“Chandrababu Naidu (former CM) is using Polavaram Project as an ATM. In the name of project he is drawing money whenever needed…” (Prime Minister Narendra Modi in Rajahmundry public meeting)
PM Narendra Modi made this statement during 2019 election campaign, though this was political but it was fact. Government records are proving his accusations.
Chandrababu Naidu increased the cost of the project to Rs 3,000 crore, and opened the Pandora box to the unprecedented corruption by handing over all the project construction work directly to his near & dear in a nomination manner with the approval of the Cabinet.
In the name of Polavaram he diverted project works to his loyalties and reportedly made huge personal benefits for himself. The decision taken by the then state cabinet in October 2015 will prove these accusations. He made allegations that the contractor was not able to do the work properly due to financial constraints as well as lack of engineering power capabilities and decided to cancel the old contractor and hand over the project construction works to his loyalties. This clearly shows that allegations made by the Prime Minister today are absolutely correct.
Irrigation Department danced to the tunes of Babu
Chandrababu Naidu used Cabinet meeting for his self benefits and personal agenda made decisions in Polavaram Project. The Cabinet meeting on October 10th, 2015 approved the proposal submitted by the Department of Irrigation. On the instructions of Chandrababu, the officials drafted the proposal, approved it in the cabinet and handed over the project construction works to his loyalties. After getting Polavaram Project construction works in his five year tenure as Chief Minister and his loyalty engineering companies did nothing else but emptied treasury. With the consent of the Cabinet approved resolution by Chandrababu Naidu on October 13, 2015, the work was handed over directly to the contractors belonging to the Telugu Desham Party (TDP) loyalists. The decision taken by Chandrababu in the cabinet contributed to the entry of TDP companies and contractors into the company which was already working.
Treasury is empty … but project work not move forward
No major work was done on the project. But the government was a burden to the treasury. Profitable works were completed in advance and made money. If we look at the whole controversy in this regard, it is clear how Chandrababu Naidu used this project.
According to the report submitted to Cabinet on October 10, 2015 by Irrigation Department everything went according to the wishes of Chandrababu Naidu.
This summary report was submitted by Irrigation Department (Project-1) entitled “Draft Memorandum for the Council of Ministers”. We can understand how the project was robbed for selfish purposes and immersed without doing anything.
Work on the Polavaram project started in 1980s
• In 2004-05 Polavaram Irrigation Project (PIP) was prepared and it was divided into three main works namely Headwork, Right Main Canal and Left Main Canal. The left canal was handed over in 8 packages, the right canal in 7 packages and the head works in 8 packages between 2005 and 2007.
• All approvals were obtained of the Central Government Planning Commission and environmental in this regard.
• The Central Government is required to construct the project as per Section 90, 2014 Bifurcation Act as the time of state bifurcation in 2014.
• Reviewed the progress of this project in 2014. While the Central Government was supposed to build it, the then Chief Minister Chandrababu Naidu put pressure on the Center (which was then in the NDA and had a share in Union Cabinet) and agreed to build the state if the Center would fund the project. This gave him the opportunity to give things to those he liked.
• When reviewed in 2014 it was found that the estimated cost of the project had increased. Things were not going fast. The government is unable to build as expected due to lack of machinery and lack of funds for the construction company.
• Therefore Irrigation Department suggested that the contracting firm should be strengthened in all respects. It is clear that Chandrababu’s intention behind doing this is to benefit his loyal contractors..
• Estimated expenditure on assignments during 2005-07 is estimated at Rs. 10151 crores. Special tender should be called for works related to hydropower plant. In 2010, it was decided to cancel two of the eight works on the reservoir, namely Spillway and Earth Come Rack Fill Dam, from the contractor and call for tenders again. By then it was decided that the cost would be Rs 16,000 crore as per 2010-11 prices.
• The two packages were merged in 2011-12 and handed over to Trans Troy Company in 2013 as a tender. This work should be completed within five years. But the company did not do as expected.
• Trans Troy was only partially able to move the machinery to the project and do some work. The Irrigation Department said in the report that Trans Troy was unable to move the machinery which was needed to speed up the work.
• The report also mentions major obstacles which include unavailability of land required for work at the project, lack of coordination between various government departments, and inability of the contractor to carry out work to move power lines in the construction area.
• This situation was discussed in the Expert Committee of the Irrigation Department held on 30th June and 30th September 2015. But the committee took decisions and submitted them to the government as Chandrababu Naidu wanted. Identifying reasons for work being delayed and made recommendations on what to do to deal with the situation.
Based on this, the Irrigation Department has submitted two alternatives to the Cabinet.
The existing contractor should be removed and the work should be handed over to the new ones on a tender basis, which can lead to technical legal issues and the risk of stalling. The inter-state conflict is intensifying and also permits from Central Government must be obtained.
Accordingly, the present (then) contractor should increase the prices and continue the work. The estimated cost should be increased according to 2015 prices. It is a must.
2015-16 prices must be met to complete the remaining work on the project. The cost of the duping yard to the contractor will increase significantly. This must be borne by the government. New proposals need to be amended for works such as Diaphragm Wall Construction, Hydraulic Heist etc.
The issue of price increase should be relaxed in the previous agreement with the contractor. At the same time, the price difference should apply to all types of labour, cement, steel, structural steel, fuel, etc. Increased prices for machinery are not included. The contractor will have to pay according to the increased prices. The government should also bear the difference in comparative prices mentioned as other material. For this, the year 2015-16 should be considered as the base year.
Diaphragm Wall works should be outsourced to specialized engineering firms with technical, financial and experience to complete the project on time. Rather than hiring such a company as a subcontractor, the work should be outsourced directly to a partner in a company that works directly. For this, the provisions of the agreement have to be amended and a supplementary agreement has to be made.
The Cabinet note made it clear that no problems would arise from the PPA under central control if this was done.
In Cabinet it was decided that the construction work would get speed up by allowing the subcontractors directly with the main contractor (enable on board of the subcontractors). This allows for a team spirit between the contracting companies and the decision-making process to discuss technical issues directly with governments and authorities. In Cabinet it was decided to pay the bills directly to the sub-contractors to speed up the construction work so that it would be easier to do the works as per the target.
The Cabinet approved the payment as per the increased prices. On March 2, 2013, Chandrababu’s cabinet approved amending the contract to hand over the work directly to subcontractors and decided to pay bills directly by state government to the subcontractors.
On September 7, 2016, at the time of midnight Chandrababu agreed to the special assistance announced by the Center to the state. In the memorandum issued by the Union Finance Ministry on September 30, 2016 regarding its implementation, it was clarified that only the expenditure incurred by the Irrigation Department would be given as per the prices dated April 1, 2014. The Central Cabinet passed a resolution on the same subject on March 15, 2017.
Referring to the Cabinet resolution, the Union Finance Ministry recently said that the Irrigation Department had estimated the cost of the project at Rs 20,398.61 crore at 2013-14 prices and would reimburse Rs 2,234.77 crore if approved.
Why so much delay?
The Polavaram Project Authority (PPA) has six times asked the state government to state the estimated cost of the Polavaram project as per revised estimates. But why was Chandrababu not answering? Is it true that Chandrababu, who read half of the resolution passed by the Union Cabinet on March 15, 2017, announced in the assembly that the Polavaram project would be completed soon? In the Legislative Council, the then MLC Chandrasekhara Rao said that the project would cost Rs 40,000 crore. Why did Chandrababu remained silent when the Center made it clear that it would give only Rs 20,398 crore to the Polavaram project? Chandrababu had traded the interests of the state for his own favour.