High court strikes down Andhra govt order terminating contract

THE COURT SUSPENDED THE PRE-CLOSURE ORDER ISSUED BY THE STATE-RUN AP POWER GENERATION CORPORATION

HYDERABAD: The Andhra Pradesh high court on Thursday struck down the state government’s order terminating the contract awarded to Navayuga Engineering Company Limited to execute a ₹3,216-crore hydro-power project, which is a part of the Polavaram major irrigation project on the Godavari river.

A bench headed by Justice D V SS Somayajulu issued an interim directive, suspending the pre-closure order issued by the state-run AP Power Generation Corporation (APGenco) on August 14 cancelling the contract of the firm.

The firm had on Tuesday moved the high court challenging the YSR Congress government’s move.

The state government led by Jagan Mohan Reddy had sought cancellation of the contract awarded by the previous Telugu Desam Party (TDP) government, alleging there was large-scale corruption in the Polavaram multi-purpose irrigation project.

The high court bench revoked the state government order 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 ₹398 crore...the government unilaterally cancelled our contract,” he argued.

TDP president and former CM Chandrababu Naidu said the court directive was like a slap on the face of the Jagan Mohan Reddy government.