Delay to push up Polavaram cost to Rs. 21, 510 crore

The cost of the multi-purpose Polavaram mega project is in for a big revision again, thanks to the inordinate delay in grounding its head works following controversies on two occasions over tenders’ finalisation.

Its original cost of Rs. 10,151 crore in 2005 was enhanced to Rs. 16,010 crore ( Rs. 5,859 crore hike) after five years in 2010 to absorb inflation impact.

This reflected in an increase of Rs. 1,175 crore per year. The yearly cost escalation, however, tumbled to about Rs. 1,000 crore for 2011 and 2012 as project works relating to canals and rehabilitation and resettlement of the displaced, all worth Rs. 4,500 crore, were completed by then. A fresh reckoning by the Irrigation Department indicated that the project’s cost will reach or even cross Rs. 21,510 crore by 2017, the deadline set to complete it.

The escalation, expected to taper off gradually following a progressive completion of works, is put at Rs. 800 crore for 2013; Rs. 700 core for 2014, Rs. 600 crore for 2015; Rs. 500 crore for 2016 and; Rs. 400 crore for 2017. The work on the dam, which came to grinding halt following scrapping of the previous tenders on August 28, 2009 by the then Chief Minister Y. S. Rajasekhara Reddy with the complaint that the contractors (Madhucon and others) were delaying works due to lack of coordination among them, is not likely to be resumed at least in the near feature.

The tenders were pre-closed to engage single agency to overcome the coordination problem. Nevertheless, the tender of SEW consortium, which was short-listed under the bidding later, was also scrapped on February 23, 2012 following a controversy. The short-listing of the bid submitted by Soma-CGGC under the fresh tendering trigged off a more serious controversy with even Ministers like D. Nagender coming out with the charge that the consortium indulged in tax fraud in Sudan, furnished insolvency certificate from a Chinese bank and was blacklisted in Sudan.

It will be months and months before the works are resumed after resolving all these issues. Any further procrastination, however, is bound to cause a colossal loss to all the regions of the State alike. Not only the works completed so far worth Rs 4,500 crore, but also two giant lift schemes of Tadipudi and Pushkaram already constructed as part of Polavaram (cost Rs 784 croe) will remain as non-performing assets. The delay has deprived the State of a 960-MW hydel station planned as part of the dam. The Godavari is so bountiful that 3,000 tmcft of water is going into the sea untapped from it.

This hydel station would have offered relief to people from power cuts. Using the channel which is partially excavated, over 200 tmcft of Godavari water can be diverted into the Krishna at Vijayawada to serve the Krishna delta and not merely 80 tmcft as envisaged. The water in Nagarjunasagar-Srisailam system meant for the delta, will thus be saved and used for the projects in Telangana and Rayalaseema like Kalwakurthy and Hundri-Neeva. When late T. Aniah, laid the stone for Polavaram in 1980, he never had any vision of this benefit to Telangana.