Andhra Pradesh to push for acceptance of RCE at 2017-18 PL at Polavaram project meet today

However, the MoF, on October 12 this year, made it clear that funding would be given to only the irrigation component that too as per the RCE at the 2013-14 PL for 2010-11 work quantities.
Polavaram project (Photo |EPS)
Polavaram project (Photo |EPS)

VIJAYAWADA: The three major aspects the State government is likely to raise in the Polavaram Project Authority (PPA) meeting, scheduled on Monday, are seeking confirmation of the revised cost estimates (RCE) at the 2017-18 price level (PL), unconditional release of pending reimbursements as the issue of RCE in all likelihood has to go to the Union Cabinet if the price level has to be revised, and pointing out that the water supply component is included in the national project funding. 

Sources in the Water Resources Department said that a presentation would be made in which the officials are expected to inform that the RCE at the 2017-18 PL was submitted at the repeated requests of Polavaram Project Authority. Sources added that the officials would push for the 2017-18 PL, which was sought by the PPA and later approved and recommended by the Technical Advisory Committee (TAC) and Revised Cost Committee (RCC) of the Union Ministry of Jal Shakti (MoJS). 

“We will prevail upon the PPA to inform the MoJS that the RCE at 2017-18 PL should be considered. The MoJS is responsible to get the investment clearance from the Centre. So, it will have to recommend the latest rates for the Polavaram national project execution,” a senior official explained. 

If the PPA agrees to recommend the 2017-18 PL, it will be sent to the MoJS, which in turn will forward it to the Union Ministry of Finance (MoF). However, the MoF is bound by the Union Cabinet resolution passed in March, 2017, which stated that the Centre would provide 100 per cent of the remaining cost of the irrigation component of the project for the costs as on April 1, 2014. 

For the record, the State government has sent four cost projections - RCE at 2013-14 PL for Approved Quantities of 2010-11, RCE at 2017-18 PL for Approved Quantities of 2010-11, RCE at 2013-14 for Revised Quantities and RCE at 2017-18 PL for Revised Quantities -- to the Central Water Commission in 2017 and 2018, as sought by it. The quantities changed due to change in the scope of work and due to the Land Acquisition, Rehabilitation and Resettlement Act, 2013. In February, 2019, the Technical Advisory Committee approved the RCE of Rs 30,610 crore (including power component which is not included in the Central funding) at the 2013-14 PL for 2010-11 quantities and the RCE of Rs 55,548 crore at the 2017-18 PL for Revised Quantities. In March this year, the Revised Cost Committee (RCC) pruned the RCE at the 2013-14 PL for 2010-11 quantities to Rs 28,919 crore and the RCE at the 2017-18 PL for Revised Quantities to Rs 47,725.75 crore, and forwarded the same to the MoF.

However, the MoF, on October 12 this year, made it clear that funding would be given to only the irrigation component that too as per the RCE at the 2013-14 PL for 2010-11 work quantities. It pegged the cost at Rs 20,398.61 crore after deducting drinking water component and power component from Rs 28,919 crore. The MoF’s communication was based on the March 15, 2017 Union Cabinet resolution that said the Centre would bear only the irrigation component as per the cost as on April 1, 2014. The Union Cabinet also said that no Central funding would be provided beyond the cost as on April 1, 2014, due to change in the scope or prices. It also said that additional cost of land acquisition, beyond the one that has already been included in the 2010-11 assessment cost of Rs 16,010 crore, would be restricted. 

Though the Union Cabinet in May, 2014, passed a resolution that it would bear all further expenses, the MoF has taken the March, 2017 resolution as the operative decision as the State government did not raise any objection to it and, in fact, thanked the Centre immediately after the Cabinet announcement. 
“So, for the MoF to consider the latest rates, the MoJS has to recommend investment clearance for the 2017-18 PL and send the same to the Cabinet for approval. The MoF has to follow what the Cabinet decides,” another official explained. 

As it appears imminent that the RCE goes to the Union Cabinet once again, the process for which is expected to take time and efforts, the officials have decided to seek unconditional release of pending cost reimbursements in the meantime so that the project execution remains unaffected. The State officials have already started pursuing the matter with the MoJS in New Delhi and are also expected to raise it in Monday’s meeting. “The communication on October 12 was the first time that the MoF put a condition that subsequent reimbursements would be made only after confirmation of the RCE at the 2013-14 PL. It will be a long road ahead for getting the RCE approved at the costs cleared by the Central Water Commission, PPA, Revised Cost Committee of MoJS.  So, we will ask for unconditional release of reimbursements until the issue of RCE approval is cleared,” another official said. 

Another point the State would make in the PPA meeting is regarding the drinking water component. The MoF, in its letter dated October 12, said that as per the RCE at the 2013-14 PL for 2010-11 quantities, only Rs 20,398.61 crore has to be paid. It removed the drinking water component citing that the Cabinet agreed to fund only irrigation component. However, the State is set to point out that the CWC’s guidelines on national project funding state that drinking water component is included in Central funding. 

“What is not included is the transmission system that would be exclusively required for water supply. We are not taking up any exclusive network for it. So, drinking water supply component can’t be omitted,” the official said.

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