Andhra Pradesh chief minister YS Jagan Mohan Reddy alleged that major scams had taken place in the projects across the state by the previous Chandrababu Naidu-led Telugu Desam Party (TDP) government and announced that Navayuga contract would be cancelled and the state government would reverse tenders.
Amaravati: The Andhra Pradesh government on Thursday (August 1) served a pre-closure notice to an engineering company and asked it to exit from the execution of the Polavaram headworks, a significant development that could impact the project's progress.
The notice comes against the backdrop of allegations of financial irregularities in the Polavaram project by the previous Chandrababu Naidu government.
The Water Resources Department served the notice to the Navayuga Engineering Company under Section 89(3) on the recommendation of an expert committee, according to sources.
The high-level body was constituted by the YS Jagan Mohan Reddy government to probe alleged irregularities in various infrastructure projects.
The state government is said to have offered Navayuga to compensate the loss, if any, through mutual consent for exiting the project, sources in the department said.
Navayuga was awarded over Rs 3,000 crore Polavaram works on a nomination basis in February 2018 after the previous Telugu Desam Party (TDP) dispensation questioned the pace of the project being carried out by the original contractor, Transtroy.
The Centre had subsequently approved the arrangement. In the case of Navayuga too, it has to ratify the state government's decision to remove the contractor since it is a national project, the sources said.
The Polavaram project is expected to irrigate 2.91 lakh hectares, generate 960 MW (Megawatts) of power and fulfil the water needs of industries and 540 villages in Andhra Pradesh.
While campaigning in the state for the recent Lok Sabha election, Prime Minister Narendra Modi had alleged that the TDP was using Polavaram like an "ATM" to draw money from the Centre and was responsible for delays in the project.
However, TDP chief Chandrababu Naidu had hit back, claiming that the Centre was yet to reimburse Rs 4,500 crore that the state government had spent in spite of the financial crisis.
Last Updated 10:08 AM IST