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Andhra govt won’t accept capped cost of Polavaram project, to urge Centre to revise amount

Polavaram Project Authority to request the Centre to approve Rs 47,725 crore to complete the project instead of Rs 20,398 crore that finance ministry had estimated based on 2013-14 price levels.

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New Delhi: The Andhra Pradesh government Monday refused to accept the reduced cost of Rs 20,398 crore to complete the Polavaram multipurpose project, an amount that had been estimated by the Union finance ministry based on 2013-14 price level, ThePrint has learnt. 

Officials of the Polavaram Project Authority (PPA) met Monday and decided to urge the Union water resources ministry to approve Rs 47,725 crore for the project, based on the 2017-18 price level as recommended by the PPA, a member of the PPA told ThePrint on the condition of anonymity.

The PPA is likely to send its recommendation to the Centre in the next few days, which will take a final call on the matter.

Polavaram, a multi-purpose 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.

The PPA was set up in 2014 to execute the project, and comprises of senior officers from the state government, including the principal secretary (water), Union Jal Shakti ministry and Central Water Commission as its members.

“We made a detailed presentation before the PPA today where we said that it will not be possible to complete the Polavaram dam project with Rs 20,398 crore based on 2013-14 price level. It is unrealistic as the cost of several components have escalated. We will request the Centre to approve the second revised cost estimate of Rs 47,725 crore based on the 2017-18 price level,” said the above-quoted PPA member. 

The member added that the PPA will send its recommendation to the Union water resources ministry with a request to expedite the investment clearance. 

The cost of the Polavaram project has become a major bone of contention between the Andhra government and the Centre after the latter capped the project cost at the 2013-14 price levels.

The Andhra government said it will be difficult to complete the project at the reduced rate as costs had increased manifold since 2014, when the Polavaram project was declared a national project. 

Chief Minister Y.S. Jagan Mohan Reddy had shot off a letter to Prime Minister Narendra Modi on 28 October, saying that any unrealistic cost estimate would result in the project remaining incomplete. 

The Centre has to foot 100 per cent cost of the national project. 

Also read: Why Rs 55,000-crore Polavaram project is behind latest round of Jagan-Naidu face-off

Other issues

A senior Andhra government official, who attended the PPA meeting Monday, said the state has also flagged the issue of the Centre removing the water supply component from the irrigation component of the Polavaram project, leaving it to the state government to bear the cost. 

“This is against the norms of the Central Water Commission. The Government of India has to bear the entire cost of a national project,” said the official on the condition of anonymity. 

Once completed, Polavaram is expected to benefit all 13 districts of Andhra Pradesh and help irrigate nearly 3 lakh hectare of land.

Also read: Monday storm for Polavaram as Modi govt caps project cost to half, angers Andhra


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