions proposed by management “provide an opportunity for the Bank to address the Requesters’ concerns as identified in the Panel’s Report and Recommendation, and to introduce measures to ensure that the project’s preparation is in compliance with Bank policies and procedures.” Based on the addendum and the proposed actions, the Panel deferred its recommendation for up to six months as to whether an investigation is warranted. Within that period of time – when key planned assessment studies as well as other actions by management are expected to be completed – the Panel will inform the Board of its recommendation. In the meantime, the Panel will remain in contact with all relevant stakeholders.

The Request for Inspection, the Management Response, the Panel’s Report and Recommendation, the addendum to the Management Response, and the Panel’s updated Report and Recommendation are available on theAmaravati case page.