Chief Minister Y.S. Jagan Mohan Reddy has written a letter to Prime Minister Narendra Modi requesting him to prevail on the Ministries of Finance and Jal Shakti to give investment clearance for the 2nd Revised Cost Estimate (RCE) of the Polavaram project as recommended by the Polavaram Project Authority (PPA), the Central Water Commission and the technical advisory and revised cost committees, at the earliest to facilitate its completion by December 2021.
Mr. Jagan Mohan Reddy stated that a further delay would result in further cost escalation, thereby harming the national interests, it being a national project. He pointed out that the cost of Land Acquisition (LA) and Relief & Rehabilitation package together accounted for ₹28,192 crore out of the RCE of ₹47,726 crore. The revised cost at 2017-18 price level stood at roughly ₹55,657 crore.
Capping the expenditure at approximately ₹20,400 crore at the 2013-14 price level was unrealistic and it would be against the earlier commitments of the Central government and the guidelines for national projects and in violation of the relevant provisions of the AP Reorganisation Act, 2014 (APRA) enacted by Parliament.
If the Centre limited the expenditure to ₹20,400 crore, it would not be possible to meet the total cost of civil works, LA and R&R. In such a case, the project could not be completed as targeted.
Balance due
The Chief Minister further said the Government of Andhra Pradesh had already incurred an expenditure of ₹12,521 crore after bifurcation, including LA and R&R. Of that amount, ₹8,508 crore was reimbursed by the Central government and the balance was to be paid while the bills for the works done had been pending since December 2018.
Mr. Jagan Mohan Reddy said the cost revision was necessitated by time overrun, inflation, introduction of new taxes (GST) and some Acts and rules, the ground situation which dictated the design, alignment etc. and various unforeseen factors. “The State government is only an executing agency on behalf of the Government of India (GoI) and the overall responsibility of completing the project lies on the GoI as per the APRA,” Mr. Jagan Mohan Reddy said.
