AP CM Chandrababu Naidu against Polavaram contract

Hyderabad: Andhra Pradesh Chief Minister N. Chandrababu Naidu on Tuesday rescheduled his travel plan and flew down to Nagpur to meet Union water resources minister Nitin Gadkari to resolve the deadlock over replacing Transstroy (India) Limited, which is constructing the Polavaram project.

While Mr Naidu is firm on cancelling the contract with Transstroy citing repeated delays — the deadline for the project in 2019 — Mr Gadkari had said on Monday that the Centre was not ready to do so as it could lead to litigation, and possibly increase the project cost by 35 per cent.

Upset with this, Mr Naidu flew to Nagpur from Visakhapatnam to meet the minister at his residence before reaching Delhi to catch a flight to Chicago late on Tuesday night.

According to sources, Mr Naidu is not happy with the way Transstroy — which is owned by TD MP Rayapati Sambasiva Rao’s family — is executing the work at Polavaram and the government has served a showcause notice to the company asking why its contract cannot be terminated. The firm had bagged the contract during the tenure of the Kiran Kumar Reddy government in undivided AP, and Mr Sambasiva Rao was Congress MP from Guntur. He switched over to the TD and was elected to the Lok Sabha from Narasaraopet. The firm is handled by his son-in-law.

Transtroy says SSR not viable
The main contention of Transstroy is that the Standard Schedule of Rates (SSR) was not viable given the escalation of cost of material and machines.

This had led Mr Naidu to convince Transstroy to alter the contract agreement to give away 50 per cent of work to sub-contracts and was even successful in drawing a few firms. 

The pace did not pick up, and 40 lakh cubic metre work is pending which indicates that the project can’t be completed before the 2019 deadline.

At about this time, Mr Naidu reportedly contacted Megha Constructions, which had executed the Pattiseema lift scheme in record time, and asked it to take up sub-contracts. The firm told Mr Naidu that it would take up the work if fresh tenders were called and assured that it would complete the project within 18 months.

It was after this assurance that the government served the termination notice to Transstroy.

Sources said Mr Sambasiva Rao had conveyed this to the Prime Minister’s Office, and accused the state government of not revising the cost estimates and SSR, taking into account the cost escalation.

Somehow, the message reached Mr Gadkari’s Union water resources ministry that the contract with Transstroy would not be terminated.