Andhra Pradesh government is understood to have decided to build its new capital city near Amaravati, 35km from Guntur. The ancient town is on the banks of river Krishna with Buddhist monuments.

Recently, the Centre-appointed committee headed by Sivaramakrishnan, indicated that it is the prerogative of the State government to decide the location and other parameters of its new capital city.

Amaravati was once home to powerful Satavahana dynasty. The town is an attractive tourist spot in AP with a lot of Buddhist relics and a famous stupa erected during emperor Ashoka's time.

Amaravati has enough vacant government land needed to build a capital city for the state, a senior minister in the state government explained to The Times of India.

The Minister said that Chief Minister N Chandrababu Naidu is very keen on the location near Amaravati, instead of the earlier proposed spot near Mangalagiri between Guntur and Vijayawada.

The Minister said that Naidu opted for Amaravati due to availability of vast government land there. On the other hand, the land in Mangalagiri is owned by private owners and the government will have to face numerous problems to acquire the land. Even land prices are very high near Mangalagiri, and hence the state government has dropped it, the minister explained.

Naidu wanted to develop the new capital city on both sides of river Krishna by building bridges on the river. "Land between Guntur and Vijayawada near Mangalagiri is fertile and the prices are way too high, so we suggested Amravati and it has been accepted," said a senior government official.

Land prices near Mangalagiri have reportedly soared up to ₹15 crore per acre, whereas near Amaravati the prevailing prices are between ₹10-20 lakh per acre.

The State Revenue Department is also said to be keen on Amaravati as the State's new capital city.

The Department officials, who are working on the blueprint of the new capital city, say that the government plans to link a few mandals in Krishna and Guntur districts, spread on either sides of the river, with an eight-lane bridge between Achampet mandal in Guntur and Nandigama in Krishna district. Another such bridge will be constructed on the river between Kanchikacherla in Krishna district and Amaravati in Guntur district, the officials added.

The State officials are also planning to improve transportation links between Vijayawada and the new location for capital city near Amaravati by building a bridge between Gollapudi and Mangalagiri.

The bridge has already been sanctioned by the government and work will be taken up soon, the officials said. The purpose of constructing the bridge is to cut travel time between the newly proposed spot for the capital city and Vijayawada, the second largest city in AP after Visakhapatnam.

In addition to the available government land, private land will also be acquired if necessary to build the capital city, the officials said. The Revenue Department is yet to decide on the compensation to be paid to private land owners if the government wants to acquire private lands.

Naidu will reportedly make a formal announcement to declare the location of the new State capital city soon.