The order came in response to a petition filed by Navayuga, who had received the contract when the Telugu Desam Party was in power in the state.

Andhra HC suspends Jagan govts cancellation of Navayuga contract in Polavaram project
news Polavaram Project Thursday, August 22, 2019 - 16:46

In a notable development in the controversy surrounding the Polavaram project, the Andhra Pradesh High Court on Thursday suspended the cancellation of the Polavaram Hydel Power Project contract with Navayuga Engineering Company Limited by the Jagan Mohan Reddy government in the state. The order came in response to a petition filed by Navayuga, who had received the contract when the Telugu Desam Party was in power in the state.

According to The Hindu, the Andhra Pradesh HC has issued an interim order suspending a previous order by the Andhra Pradesh Power Generation Corporation (APGENCO), which had cancelled the Polavaram Hydel Power Plant contract with Navayuga. Earlier in August, the Andhra Pradesh Water Resources Department had also ordered the termination of the Polavaram irrigation project contract with Navayuga. 

After winning a massive mandate in the recent Assembly elections, Chief Minister Jagan Mohan Reddy of YSRCP had constituted a Cabinet Sub-Committee to review every decision made by the Chandrababu Naidu government in the five years since the bifurcation of Andhra Pradesh. 

Alleging that major scams had taken place in projects across the state, Jagan had announced that the contracts in the Polavaram project would be cancelled, and ‘reverse tenders’ would be called for, where more bidders would be encouraged to participate and the lowest bidder would be awarded the contract. 

The YSRCP government had issued a notification only last week, 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 a 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. 

Earlier in July, the Andhra Pradesh High Court had stayed another move by the YSRCP government to renegotiate Power Purchase Agreements (PPAs) made during Naidu’s term. Renewable power companies had filed a petition in court as the move would mean lower clean energy tariffs.  

While the Union Minister for Jal Shakti had also said that cancelling Navayuga’s Polavaram contract would be detrimental to the project, YSRCP MP Vijayasai Reddy on Wednesday said that the decisions regarding Polavaram and PPAs were taken by the Andhra Pradesh government only after consultation with the Prime Minister Narendra Modi and Home Minister Amit Shah. 

Read: As Andhra asks Navayuga to exit, uncertainty prevails over Polavaram project's future

Also read: Godavari floods: Did increasing height of Polavaram's cofferdam intensify damage?

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