Polavaram dam: high court pulls up Andhra government for giving contract hurriedly

Government directed to submit all documents on the basis of which decision was taken

By M Suchitra
Published: Wednesday 06 March 2013

Award of tender for the controversial Rs 16,010 crore Indira Sagar Polavaram mega irrigation project has once again become cause of deep embarrassment for the Congress-led government in Andhra Pradesh. On March 4, the Andhra Pradesh High Court slammed the state government for giving a multi-crore construction contract to the joint venture led by Transstroy (India) Limited, a Hyderabad-based infrastructure and construction company.

It was on March 2 that the state government entered into an agreement with Transstroy–USC ES UES (Russia) business consortium. The agreement was signed hurriedly in the midnight after a high-power committee on major irrigation projects led by the state’s chief secretary recommended this joint venture for the contract.

The court was considering an urgent petition moved by Soma-CGGC, one of the six bidders who participated in the bidding process that took place in November last year. The Transstroy-led consortium turned out to be the lowest bidder: Rs 4,054 crore, a sum which was 14 per cent lower than the tender value of Rs 4,717 crore fixed by the state government. The contract is for constructing four components of the project: the spillway, the headworks (structure at the diversion point of a waterway), earth-and-rock-fill dam and excavation for the power house. The project is under construction over the Godavari river in West Godavari district.

Interestingly, in the initial stage of the bidding, the price bid submitted by Transstroy and its Russian partner was not opened as the consortium was found technically not qualified. But it was later included in the process. When the government was about to finalise the tender in Transstroy’s favour, the other joint ventures, including Soma-CGGC, Madhucon- Sinu Hydro, and SEW Infrastructure Ltd-Patel cried foul, saying the certificates produced by the Russian partner of Transstroy were fake.

Transstroy filed a counter petition against its rivals, and the high court directed the government to verify the charges. The  government formed a high-powered committee, led by chief secretary Minnie Mathew, to look into the matter. The committee sent two investigative teams of engineers for physical verification to Russia and China, where the bidders claimed to have built dams and other irrigation projects.

Ever since the bidding process for this work package started in June 2011, the contracting companies have been levelling charges against each other of submitting fake documents and certificates.

Teams visit Russia and China for verification

Subsequently, a team of two superintendent engineers visited Russia in the last week of January this year. They came back and gave a clean chit to the Russian company. But there were allegations against the engineers’ team that they were accompanied by Transstroy officals and enjoyed an expensive stay in Russia for which Transstroy made the payments.

The high powered committee met on March 1 to look into the fresh allegation, and then submitted a confidential report to Chief Minister N Kiran Kumar Reddy, who subsequently took the final decision to give the contract to Transstroy-JES UES.

"The report submitted by the investigative teams is satisfactory, and the chief minister is happy with the experience certificate given by Transstroy and its partners,” said major irrigation works minister Peddi Sudharshan Reddy, addressing the media after awarding the contract. There have been allegations that the chief minister was keen on giving the contract to Transstroy since the company reportedly belongs to Rayapati Sambasiva Rao, Congress MP from Guntur.

The court, while finding fault with the decision, asked the advocate-general to state the reason for awarding contract to the company even after giving an undertaking to the court that it would not do so without verifying the authenticity of the documents submitted by the companies. Advocate-general A Sudarshan Reddy said that the government had given an undertaking that it would not finalise the tenders for the project till completion of the verification of genuineness of experience certificates submitted by the bidding companies. The government took the decision only after verifying the claims by the bidders, he told the court.

Pulling up the government for taking a decision in haste even as a case was pending before the court, the high court has ordered it to submit all relevant documents and reports on the basis of which it decided to give the contract to Transstroy. The court will hear the case in detail on March 11.

Meanwhile, the opposition parties in the state have demanded an inquiry by the Central Bureau of Investigation on the government’s decision. They have also planned to take up the issue in the coming budget session of the assembly.


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