The Andhra Pradesh Cabinet, which met in Amaravati on Wednesday, approved the cancellation of the Rs 3,216.11-crore contract given to Navayuga Engineering Company by the previous Telugu Desam Party Government for construction of the Polavaram hydel power project.

Fresh tenders would be called through the reverse tendering process. However, the issue is sub-judice, as Navayuga Company has moved the Andhra Pradesh High Court and obtained a stay order. The mobilisation advance given to the company would also be recovered.

The State Cabinet has also approved the cancellation of a contract given to Machilipatnam Port Pvt Ltd as also the decision to take back 412.5 acres of land given to the company in the vicinity of the port town, which is the headquarters of Krishna district. The company had not started work on the project and was not paying rent either, it was stated.

Further, the Cabinet also approved the decisions to hike the salary of ASHA (community health) workers from Rs 3,000 per month to Rs 10,000 per month. The decision to extend the ban on Maoist extremists by one more year was also approved.