As expected, the decision of the YSR Congress party government to terminate the contract of Navayuga Engineering for construction of Polavaram major irrigation project and its associated hydro-power project and go in for reverse tendering process had to face a legal challenge.
The Andhra Pradesh high court on Tuesday heard arguments on the petition filed by Navayuga challenging the Jagan government’s decision.
After hearing the arguments from the lawyers of both the company and the government, the judge reserved his verdict.
Navayuga Engineering director Y Ramesh, who filed the petition, argued that the government’s decision to terminate his company’s contract was against the principles of natural justice.
The advocate on behalf of the company said there were no violations in obtaining the contract from the government.
The delay in construction of hydro power plant was only because of the handing over the project site.
“Moreover, the government has nothing to do with the power plant, which is being executed for AP Genco,” he said.
Navayuga claimed that it had already spent Rs 398 crore towards procurement of turbines, generators and other electro-mechanical works and payments of advance amounts to sub-contractors.
"But, the government unilaterally cancelled our contract,” the company argued.
However, the government counsel argued that the government had every right to cancel the contract, as per the norms.
He said Navayuga could go for arbitration instead of moving the high court. He appealed to the court to grant permission to go ahead with fresh tenders for Polavaram.
The Jagan government on Saturday called for fresh tenders worth Rs 4970 crore for the completion of balance work on project head including spillway, spill channel, earth-cum-rock-fill dam, coffer dams etc, besides for the construction of Polavaram hydel power station of 960 MW capacity.