The Andhra Pradesh cabinet on Wednesday approved the cancellation of the Rs 3,216.11 crore Polavaram hydel power project contract, calling for new tenders in the reverse tendering process. The cabinet also approved the decision to recover the advance amounts given to the contractor.

Earlier in August, the Andhra Pradesh Water Resources Department had also ordered the termination of the Polavaram irrigation project contract with Navayuga.  Both the contracts were awarded by the TDP government. 

On August 22, the Andhra Pradesh High Court had suspended the cancellation of Navayuga's Hydel Power Project contract. The order came in response to a petition filed by Navayuga.

The YSRCP government had issued a notification on August 17, for reverse tendering in the project, for works estimated to cost Rs 4,900 crore. This included headworks worth Rs 1,800 crore and the hydel project worth Rs 3,100 crore. The decision was taken despite the advice of Polavaram Project Authority (PPA) warning against it. Several observers and activists had also noted that despite existing flaws in the project, reverse tendering may not be a wise move.

The Centre is funding the Rs 58,000 crore Polavaram project, which is being built across the Godavari river. It was declared a national project under the Andhra Pradesh Reorganisation Act, 2014.

The Jagan cabinet on Wednesday also withdrew the approval of 412.5 acres of land allotted to Machilipatnam Port Private Limited (MPPL), citing that the company had neither started the work nor paid the rent for the land given. Navayuga is the lead promoter in MPPL. In February, the then Chief Minister N. Chandrababu Naidu had laid the foundation stone for the deep sea port to be constructed at an estimated cost of Rs 12,000 crore.

The cabinet also approved the extension of the ban on Maoists for another year, besides approving the increase of salaries of ASHA workers from Rs 3,000 to Rs 10,000.

IANS inputs