The Rs 58,000-crore Polavaram project is one of the most expensive ever undertaken by an Indian state

Highlights Andhra government issues notifications for tenders worth Rs 4,900 crore

Tenders are for projects linked to Rs 58,000 crore Polavaram project

Centre had advised against re-tendering amid concern over increased costs

The Andhra Pradesh government has issued notifications for Rs 4,900 crore worth of tenders for projects linked to the multi-crore Polavaram irrigation scheme, despite a letter from the centre advising against it and expressing concern over increased costs and delays to the project. The notifications have been issued for a hydel project worth Rs 3,100 crore and a headworks project worth Rs 1,800 crore.

At Rs 58,000 crores, the Polavaram irrigation scheme, a mega project on the Godavari River, is one of the most expensive ever undertaken by any state. It was given national status as part of the AP Reorganisation Act, which means the project cost will be borne by the centre.

Last week, following an emergency meeting of the Union Water Resources ministry in Hyderabad, Polavaram Project Authority CEO RK Jain wrote to the Special Chief Secretary in the Andhra irrigation department, directing the government to stay re-tendering as it could lead to increased costs and delay benefits accruing to the people.

"There is neither enough ground nor any necessity for pre-closure of tenders and retendering of project works. Such a decision will plunge the project into uncertainty," Mr Jain reportedly said in his letter.

Andhra Chief Minister Jagan Reddy's YSR Congress, which swept to power in Assembly polls held in April, had earlier cancelled a contract to Navayuga Engineering Limited after an eight-member government-constituted committee submitted a report last month.

In its 43-page report, the committee declared there were problems in the tendering process for engineering, procurement and construction works, and that Navayuga had been paid Rs 3,128 crore in violation of prescribed norms.

Andhra irrigation and water resources minister Anil Kumar Yadav has claimed procedures followed by the previous government - led by Telugu Desam Party (TDP) chief N Chandrababu Naidu - were flawed since they allotted work on nomination basis.

"We will save crores of public money with this reverse tendering," he claimed, insisting that formalities would be completed by the time work begins on November 1.

The finalised costs are now expected to bring down expenditure by 14 per cent.

The centre has repeatedly opposed the Andhra government's decision to re-tender these projects. Union Jal Shakti Minister Gajendra Singh Shekawat said in parliament that the decision would further delay the project.

Chief Minister Jagan Reddy is currently in the US and is expected to return on August 24.