Vijayawada: In a major decision, the AP government on Thursday issued termination notice to Polavaram project contractor Navayuga Engineering Company Ltd (NECL). The state government will now fresh tenders for the Polavaram works.

This is the second change of contractor for the project. The Chandrababu Naidu government had terminated the contract of Transtroy Company and entrusted the work to NECL for which the Centre had given concurrence in January last year.




After Chief Minister Y.S. Jagan Mohan Reddy took over, his government, alleging irregularities in awarding contractes in the Polvaram project, constituted an expert committee to study the issue.

After the committee submitted its report, the government decided to pre-close the NECL contract.

“During the meetings conducted by the expert committee, it was opined that the entrustment of part works deleted from the original engineering procurement construction (EPC) agency to NECL on nomination basis by converting EPC contract to lump sum (LS) contract is not appropriate,” said the termination notice sent by the Polavaram chief engineer to NECL.

The committee was against relaxing the agreement clauses for NECL for procurement of diesel through the special revolving fund and procurement of steel and cement through direct payments to the suppliers.

For the several months in 2017, work on the Polavaram project had come to a standstill, causing tension between the government and the contractor Transtroy. At that point, Navayuga Engin-eering Company Ltd agreed to take up the work at the old contractual rates.