The Andhra Pradesh government is close to taking a final decision on the future use of the Rushikonda Palace in Visakhapatnam, with an emphasis on ensuring public utility while generating sustainable revenue for the state exchequer, Ministers Payyavula Keshav and Kandula Durgesh said on Wednesday.

Addressing the media after the third meeting of the Cabinet Sub-Committee on Rushikonda Palace, the ministers said the government was keen to adopt a viable and revenue-positive model without placing an additional financial burden on the state. The meeting was held at the Secretariat in Amaravati, with Social Welfare Minister Dola Bala Veeranjaneya Swamy participating virtually.

Senior officials, including Tourism Special Chief Secretary Ajay Jain, AP Tourism Authority CEO and APTDC Managing Director Amrapali Kata, and other tourism department officials, made detailed presentations on the existing structures and legal constraints governing the site.

The ministers revealed that several reputed hospitality players, including Taj, Leela Palace, Atmosphere Core and FEMA, had expressed interest in the project. However, they clarified that the existing buildings were not fully suitable for hotel operations in their present form, and suggestions had been made for additional construction, subject to strict regulatory compliance.

A key issue discussed was compliance with Coastal Regulation Zone (CRZ) norms. Of the total nine acres on Rushikonda hill, construction is prohibited on seven acres under CRZ rules. Deliberations focused on how the remaining two acres could be optimally utilised without violating environmental regulations.

“The sub-committee has broadly leaned towards a hospitality-driven model, provided it is commercially viable and legally sound,” the ministers said, adding that international best practices in beach-front development, such as those followed in Maldives and Puducherry, were also examined.

Minister Payyavula Keshav said proposals seeking additional land beyond permissible limits were not acceptable under CRZ norms. He added that two blocks of the palace complex would be earmarked for public use, including an art gallery and cultural programmes. A comprehensive survey of tourism department lands has been ordered, and further decisions will be taken after reviewing the report.

Minister Kandula Durgesh was critical of the previous government, alleging that demolition of revenue-generating resorts to build the palace had resulted in a loss of nearly Rs 7 crore in annual income, besides imposing a monthly maintenance burden of about Rs 25 lakh. “Our focus is on ensuring public access and steady revenue within the available land,” he said, noting that only about two acres were practically usable due to coastal erosion.

The ministers said the sub-committee would meet again on December 28 to finalise proposals, which will then be placed before the state Cabinet for approval.