VIJAYAWADA: The approval of the Revised Cost Estimates (RCE) of the Polavaram Irrigation Project has returned to square one with the Union Finance Ministry saying only Rs 7,053.74 crore (at the 2013-14 price level) remains to be reimbursed, as against the Rs 47,724.74 crore (2017-18 price level) cleared by the Union Ministry of Jal Shakti (MoJS) and expected by the State. As the Finance Ministry asked for confirmation to construe the 2013-14 price level (PL) as the base for the RCE, the ball is back in the court of the Jal Shakti Ministry, which has asked the Polavaram Project Authority (PPA) for a decision.
After the Jal Shakti Ministry, which had forwarded the RCE for Rs 47, 724.74 crore (at 2017-18 PL) to the Finance Ministry, sent a proposal to release Rs 2,234.288 crore towards reimbursement of the expenditure made by the State, the Finance Ministry responded noting that the cost of irrigation component of the national project, as of April 1, 2014 (at 2013-14 PL) was only Rs 20,398.61 crore.
“The revised cost committee of the MoJS... has appraised the cost of the irrigation component only of PIP as on April 1, 2014 (at 2013-14 PL) at Rs 20,398.61 crore and the same has the approval of the Minster for Jal Shakti. It has also been confirmed by MoJS that an amount of Rs 4,730 crore has already been incurred on irrigation component of PIP as on April 1, 2014 (at 2013-14 PL). Therefore, the balance as on April 1, 2014 (2013-14 PL) was Rs 15,667.90 crore and the same was to be reimbursed by the government of India,” the Finance Ministry said in its communication.
As Rs 8,614.16 crore has already been reimbursed in the last six years since April 1, 2014, the day Polavaram had become a national project, a balance of Rs 7,053.74 crore remains to be reimbursed towards the irrigation component of the project, the Finance Ministry noted. As the ministry also permitted NABARD to raise Rs 2,234.288 crore towards the latest reimbursement, the State will stand to get only Rs 4,819.452 crore, according to the Finance Ministry. The technical advisory committee of MoJS, in Feb 2019, approved the RCE of Rs 55,548 crore (at 2017-18 PL). In March this year, the revised cost committee of the MoJS cleared the RCE for Rs 47, 724.74 crore (at 2017-18 PL).
The ministry had also arrived at the cost escalation at 2013-14 price level and submitted it to the finance department along with the 2017-18 price level escalation. While the official communication from the Centre maintained that it would fully reimburse the remaining cost of the irrigation component of the project at 2013-14 PL as on april 1, 2014, the State government submitted rCes at 2013-14 PL and 2017-18 PL only at the behest of MoJS, according to the officials. accordingly, the State government has been expecting that the rCe (at 2017-18 PL) would be cleared, but the process has come to square one once again.
“The rCe at 2017-18 PL was sent by the state to PPa, which approved and forwarded it to MoJS. The MoJS, after thoroughly studying it and comparing the three price levels of 2010-11, 2013-14 and 2017-18, forwarded them to the Finance Ministry. The Polavaram Project authority (PPa) is the statutory body for the project execution. We are only doing it on their behalf. PPa is governed by MoJS as the chairman of the governing body is the Secretary of MoJS. So, MoJS is the only competent authority to clear the investment. Since MoJS approved the 2017- 18 PL, the same cost is to be financed by the Centre,” sources explained.
Sources further pointed out that the Union Finance Ministry too in July, 2019, sought rCe at 2017-18 PL, in addition to the others. as the MoJS asked for the views of the Polavaram Project authority, in which the state officials are also members, the authority is likely to meet shortly to discuss the Finance Ministry’s observation. “as the PPa has already approved the rCe at 2017-18 PL, it will be unprecedented if it goes back on its own clearance and agrees for 2013-14 PL. Clarity will emerge once the authority meeting is held,” a senior official said. The State Water resources department wrote the to PPa on Friday to convene a meeting immediately to discuss the issue.
However, officials in the Water resources department said that it would be a “long” and “haggling” process. “We are only executing a national project. The project is the responsibility of the Polavaram Project authority (PPa), which is under the Union government. We will represent the same and impress upon the MoJS through PPa once again. If not, the Centre can take it over as it is a national project and complete it at the cost it deems fit,” the sources added.
CM to take stock of Polavaram developments
With the Union Finance Ministry’s letter to MoJS on Polavaram Project kicking up a storm, Chief Minister YS Jagan Mohan Reddy is scheduled to take stock of the developments on Saturday. State Water Resources Department officials are likely to apprise the CM on what the State government’s approach should be to get the necessary funding as it aims to complete the project by December, 2021. The meeting is scheduled to be held on Saturday afternoon.