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After months of wrangling, Modi govt now likely to pay part of Andhra’s Polavaram dam project

Jal Shakti ministry has asked finance ministry to reimburse over Rs 4,000 cr that Andhra Pradesh has spent on the drinking water component of the project.

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New Delhi: After a lot of back and forth, including multiple meetings between Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy and Prime Minister Narendra Modi, there seems to be some movement on funding issues related to the Polavaram multipurpose dam project

Senior officials, both in the Andhra Pradesh government and the Union Jal Shakti ministry, have confirmed to ThePrint that the Jal Shakti ministry had written to the finance ministry about a fortnight ago, recommending that the latter reimburse the over Rs 4,000 crore that the state government has spent on the drinking water component of the project. 

So far, the finance ministry was funding just the irrigation component of the project, excluding the water component, which cost Rs 4,068.43 crore, leaving it to the state government to bear the cost.

A Jal Shakti ministry official said releasing the money will allow the state government to finish the project up to a height where benefits start flowing to the farmers. Central government sources said the finance ministry is likely to accept the recommendation of the Jal Shakti ministry.

The Polavaram, a multipurpose project across the Godavari river near Rajahmundry in Andhra Pradesh, comprises a 194 TMC reservoir for irrigation and drinking water purposes and a power plant of 960 MW capacity. Once complete, it will benefit all the 13 districts of Andhra Pradesh and help irrigate nearly three lakh hectares of land. 

It was declared a national project in 2014, implying that the state government will execute it on the Centre’s behalf and the latter will reimburse every penny spent by the state to complete it. 

Government sources said that in its letter to the finance ministry, the Jal Shakti ministry has said that the Polavaram multipurpose dam is a national project, which specifically provides for funding of both irrigation and drinking water components.

“Central Water Commission, the technical wing of this department, has also recommended along similar lines, for the Polavaram project. Thus the above referred exclusion of water component is an aberration from the guidelines of national project scheme of this department,” the letter, which ThePrint has accessed, states.

The Jal Shakti ministry’s letter also draws a parallel between the Polavaram and other national projects such as Gosikhurd in Maharashtra and the Renuka Dam project in Himachal Pradesh among others, where the Centre is funding the water component as well. 

The Polavaram project is meant to bring the Godavari water to the Krishna river.
The Polavaram project is meant to bring the Godavari water to the Krishna river.

No consensus yet on the contentious overall project cost  

Including the water component in funding is just one of the issues where a breakthrough is likely to be achieved. Consensus still eludes the larger and far more contentious issue of what is the actual cost of the project.  

When work began on the Polavaram project in 2005, the project cost was estimated at Rs 10,151 crore. The project has since missed several deadlines and the cost has escalated manifold.

While the Centre has capped the project cost at 2013-14 price levels, which comes to Rs 29,027 crore, this has been rejected by the state government. The state wants the project cost to be approved based on the 2017-18 price level, which is around Rs 47,725 crore. 

The state government has said that it will be difficult to complete the project at a reduced rate as the cost has increased manifold since 2014 when it was declared a national project.

The Centre’s stand had forced Andhra Pradesh CM Jagan Mohan Reddy to shoot off a letter to Prime Minister Narendra Modi last October saying that any unrealistic cost estimate would result in the project remaining incomplete. 

A senior state government official told ThePrint that the Polavaram Project Authority, set up in 2014 to execute the project, has already informed the Jal Shakti ministry after its 13th meeting last year to approve Rs 47,725 crore based on the 2017-18 price level as recommended by it and the revised cost committee. 

“The PPA has considered the Revised Cost Committee report of last March and approved the recommendations of the estimated cost figures for the 2017-18 price levels at Rs 47725.74 crore. The PPA has already given its recommendation to the Jal Shakti ministry. The Centre should now expedite its decision so that the project is completed on time,” the official, who did not want to be named, said.  

The new deadline to complete the project is April 2022. 

(Edited by Arun Prashanth)


Also read: Why power of padayatra is fading in Telugu politics from YSR’s days of ‘charm & showmanship’


 

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