india

Updated: Oct 31, 2019 19:25 IST

Andhra Pradesh High Court on Thursday gave a green signal to the state government to begin construction on Polavaram irrigation project and its associated hydro-power project on the Godavari River in the state’s West Godavari district.

The high court dismissed a petition filed by Navayuga Engineering Company Limited challenging the decision of YSR Congress party government headed by YS Jagan Mohan Reddy to terminate its contract for the construction of the hydro-power project.

The infrastructure major Navayuga had bagged the contract in 2017 when N Chandrababu Naidu of the Telugu Desam Party (TDP) was the chief minister.

The court also vacated the stay it had ordered on the project works, agreeing with the contention of state advocate general S Sriram that the writ petition filed by Navayuga was not tenable as it had already approached the arbitration court to settle the issue.

As the arbitration process had already been going on, the petition cannot be entertained by the high court, the advocate general had argued.

The high court also set aside the injunction granted by the lower court preventing the state government from encashing the bank guarantees given by Navayuga for not commencing the project on time.

It directed the lower court to hear the arguments of both the parties and review its judgement.

Though the Navayuga did not challenge the termination of the contract for the irrigation component of the project, the works on the entire project had been stalled as the Jagan government called for common tenders for both irrigation and power projects on August 17.

The total value of the contract was estimated at Rs 4987 crore including Rs 1830 for project headworks and Rs 3157 for the 960 megawatts hydropower project.

The state government had conducted reverse tendering for the project works on September 23 and awarded the contract to Megha Engineering and Infrastructure Limited (MEIL).

MEIL was the only company to participate in the bidding by offering to take up the project at a cost of Rs 4359.11 crore, which was lesser by Rs 628.43 crore or 12.6%.

A senior official in the irrigation department familiar with the development said now that the high court has dismissed Navayuga’s petition, the hurdles for the commencement of Polavaram project works by MEIL have been removed.

Navayuga officials could not be reached for the comment.