The Andhra Pradesh government’s proposal to convert the controversial beach-front Rushikonda palatial complex in Visakhapatnam into an international-standard hospitality destination through public-private partnership has hit the road block with no private player expressing interest in the project, state tourism minister Kandula Durgesh said on Saturday

Published on: Sep 27, 2026, 07:46:00 IST

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The Andhra Pradesh government’s proposal to convert the controversial beach-front Rushikonda palatial complex in Visakhapatnam into an international-standard hospitality destination through public-private partnership has hit the road block with no private player expressing interest in the project, state tourism minister Kandula Durgesh said on Saturday.

Addressing reporters in Rajahmundry, Durgesh said the previous YSRCP regime had built the Rushikonda palace for “personal luxury” rather than commercial viability. “Major hospitality companies are currently not willing to take over the Rushikonda Palace buildings because the large room sizes do not suit standard hotel operations,” he said.

The minister, however, said despite the lack of immediate takers from large hospitality chains, the government maintains that the complex would eventually be put to use for the hospitality purposes or utilized to boost tourism. “We shall resolve these challenges and bring the buildings into practical public or tourism use soon.”

Durgesh said the palatial complex, built as the residence-cum-camp office for former chief minister Y S Jagan Mohan Reddy during his tenure, was lying vacant for two years, and lost the state exchequer an annual sum of ₹7 crore for its maintenance.

On July 3, the Andhra Pradesh Tourism Development Corporation (APTDC) on Friday invited expressions of interest (EOI) from hospitality operators, hotel chains, resort developers, infrastructure developers and investors for the operation, maintenance and commercial utilisation of the Rushikonda building complex.

The decision followed a recommendation by a cabinet sub-committee headed by finance minister Payyavula Kesav to develop the ₹452-crore hilltop complex into a luxury resort while ensuring continued public access to parts of the property.

The corporation proposed that the project is developed in two places. In the first phase, the private operator will take up operation, maintenance and commercial management of the existing Rushikonda building complex, spread across 9.8 acres, consists of five G+1 building blocks with a built-up area of 13,542.21 square metres. It is equipped with landscaped gardens, internal roads, pedestrian pathways, parking facilities and supporting infrastructure.

The APTDC proposed to take up expansion in two vacant land parcels within the complex that would permit nearly 4,800 square metres of additional built-up area, subject to statutory approvals.

The additional construction has been proposed because the existing accommodation capacity may not be sufficient for a world-class luxury hospitality project.

The second phase involves the development of a nine-acre land parcel at the foothills of Rushikonda. Preliminary assessments indicate that around 1.25 acres are suitable for G+1 construction, subject to Coastal Regulation Zone (CRZ) approvals and other statutory clearances.

Several leading hospitality brands, including Taj, Atmosphere Core, Leela and Fema, have reportedly inspected the property and expressed preliminary interest in operating the resort, but none of them finally showed interest in taking up the venture.

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