Andhra Pradesh high court on Thursday struck down an order of the Jagan Mohan Reddy government terminating the contract of Navayuga Engineering Company Limited for executing Rs 3,216 crore hydro-power project of Polavaram major irrigation project on Godavari river.
The bench headed by Justice D V S S Somayajulu, which heard arguments on an emergency petition filed by Navayuga Engineering on Tuesday, gave an interim order, suspending the pre-closure order issued by AP Power Generation Corporation (APGenco) on August 14 cancelling the contract of the company.
The judge also revoked the order of the government to go in for reverse tendering for the construction of the 960 MW power project. During the arguments, counsel for Navayuga argued that there was no fault on its side in executing the allotted work and the delay was mainly due to APGenco’s failure to show the site for building power project. “Though we told the government that we had already spent Rs 398 crore towards turbines, generators and other electro-mechanical works, besides advance payments to sub-contractors, the government unilaterally cancelled our contract,” he argued.
Navayuga also said the sudden pre-closure of tenders without showing any valid reason would not only cause huge financial loss to the company, but also damage its reputation across the country. As per the agreement, the company has time up to November 20, 2021 to complete the hydro power project.
Advocate General S Sriram, who argued on behalf of the government, said the government had every right to go for fresh tenders as per the contract norms. He said the mobilisation advance paid to the company from public exchequer was not utilised. “The re-tendering will bring down the cost of the project and enable more bidders to participate,” he said.
However, the court upheld the argument of Navayuga and ordered that it should be given the opportunity to continue the project works.
Telugu Desam Party president and former chief minister N Chandrababu Naidu said the court direction was like a slap on the face of the Jagan Mohan Reddy government.