Amaravati: After an expert panel report confirmed irregularities and unusual time delay in Polavaram National Irrigation Project, the Andhra Pradesh government served a pre-closure notice to an engineering company on Thursday.
The notice asked Navayuga Engineering Company Limited to exit from the execution of the Polavaram head works, a major development that could impact the project's progress. The notice comes against the backdrop of allegations of financial irregularities in the Polavaram project by the previous Chandrababu Naidu government.
The Water Resources Department served the notice to the Navayuga Engineering Company under Section 89(3) on the recommendation of a report filed by an expert committee, according to sources. As per the Report, irregularities worth Rs 3,797 crore have been found.
The high-level body was constituted by the YS Jagan Mohan Reddy government to probe alleged irregularities in various infrastructure projects. Government now plans to conduct fresh bidding and award the contract to the company which quotes the lowest price. Polavaram Project works will resume from 1st November, 2019.
The state government is said to have offered Navayuga a compensation for the loss, if any, through mutual consent for exiting the project, sources in the department said.
Navayuga was awarded the over Rs 3,000-crore Polavaram works on a nomination basis in February last year after the previous Telugu Desam Party dispensation questioned the pace of the project being carried out by the original contractor, Transtroy.
The Centre had subsequently approved the arrangement. In the case of Navayuga too, it has to ratify the state government's decision to remove the contractor since it is a national project, the sources said.
The Polavaram project is expected to irrigate 2.91 lakh hectares, generate 960 MW of power and fulfil the water needs of industries and 540 villages in Andhra Pradesh.
During campaigning in the state for the Lok Sabha election, Prime Minister Narendra Modi had alleged that the TDP was using Polavaram like an "ATM" to draw money from the Centre and was responsible for delays in the project.
Jagan Govt Given Pre-Closure Notices to Polavaram Project Agency to Withdraw the Contract.
Naidu had hit back, saying the Centre was yet to reimburse Rs 4,500 crore the state government had spent in spite of the financial crisis.
(With inputs from PTI)
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