Andhra Pradesh: PPA to seek approval for revised estimates of Polavaram project

The Polavaram Project Authority (PPA) is preparing to send proposals to the Union Jalasakti Department seeking an investment clearance of Rs 55,656.87 crore for the revised estimated cost of the Polavaram project at 2017-18 prices. According to the Land Acquisition Act-2013, compensation for land and resettlement of displaced persons will be Rs 33,168.23 crore. The cost of reservoir, canals and power plant is estimated at Rs 22,380.63 crore. It will spend Rs 6,583.11 crore so far on land acquisition and resettlement of displaced persons and will need another Rs 26,585.12 crore.

Taking these into account, that it is impossible to complete the project at 2010–11 prices, as approved by the CWC (Central Water Board) TAC (Technical Advisory Council) for a total investment of Rs. 55,656.87 crore (estimated cost), the PPA authorities said they had decided to send proposals to the centre to provide funds to that extent. The estimated cost of the Polavaram project is Rs. 16,010.45 crore at 2010-11 prices. The Central Government enacted the new Land Acquisition Act in 2013, which has tripled the cost of land acquisition and the cost of rehabilitating displaced persons. Rase in steel, cement and fuel prices, and changes in the CWC design have increased the volume of work. With that, the CWC revised its estimated cost from Rs 16,010.45 crore to Rs 55,656.87 crore.

The revised estimated cost of the Polavaram project is Rs 55,656.87 crore, subject to the approval of the Union Ministry of Jalasakti. Before declaring the Polavaram project as a national project, the state government had spent Rs 4,730.71 crore as on April 1, 2014. The centre has promised to pay 100% of the cost of the project to the Irrigation Department after April 1, 2014 as per the AP Bifurcation Act. Since then, the state government has spent Rs 12,393.48 crore on projects. The centre has reimbursed Rs 10,741.46 crore. Another Rs 1,652.02 crore is yet to be reimbursed.

According to the latest prices, the irrigation cost of Polavaram project is of Rs 51,095.96 crore. Expenditure incurred by the State government before 1st April, 2014 and reimbursed by the Center thereafter. Excluding the total amount of Rs.15,472.17 crore, the centre will have to release another Rs.35,623.79 crore under Irrigation Department expenditure.