Foot Over Bridge connecting Novotel and Varun Bay Sands project approved

In a recent meeting, the Andhra Pradesh Cabinet cleared several high-impact proposals aimed at boosting industrial growth and tourism infrastructure across the state. Among the 28 major investment proposals approved, a key highlight was the green signal to Varun Hospitality’s Bay Sands project (the redevelopment of the Taj Gateway hotel in Visakhapatnam) with an estimated investment of Rs 899.50 crore. As part of the approvals, the government has also sanctioned the construction of a Foot Over Bridge (FOB) connecting the existing Novotel Hotel to the upcoming Varun Bay Sands property.

The bridge proposal, which is to be developed by the Visakhapatnam Metropolitan Region Development Authority (VMRDA), received formal approval via a Government Order (GO) issued by the Youth Advancement, Tourism and Culture (T) Department on 22 May 2025, on the condition that the structure be developed as an iconic architectural landmark.

According to the GO, the Varun Bay Sands project also benefits from a revised incentive package under the newly launched AP Tourism Policy 2024–29, which aims to encourage private investment in tourism by offering attractive incentives and simplifying project approvals.

The project, proposed by M/s Varun Hospitality Private Limited, Visakhapatnam, aims to transform the existing property into a world-class five-star deluxe hotel integrated with service apartments and commercial office space. The project will now involve an investment of ₹899.50 crore, up from the earlier proposed Rs 722 crore, and is expected to generate direct employment for around 1,300 people.

A Revised Proposal for a Larger Vision

Originally sanctioned under the A.P. Tourism Policy 2020–25, the project was previously awarded a set of incentives, including a five-year SGST reimbursement and fixed-cost power subsidy. However, the company did not initiate construction, stating that the incentives were inadequate for a project of such scale. In February 2025, Varun Hospitality submitted a revised proposal, seeking benefits under the updated 2024–29 tourism policy, and classified the project as an “Ultra Mega Tourism Project.”

The new plan envisions a 318-key five-star hotel complemented by commercial and office spaces. The proposal was supported by a detailed Techno-Economic Viability Study and reviewed positively by the State Investment Promotion Committee (SIPC) in April before being taken up by the SIPB.

Following thorough deliberations, the State Investment Promotion Board (SIPB) recommended an extended incentive structure that aligns with the current policy’s goal of promoting private investment in tourism, particularly through anchor destinations capable of attracting both domestic and international visitors.

Key incentives approved by the government include:

100% reimbursement of net SGST for a period of 15 years or until the realization of 100% of fixed capital investment, whichever comes earlier.

100% reimbursement of stamp duty and transfer duty, including on leases, mortgages, and hypothecations.

Waiver of land use conversion charges where applicable.

Capital subsidy of 10% of Fixed Capital Investment (FCI), capped at ₹40 crore, disbursed in five equal instalments.

Electricity at industry rates and reimbursement of electricity duty for five years.

Property tax, water supply charges, and sewage tax at industry rates for tourism-related infrastructure.

Employment subsidy based on the Employment-to-Investment (E/I) ratio, as per the government’s Employment Incentive Policy.

Construction of a Foot Over Bridge connecting the existing Novotel Hotel with the proposed Varun Bay Sands Hotel project. Approval is conditional upon the bridge being designed as an iconic structure.

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