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Polavaram dam funding gets a leg up after PM-CM meetings but project unlikely to meet deadline

A team of senior officials from AP were in Delhi since Wednesday to meet with secretaries of Union Jal Shakti and Finance Ministry to discuss key issues regarding the project.

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New Delhi: The deadlock between the Centre and the Andhra Pradesh government over sticky funding issues related to the Polavaram dam project is finally showing signs of thawing, following multiple meetings between Andhra Pradesh chief minister YS Jagan Mohan Reddy and Prime Minister Narendra Modi in the last one year. 

Following a direction from the PMO after CM Reddy requested PM Modi for an advance ad-hoc allocation of Rs 7,278 crore to ensure the project does not get stalled because of dearth of funds till the Union cabinet approves the enhanced amount required to complete the Polavaram dam, the Union finance ministry is considering the request of the state government, ThePrint has learnt.

“Union finance secretary TV Somanthan has held two meetings – one was in January, another in August respectively — on the funding issue. The finance ministry is considering the Andhra CM’s request and has asked for additional information related to the project from the state government,” senior government officials from Andhra Pradesh as well as Jal Shakti ministry told ThePrint.

Also Read: Missed deadlines, cost overruns, tiff with Centre — why Polavaram isn’t yet Andhra’s ‘lifeline’

‘Centre examining state government request’

The Centre and the Andhra Pradesh government had earlier locked horns over the actual cost of the project. The Centre has capped the project cost at 2013-14 price levels, which comes to Rs 20,398 crore. But the state wanted the project cost to be approved based on the 2017-18 price level, which came to Rs 55,548.87 crore. The Centre had earlier not agreed to accept the cost based on the 2017-18 price level.

The Centre’s stand had forced Andhra Pradesh CM YS Jagan Mohan Reddy to shoot off a letter to Prime Minister Narendra Modi in October 2020 saying that any unrealistic cost estimate would result in the project remaining incomplete. 

The state government has said that it will be difficult to complete the project at the reduced rate as the cost has increased manifold since 2014, when it was declared a national project.

“There was a kind of stalemate with both the Centre and state holding their ground. But the Centre, more specifically the finance ministry is now examining the request of the state government to approve the enhanced cost required to complete the dam with the storage level of the reservoir up to a height of 41.15 metres as against the full reservoir level of 45.72 metre,” a senior Jal Shakti ministry official told ThePrint.  

A storage level of 41.15 metre will require rehabilitation of 29,946 project displaced families as against 93,000 pdf if the storage level is 45.72 metres. It will require approximately Rs 10,485 crore, the official said, adding, “The Centre does not want the project to remain incomplete.”  

At a storage level of 41.15 metres, the storage capacity of the reservoir will be 120 TMC as against the full reservoir level of 45.72 metre with a storage capacity of 194.6 TMC (thousand million cubic feet).   

A team of senior officials from Andhra Pradesh led by the state irrigation secretary Shashi Bhushan Kumar were in Delhi for three days since Wednesday to attend meetings with Union Jal Shakti secretary Pankaj Kumar and finance secretary TV Somanathan. Among other matters they also discussed the ad-hoc allocation of at least Rs 7,278 crore up to March 2023, senior officials from Andhra Pradesh  government told ThePrint. 

“We have provided all additional information sought by the Jal Shakti and finance ministries,” Sudhakar Babu Burri, chief engineer, Polavaram Irrigation Project told ThePrint. 

Among the information sought from the AP government includes the overall estimate and benefits of Phase-I, where the storage level of the reservoir at Polavaram dam is proposed to be taken up to 41.15 metres (with a storage capacity of 120 TMC) as against the full reservoir level of 45.72 metre (with a storage capacity of 194.6 TMC), a second AP government official told ThePrint.  

The Jal Shakti ministry has also sought an estimate of probable requirement of funds till March 2023 and a detailed assessment of the damage caused to the diaphragm wall because of flooding in Godavari river in 2019-20.  

The diaphragm wall is the core of the main dam and act as a barrier to cut-off the seepage to the dam. 

But Andhra government officials admit that all this exercise will take time. The project, which has missed multiple completion deadlines in the past, is not going to be completed anytime soon. A revised deadline of June 2024 has been set but off-the-record officials admit that it will take more than that to complete. 

Bone of contention

The Polavaram multipurpose dam was declared a national project in 2014, implying that the state government will execute it on Centre’s behalf and the latter will reimburse every penny spent by the state to complete it. 

But funding remained a sticky issue. Earlier, the finance ministry was funding just the irrigation component of the project, excluding the water component to the tune of Rs 4,068.43 crore, leaving it to the state government to bear the cost.

After a lot of back and forth, the central government has now agreed to the state’s proposal to treat the irrigation and water component of the project together. 

Work on the Polavaram project had started in 2005. At that time the project cost was estimated at Rs 10,151 crore as per 2005-06 price level. The project had missed several deadlines since then and the cost also escalated manifold. The new deadline to complete the project is June 2024.

(Edited by Anumeha Saxena)

Also Read: Monday storm for Polavaram as Modi govt caps project cost to half, angers Andhra


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