How Chandrababu Used AP Cabinet To Approve Polavaram's Inflated Costs To Benefit TDP Cronies

Chandrababu Naidu role in Polvaram Project Scam - Sakshi Post

“Chandrababu Naidu (former CM) is using Polavaram Project as an ATM. In the name of the project he is drawing money whenever needed…” (Prime Minister Narendra Modi at Rajahmundry public meeting)

These were the exact words of PM Narendra Modi who made this statement during the 2019 election campaign. Though the statement was political, it is in reality a fact and there are government records that prove his accusations were true. 

N Chandrababu Naidu increased the cost of the Polavaram project to Rs 3,000 crore, and opened a Pandora’s box. He took corruption to an unprecedented level by handing over all the project construction work directly to his cronies in a nomination manner with the approval of the Cabinet.

In the name of Polavaram, he diverted project works to his loyalists and reportedly gained huge personal benefits too. The decision taken by the then state cabinet in October 2015 will prove these accusations. Babu claimed that contractors were unable 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 own people. This clearly shows that allegations made by the Prime Minister are absolutely correct.

Irrigation Department danced to the tunes of Babu

Chandrababu Naidu used Cabinet meetings for his self-benefits and his personal agenda was to pass decisions with respect to the Polavaram Project.  The cabinet meeting held on October 10, 2015 approved the proposal submitted by the Department of Irrigation. On the instructions of Chandrababu, the officials drafted a proposal, got it approved by the AP cabinet and handed over the project construction works to Babu’s men. The Polavaram Project construction work went on for all of Babu’s five year tenure as Chief Minister while his preferred engineering companies did nothing but empty the state’s 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 Desam Party (TDP) men. 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 emptied ... but no progress in project work

No major work was done on the project. But the government was a burden to the treasury. Profitable works were completed in advance to make quick bucks. If we look at the whole controversy in this regard, it is clear how shamelessly Chandrababu Naidu used this project. 

According to the report submitted to cabinet on October 10, 2015 by the Irrigation Department, everything went according to the wishes of Chandrababu Naidu. 

A summary report was submitted by the Irrigation Department (Project-1) entitled "Draft Memorandum for the Council of Ministers". One look at it and it is clear how the project was used for selfish purposes and then put away 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 from the Central Government Planning Commission and environment 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 Centre (which was then in the NDA and had a share in the Union Cabinet) and agreed to build the state if the Centre 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. Lack of machinery and funds meant no progress in the project.

• Therefore the Irrigation Department suggested that the contracting firm should be strengthened in all respects. It is clear that Chandrababu's intention behind doing this was to benefit his loyal contractors.

• Estimated expenditure on assignments during 2005-07 is 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 June 30 and September 30 2015. But the committee took decisions and submitted them to the government as Chandrababu Naidu wanted. It identified reasons for work being delayed and made recommendations on what to do to deal with the situation.

Based on this, the Irrigation Department suggested two alternatives to the cabinet. 

Option 1:

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 the Central Government must be obtained.

Option 2:

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. (With the approval of this proposal by the Cabinet, all the companies related to Chandrababu, whether they had experience or not, entered into the project and used the government like ATMs)

The Cabinet note made it clear that no problems would arise from the PPA under central control if this was done. In the Cabinet meet, it was decided that the construction work would be expedited by allowing 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 the 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) questioned the state government six times to reveal the estimated cost of the Polavaram project as per revised estimates. But Chandrababu chose to keep mum and look the other way? 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 remain silent when the Centre made it clear that it would give only Rs 20,398 crore to the Polavaram project? It is apparent that Chandrababu had traded the interests of the state for his own personal gains.

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