In a major setback to the Jaganmohan Reddy government in Andhra Pradesh, the High court in an interim order has suspended the order that was issued by AP GENCO cancelling the contract of Navayuga Engineering Company limited (NECL) to construct the Polavaram Hydel Power plant.
Last week, the Andhra Pradesh government alleging irregularities in the manner in which Navayuga bagged the contract on nomination basis, issued a pre-closure order and initiated reverse tendering for the construction of the project for works worth Rs 4900 crore. The CM believes Rs 3600 crore was misused in the project. This Monday, NECL went to court, arguing that the government’s decision was unfair and unilateral as the company was meeting all the required deadlines.
The Jagan government has maintained both inside and outside court that the re-tendering process would bring down the cost of the project besides ensuring more bidders could compete. But the court clearly was not in agreement and therefore, besides terminating the government’s order, it also asked it to put on hold its reverse tendering process.
The court decision validates the points raised by RK Jain, CEO of the Polavaram Project Authority. Jain had shot off a letter to the Andhra Pradesh Irrigation secretary expressing satisfaction over the work undertaken by Navayuga on Polavaram, which is a national project executed by the state government.
“There is neither enough ground nor any necessity for pre-closure of tenders and re-tendering of project works. Such a decision will plunge the project into uncertainty,” Jain wrote in the letter. He also suggested that the entire process be stopped or kept in abeyance till the Centre took a decision. In short, the PPA did not want Jagan to order reverse tenders. Despite the SOS, the Jagan regime went ahead with its notification.
The Centre had expressed its displeasure over the decision publicly. Jal Shakti minister Gajendra Shekhawat had said in Parliament that the reverse tendering will increase the cost and delay the project.
The legal order has come as a shot in the arm for Chandrababu Naidu. The former chief minister said that Jagan was trying to prove corruption which did not take place. In a pointer to how bitter the relationship between Naidu and Jagan is, the TDP chief predicted that the chief minister’s “madness” will become a curse for the entire public of Andhra Pradesh.
“The reverse tendering will hurt investor sentiment and that will have a negative impact on the growth of the industry,” he said in Guntur.