Andhra Pradesh Chief Minister Jagan Mohan Reddy. (File)The Andhra Pradesh Cabinet on Wednesday approved the cancellation of the Polavaram Hydel Power Project contract awarded to Navayuga Engineering Company Ltd (NECL) by the previous Telugu Desam Party (TDP) regime.
The project is centrally-funded and the Centre and the Polavaram Project Authority (PPA) had advised Chief Minister Y S Jagan Mohan Reddy not to cancel the contract given to Navayuga — worth Rs 3,216.11 crore. The state government has now called for new tenders for the projects and approved the recovery of advance amounts paid to NECL.
After NECL’s petition, the Andhra Pradesh High Court had on August 21 issued a stay order on the cancellation of the contract.
The Centre had warned that the move would lead to cost escalation and further delay the project. Last month, Union water resources minister, Gajendra Singh Shekhawat, and Polavaram Project Authority CEO R K Jain wrote to Jagan, asking him not to cancel NECL’s contract. “Such a step will result in unforeseen consequences and will plunge the project into uncertainty,” Jain wrote.
The letters were written after the government decided to terminate NECL’s contract on July 29.
