No takers for redevelopment of Vysakhi Jala Udyanavanam

In a development unforeseen by the Visakhapatnam Metropolitan Development Authority (VMRDA), the ambitious transformation of the iconic Vysakhi Jala Udyanavanam site into an Urban Entertainment Zone has hit a stumbling block with the absence of interested bidders. The prime 3.48-acre plot, situated in the heart of the city, was envisioned as a vibrant hub for families and thrill-seekers, boasting a state-of-the-art gaming zone, immersive 7D-12D animation experiences, a captivating aquarium wall, and a diverse 24/7 drive-in food zone.
The project, intended to be executed through a private-public partnership (PPP) model with a 33-year land lease, offered a potentially lucrative proposition with an estimated internal rate of return of up to 15 percent. However, despite these promising financial prospects, no developers within the State have come forward to take up the project thus far.
Industry analysts point to several potential deterrents for this unexpected lack of enthusiasm.
The primary concern surrounding the project appears to be the significant financial obligations stipulated in the lease agreement. Prospective developers are required to bear a monthly rent of Rs. 84.21 lakh (including GST), calculated as one per cent of the land’s currently estimated value. Furthermore, a percentage of the gross income generated by the completed entity is also expected as part of the revenue-sharing structure.
Adding to the apprehension is the issue of steadily increasing land values imposed by the Andhra Pradesh government in recent years for tax purposes. The YSRCP government’s annual increments in these values have further dampened the potential ROI for developers, casting a shadow of uncertainty on the project’s financial viability.
Recognising the need for an extended window to attract serious players, the VMRDA has reissued the tender notification, extending the deadline for submissions until February 3. Additionally, an interesting twist in the story is the proposal to incorporate limited overnight accommodation facilities within the Urban Entertainment Zone. However, officials have emphasized maintaining a careful balance, ensuring that such accommodations occupy no more than five per cent of the total area to preserve the core concept of the project.
As the revised deadline approaches, the fate of the Vysakhi Jala Udyanavanam redevelopment remains in the balance.
The question of whether developers will be swayed by the revised timeline and addressable concerns, or whether the ambitious vision for this prime city location will remain on hold, will be answered in the coming days.