Singapore government decision to lead construction of a new capital city in Andhra Pradesh is testament to its pioneering approach to business
ranked as the best place in the world to do business. The UK comes in at number 21, below Malaysia, Austria and France.outh-east Asia has an invigorating buzz about it. Economies are growing quickly, and Singapore was recently
The go-getting entrepreneurialism of Singapore has led its government to agree to support the Indian state Andhra Pradesh in building a new capital city. It will be a stupendous 7,235 square kilometres, 10 times the size of Singapore’s own 716 square kilometres. The new city is expected to cost £10.7bn ($16.5bn).
Andhra Pradesh was formally split in two in June 2014 and will lose its current capital Hyderabad to the new state of Telangana. Singapore signed an agreement with the Andhra Pradesh government in December to prepare the master plan and develop the new city. This plan should be finished within six months, and the first phase of construction, which includes government, commercial and residential buildings, should be completed within five years. Singapore companies will build the utilities, and the Singapore-based and government-funded Centre for Liveable Cities will train officials of the state government, sharing its knowledge on liveable and sustainable cities.
The new city is likely to have an IT focus. The Andhra Pradesh chief minister Nara Chandrababu Naidu put Hyderabad on the global IT map, inviting software companies such as Microsoft to set up development facilities.
There will be many challenges to creating a new city, not least the threat of corruption. Singapore is one of the world’s least corrupt countries, seventh in the international league table produced by Transparency International. India, by contrast, is one of the more corrupt countries, coming in at number 85. The UK is in 14th place.
The problem with corruption is often not so much the amount of money that changes hands corruptly, but that inexperienced contractors may win business at the expense of capable ones. They may also be allowed to produce sub-standard work, cut back on health and safety and delay completion. This is particularly prevalent in the construction industry: road surfaces break up prematurely, bridges collapse and lives are lost. These issues often occur when contractors fraudulently take advantage of inadequate contracts management. Were such problems to occur in Andhra Pradesh, it would not only be an enormous setback to construction plans, but would do collateral damage to Singapore’s reputation.
Success will therefore require excellent project and programme management, contracting and contracts management and a resilient anti-fraud and corruption plan. The procurement and contracting team must be independent from the operational teams, and have its own reporting lines both to the programme manager and a very competent board. A strong, independent audit team is a must.
This project does carry some risks for Singapore. However, in undertaking the project, Singapore shows a focus and vision which is arguably unmatched in developed countries. It has built a powerful economy despite having virtually no natural resources. Successful delivery of such a major project in India should further strengthen its brand and reputation as a global business leader.