scorecardresearch
Friday, March 29, 2024
Support Our Journalism
HomeIndiaWhy Rs 55,000-crore Polavaram project is behind latest round of Jagan-Naidu face-off

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

Ruling YSR Congress Party and opposition TDP have been trading barbs, particularly over cost of remaining work on the Godavari river project & change of bidder.

Follow Us :
Text Size:

Hyderabad: The intense rivalry between the ruling YSR Congress and the opposition Telugu Desam Party (TDP) is now playing out over a massive development work in Andhra Pradesh — the Rs 55,000-crore Polavaram project on the Godavari river.

Last week, the Jagan Mohan Reddy government declared that the price quoted by a new bidder — Megha Engineering — for pending work on the dam and the power project had saved Rs 780 crore. The government is yet to award the work to Megha Engineering.

The Jagan government, which came to power in May, had terminated the contract of the earlier firm, Navayuga Engineering, and floated new tenders in August. Navayuga had been assigned the hydro-power work by the previous Naidu government in 2018.

The TDP is now questioning the new tender and the sole bidder, saying that Megha Engineering had quoted a much higher price than Navayuga in 2017. It cites this as the reason why it assigned the pending Polavaram work to Navayuga when it replaced the original contractor Transstroy.

“Flouting its own orders, the Jagan government has considered the lone tender and is handing the project to an unqualified, inexperienced firm. Megha Engineering had in 2017 quoted 9 per cent in excess of the estimate, which is why we gave the project to Navayuga,” Devineni Umamaheswara Rao, the irrigation minister in the previous Naidu government, told ThePrint.

“They seem to have coerced Megha to quote a lower price today, allowing for deviations and quality compromises tomorrow.”

The Polavaram is a multipurpose project near Rajahmundry that has been accorded national project status, meaning that the Central government will provide the funds while the state government will execute the work. The project comprises a 194 TMC reservoir for irrigation and drinking water purposes and a power plant of 960 MW capacity.

The project in focus

After assuming power in May, Jagan, who had accused Naidu of large-scale irregularities in the execution of the Polavaram project, visited the site and reviewed the work. The chief minister ordered the suspension of work on the entire project and based on a report of an expert committee, which the new government set up in June, terminated the contract of Navayuga Engineering.

The Jagan government claimed that the report found several lapses like the award of contract to Navayuga on nomination basis, deleting part of works from the original agreement, payment of mobilisation and advances of Rs 787 crore in case of the hydro-electric project even before the handing over of the site. It also pointed to delays in work completion.

Navayuga challenged the move in the Andhra Pradesh High Court, which has in its interim orders suspended the government order scrapping the contract. The firm, in its petition, claimed that the delay in the progression of work in case of power plant was because land was not handed over in time. Further, the firm assured the court that it is equipped to complete the project as per the schedule.

According to the agreement schedule with Navayuga, dam head works such as spillways, pilot channels and power house’s groundwork work was to be completed by August. Coffer dam, approach channels among other work were to be completed by September 2020, said Sudhakar Babu, chief engineer, Polavaram.

The power plant is the last component of the project, which was given time until May 2023 for total installation — 12 turbine units of 80 MW each. The first three units were to be installed by May 2021.

Officials put the dam head works completion percentage at 55. Even the excavation work for the power plant is only around 70 per cent finished as of now.


Also read: Chandrababu Naidu & Jagan Reddy’s intense rivalry: What one does, the other has to erase


The political wrangle

In August, the Jagan government invited fresh bids for the dam work and power project, which it called reverse-tendering, despite objections from the central Polavaram Project Authority (PPA) monitoring the project, the TDP, the BJP and even Union Jal Shakti Minister Gajendra Singh Shekhawat, who expressed concerns of the delay and cost escalation.

The state irrigation department estimated the fresh cost of remaining work — the headworks at the main dam and the 960 MW power plant — at Rs 4,987 crore.

Last week, officials announced Megha Engineering submitted a quotation for the work at Rs 4,359 crore — Rs 628 crore less.

“The Rs 628 crore translates to 12.6 per cent less than our estimation for the pending work. But we should consider overall contract value as Navayuga had acquired the hydel power project at 4.6 per cent in excess of the earlier estimate. So adding that cost (of Rs 152 crore) too, the total cost reduction we have now is about Rs 780 crore,” Adityanath Das, special chief secretary, irrigation and water resources, said.

The earlier estimate pointed out by the official is Rs 3,157 crore for the power plant component during Naidu’s time. Navayuga’s bid was for about Rs 3,309 crore then.

Jagan’s government, which all this while has been accusing Naidu of cost escalation and corruption, is losing no time in taking credit.

“TDP leaders opposed our transparent reverse tendering process saying it would cause loss. But now it has saved us Rs 780 crore,” said Anil Kumar Yadav, the state Irrigation Minister. “We will employ reverse tendering in other irrigation projects too where contracts were awarded at higher costs.”

The TDP is not taking it lying down. Naidu has termed Jagan’s tendering process as being haphazard with no utility.

“This government is flouting all established norms while also disregarding the Polavaram Project Authority,” Naidu had said in Amaravati earlier this month. “They seem to be having no idea at all as to how projects of such magnitude are executed and as a consequence, the dam’s safety has become a concern. By diluting the requirements the government has called for re-tenders, not reverse tenders, to hand the project to contractors close to them.”

Devineni alleged that all alterations are being made to the project at the behest of Telangana Chief Minister K. Chandrasekhar Rao. The TDP has long been alleging that the TRS’ financial support to YSRCP and intimidation of its leaders with assets in Hyderabad are behind Naidu’s defeat this summer.

TDP leaders also pointed out that Megha Engineering was involved in the Kaleshwaram Lift Irrigation project, upstream of the Godavari, a dream project of Rao’s.

“When works on power plant are at a good pace and production possible in two years, this government is ludicrously giving five years to the new firm to complete the plant,” Devineni said. “The loss in power production only (due to the delay) translates to over Rs 6,000 crore.”

Megha officials refused to comment on any aspect of the Polavaram tender as the project is not yet assigned to the firm.

A firm on the rise

Megha Engineering, which has had a meteoric rise in the country’s infra sector, earlier bagged irrigation projects in Andhra Pradesh during Jagan’s father Y.S. Rajasekhara Reddy’s regime.

But it also has ties to the TDP tenure. In 2017, the CAG found fault with the TDP government’s execution of Naidu’s showpiece Pattiseema Lift Irrigation project, meant to take the Godavari waters to Krishna near Vijayawada, saying it was awarded to Megha Engineering at inflated costs.

Officials said they would go ahead with Megha though it is the lone company to make Polavaram bid. “Since the entrustment part is pending before the court, the project would be allocated with the court’s permission,” Das said. “Once we check all credentials (of Megha), we will also inform the Centre.”

If Jagan has his way, Megha will be the third major infra firm involved in Polavaram. Transstroy was the first, assigned the task in 2013 by then Congress chief minister Kiran Kumar Reddy. Dissatisfied with its work, Naidu had in 2017 replaced Transstroy with Navayuga.


Also read: Tirupati board appointments were always controversial, and Jagan has only made it worse


 

Subscribe to our channels on YouTube, Telegram & WhatsApp

Support Our Journalism

India needs fair, non-hyphenated and questioning journalism, packed with on-ground reporting. ThePrint – with exceptional reporters, columnists and editors – is doing just that.

Sustaining this needs support from wonderful readers like you.

Whether you live in India or overseas, you can take a paid subscription by clicking here.

Support Our Journalism

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular