‘Will not bear any additional financial burden of Polavaram,’ says Centre

The Centre will not bear the additional expenditure, if any, to be incurred by the Andhra Pradesh government headed by chief minister Y S Jagan Mohan Reddy on the Polavaram major irrigation project on Godavari river, on account of delay in the execution of the project.

The Polavaram Project Authority (PPA), a wing of the Union ministry of water resources, in its report submitted to the Centre on Friday, asserted that the decision of the state government to terminate the contract of present firm Navayuga Engineering Company Limited (NECL) and go in for fresh tenders will result in huge expenditure, rather than bringing down the project cost. A copy of the report is available with HT.

It reminded that the legal and contractual issues arising out of the fore-closure of the contract of initial bidders for the construction of Polavaram head work in 2009 are still unsettled.

“Similar issues are likely to crop up this time also. Apart from wastage of time and resources of the department, it may also increase the financial liability of the state government. The Government of India needs to be insulated from any additional expenditure on this account,” PPA chief executive officer R K Jain said.

The report said there is no guarantee that the bids in the re-tendering process will be lower than the ongoing contract, thus making the whole process infructuous. Moreover, the pre-closure of the existing contract will also have additional cost by way of compensation to be provided to the contractor for demobilisation etc.

Quoting former director (technical) of the National Hydro Power Corporation (NHPC) D P Bhargava, the PPA report said tendering and mobilization of resources by a new contractor might take around 8-10 months to achieve the requisite pace of work which may ultimately delay the completion of the project.

It pointed out that as per the latest notification by the state government calling for reverse tendering, the new contractor would be given time till October 2021, whereas Navayuga had already committed to complete the project by April 2021. “So, the government itself has admitted that the project is going to be delayed by six months,” the PPA official said.

During the emergency meeting of the PPA, Polavaram project officials had informed that the existing contractor had to bear the defect liability for two years and undertake operation and maintenance for five years. “It will not be possible to impose these provisions on the existing contractors after the termination of their contract.

Also, it may be technically difficult to attribute any particular defect(s) between the old and the new contractors. This will create unforeseen complications,” the PPA said, adding that it might further hamper the pace of construction of the project.

The delay in completion of the Polavaram project on account of change of contractors will also cause additional expenditure on power used for lift irrigation schemes like Pattiseema, Purushottapatnam, Tadipudi and Pushkara. The schemes were constructed on the Godavari river for irrigating crops, pending completion of the Polavaram project and would cease to exist once the main project is completed.

“If these schemes continue to run due to delay in the Polavaram project, the government will incur an additional burden of ₹300 crore per annum,” the PPA report said.

State irrigation minister P Anil Kumar Yadav, however, said the state government would ensure there was no time overrun and cost overrun in the execution of the Polavaram project. “There is no scope for any increase in the project cost, as feared by the PPA. It is the responsibility of the state government to see that there is no scope for any irregularities,” he said.