Rs 333 crore only for Polavaram Irrigation Project cost reimbursement against Rs 1,600 crore due

VIJAYAWADA: In what could be an impediment to the execution of Polavaram Irrigation Project (PIP), the Polavaram Project Authority (PPA) is learnt to have recommended the release of only Rs 333 crore for reimbursement out of the pending Rs 1,650 crore sought by the State Water Resources Department. As the revised cost estimates (RCE) of the project at 2017-18 price level (PL) are yet to be cleared by the Centre, the PPA is said to have processed the bills as per 2013-14 PL.

While the State government and the contracting agencies have been working round-the-clock to complete major civil works before the flooding season, officials said the reimbursement of funds has become a cause for concern as delay in cash flow will hit the project execution. 

“The PPA recommended clearance of bills only to the tune of Rs 333 crore based on 2013-14 PL components. In the bills we forwarded, it stated that certain components exceeded the provisions of the project cost at 2013-14 PL and the remaining could be processed only after the approval of RCE at 2017-18 PL,” an official told TNIE. 

Till January 2021, the State government has spent Rs 17,122.89 crore on the project and of which Rs 12,392.18 crore has been spent after PIP was declared a national project on April 1, 2014. Of the total Rs 12,392.18 crore, Rs 10,741.46 crore has been reimbursed by the Centre through PPA. Out of the balance amount, the officials said the PPA recommended only a small part of it. It may be recalled that the PPA had also rejected bills to the tune of Rs 760 crore in the past citing ineligibility.

The approval of RCE is still pending with the Centre even though the PPA and the Central Water Commission (CWC) clearly informed that 2017-18 PL was essential for the project completion. Although the Ministry of Finance, in October 2020, restricted the cost of the project at 2013-14 PL citing a Union Cabinet resolution in 2017, the PPA had informed the Ministry of Jal Shakti (MoJS) in November 2020 that 2017-18 PL was needed to complete it. According to officials, the MoJS after getting investment clearance, is likely to forward the RCE to the Union Cabinet for approval.

Though the State officials have been pushing for the clearance of RCE, the file is yet to get green signal and still pending with the MoJS.With ‘inadequate’ funds, the cash-strapped State will be left with no option but to mobilise funds by itself or get the works executed by the agencies with delayed release of payments, another official said. “Funds are critical to complete the project, especially rehabilitation and resettlement, on time. We have to relocate about 17,000 families before the next floods. That can be done only if the rehabilitation and resettlement colonies are ready. Only after the rehabilitation, we can complete cofferdam works,” the official explained. However, the water resources officials exuded confidence that the schedule of execution of headworks would not be hampered as there is still at least two-three months’ time.

Polavaram project cost

Rs 17,122.89 crore
Sum spent by State till January 2021

Rs 12, 392.18 crore 
Spent after PIP was declared a national project

Rs 10,741.46 cr  Amount reimbursed by the Centre through PPA