india

Updated: Aug 17, 2019 19:31 IST

In what appears to be a direct confrontation with the Centre, the Andhra Pradesh government on Saturday issued a notification calling for fresh tenders worth Rs 4,900 crore for the completion of the Polavaram project on Godavari River, ignoring the objections raised by the Union ministry of water resources.

“We have uploaded the notification on the tender digest website of the state irrigation department. The details, however, will appear on Monday morning on the e-procurement website as there is a two-day time lag due to security verifications etc,” special chief secretary (irrigation) Adityanath Das said.

The fresh tenders have been called for the completion of the balance work on project heads including spillway, spill channel, earth-cum-rock-fill dam, coffer dams etc, besides for the construction of the Polavaram hydel power station of 960 MW capacity.

The initial benchmark for the total cost of work has been put at Rs 4,900 crore, including Rs 1,800 crore for project head work and Rs 3,100 crore for the power project.

“The department will follow the reverse tendering process for the first time, throwing the tenders for open bidding. Whoever quotes the lowest bid will be awarded the contract,” an official familiar with the development said.

The notification comes a day after the Polavaram Project Authority (PPA), a unit of the Union Ministry of Water Resources which oversees the progress of project work, wrote a strongly-worded letter to the state government raising objections over the termination of the earlier contractor (Navayuga Engineering Company Limited) and calling for fresh tenders.

On Friday, PPA chief executive officer R K Jain wrote a strongly worded letter to Adityanath Das expressing concern over the Jagan government’s decision to go in for “reverse tendering” of the balance work on the Polavaram project.

“There is neither enough ground nor any necessity for pre-closure of tenders and re-tendering of project work. Such a step will result in unforeseen consequences and will plunge the project into uncertainty,” Jain said.

He warned that the project was not only likely to get delayed, but also would have an adverse socio-economic impact, apart from the likely increase in the cost of the project.

Jain advised the state government to abandon the idea of pre-closure and re-tendering of the work in the best interest of the project or at the least, keep the same in abeyance till a considered view is taken by the Government of India in the matter.

On July 29, the Jagan government issued “pre-closure” notice to Navayuga stating that its contract was terminated, following a recommendation made by an eight-member expert committee. The committee pointed out gross violation of tender norms under Engineering, Procurement and Construction (EPC) contracts in Polavaram and that the previous Telugu Desam government had paid Rs 3,128 crore to Navayuga in violation of the norms.

However, the Centre objected to Jagan’s decision. On August 13, the PPA held an emergency meeting in Hyderabad to review the pre-closure of the project tenders. The meeting observed that the decision to call for fresh tenders would result in delay of the project and with an increase in the timeline, there is a likelihood of an increase in the project cost as well and also losses due to delayed benefits of the project.

“The state government officials have been advised to look into the matter before taking a final decision,” the PPA authorities said.

However, setting aside the objections, the state government issued the tender notification.