Naidu looks up to Centre for funding cost overrun

New Delhi: AP Chief Minister, N Chandrababu Naidu, here on Tuesday dropped a bombshell that his government was at the mercy of the Centre’s munificence completely for the funding of the Polavaram project because of cost escalation. He said the state government was asked to execute the project by the Centre as per the recommendations of the NITI Aayog vice chairman and hinted that without Centre's help, completion of the project was doubtful.

It may be recalled that the Opposition leaders have been alleging that Naidu might ultimately burden the people with the cost since some time.

Talking to the media after his meetings with the Union Minister for Water Resources, Nitin Gadkari and the Union Finance Minister, Arun Jaitley, a disturbed Naidu said cost of the project had overshot to Rs 58,319.06 crore including the component of the Power House.

The latter was estimated to be Rs 2,868.40 crore in 2010-11 that rose to Rs 58,319.06 crore in 2013-14. As it was to be borne by the State Government, the rest of the project cost at 2013-14 price level was more than Rs 54,100 crore or so. He was primarily in Delhi to explain the same to the Centre and convince the latter to cough up the funds. He said he explained to the Centre that land acquisition and Relief and Rehabilitation itself was pegged at Rs 33,858.45 crore in 2013-14 and its earlier estimate was Rs 2,934.42 crores.

The hike was due to implementation of the 2013 recommendations on R & R measures which was the primary cause of cost escalation.

Similarly the head works cost shot up to Rs 11,637.98 crore from Rs 6,600.56 crore that of Right Main Canal from Rs 3, 656.14 crore from Rs 2,135.08 crore and of Left Canal to Rs 4,960.83 crore from Rs 1,471.99 crore.

Naidu went on defending his estimates and the expenditure urging the Centre to come to his rescue by realising the valid reasons for the cost escalation. He said he had invited Nitin Gadkari to visit the project site during his AP visit and for a first-hand appraisal of the costs involved in completing the project.

He said the Government had divested the main contractor Transtoy of much of the work due to delays and was trying to get the project completed on time. It needed the Centre to fulfil its promise made in the AP Reorganisation Act.

Naidu said the Centre had sought the revised estimates at price level as on April 1 of 2014 and the same was submitted to the Central Water Commission on August 16 of 2017. And hence it was up to the Centre to keep its promise.

Naidu said the Centre said it would provide 100 per cent of the remaining cost of the irrigation component only of the project for the period starting from April 1,2014 to the extent of the cost of the Irrigation component on the date. No Central funding would be provided (beyond that already released) for costs incurred before April 1, 2014.

Cost escalation beyond the cost as on the date due to change in scope or price would not be funded by the Centre, the State was informed, he said.

However, the Union Cabinet had given its approval for the special assistance measure for AP by way of special dispensation in funding of EAPs (Externally Aided Projects) and funding of irrigation component of the project, hence he hoped that this would be done and that the entire cost would be borne by the Centre.