Polavaram Project is the lifeline of Andhra Pradesh with 194.6 tmc full storage capacity and available capacity of 175 tmc for the purposes of irrigation and drinking water for the existing 13 districts, in addition to the generation of 960 MW hydel power. As per projections, the dam with a height of 45.72 meters besides right and left canal works may be completed by 2023.
The advantages of Polavaram are manifold. While East and West Godavari, and Krishna districts benefit directly, it also meets the drinking water and industrial needs of Vizag -- 80 tmc will be diverted to the river Krishna, 23.44 is meant for Vizag, as per the Detailed Project Report (DPR).
Andhra Pradesh is the tail-end of river Krishna and the available source of water has been shrinking due to existing projects in upper reaches of the river in Karnataka. Polavaram will give us a fillip with the diversion of 80 tmc to river Krishna.
As per Section 90 of the Andhra Pradesh Reorganization Act, Polavaram Irrigation Project has been notified as a National Project. Hence, the contention is that irrigation component alone is to be considered, as it is in case of other national projects, as far as Central funding is concerned. But, the total project cost includes 960 MW power, and drinking and industrial usage of water for Vizag. As far as the cost of Rehabilitation and Resettlement (R&R) is concerned, there are practical constraints since the project works were commenced without completing R&R prior to 2013.
At the time, the estimated cost of R&R was around Rs 3500 crore only. But Rs 5,135 crores was incurred on Right and Left Canals before commencing head works for the main dam. Meanwhile, the Union Government had enacted the Land Acquisition, Rehabilitation and Resettlement Act in 2013, which increased the cost of R&R. Besides, time and cost overruns in the implementation of the Project resulted in abnormal cost escalation.
In Sept, 2016, the then finance minister Arun Jaitleyji had approved reimbursement of 100% expenditure incurred post 01.04.2014 to the extent of the irrigation component at the price level of 2013-14. This was part of the special central assistance announced for the State.
Subsequently, a Cabinet resolution was passed on February 20, 2017 for approving the Special Central Assistance, in which funding for the Polavaram Project was mentioned as the 4th point.
To better comprehend the source of the obligation for R&R, We need to understand and interpret Section 90(4) of the Andhra Pradesh Reorganization Act, 2014 fairly, alongside the announcement made by the then prime minister Dr Manmohan Singh. Clarification on the cost of R&R for Polavaram was the 4th of the six announcements he made on February 20, 2014. The gist of his announcement was that all necessary amendments will be made at the earliest for full and fair assessment of R&R for the project so that the cost could be borne by the Union Government as per the compensation stipulated in the Land Acquisition, Rehabilitation & Resettlement Act, 2013.
The Andhra Pradesh had sent the DPR with an estimated project cost of Rs 30,718.95 crore and Rs 55,656.87 crores at the prices of 2013-14 and 2017-18 respectively. The project cost was Rs 16,010.45 crores at the prices of 2010-11.
After careful consideration of facts to arrive at the cost of the Irrigation component, the Total Revised Cost of the Project was estimated as below by the technical committee formed by the Union Ministry of Finance.
The engineer-in-chief of Andhra Pradesh is also a member of the panel. It identified a few deficiencies in land acquisition. They are, a) Initial Projected Land requirement for the project was 1.34 lakh acres only. Now, it has increased to 1.80 lakh acres.
Of the additional 46,000 acres, 6,000 acres received the nod as it pertains to distributaries. This was not considered in the initial project assessment. And then, the committee identified that government and forest lands to the extent of 30,000 acres and 9,000 acres respectively were also included. Hence, it denied this portion.
For any project, the Project Dislocated Families (PDF) are very important to consider R&R. In case of Polavaram, the Initial assessment of PDF was 44,574 families.
At present, it has increased to 1,06,006 families. The committee has reduced PDF by 13% after checking scientifically. Evaluation of the True and Fair Cost of the Project can be done only after considering facts. After factoring in all the above practically, the Finance Committee assessed the Polavaram Project Cost as follows:
Crux of the whole problem is around the hike in the cost of R&R due to huge increase in the Total Project Cost at prices in different points of time from 2010-11 to 2013-14 and 2017-18 after the advent of the Land Acquisition, Rehabilitation and Resettlement Act, 2013 and merger of the seven mandals of Telangana with Andhra Pradesh, which was not part of the DPR of the year 2010-11.
Apart from this, for a reasonable assessment of R&R for the irrigation component, there are practical issues. It is very important to arrive at it since the Union Government’s obligation is confined to the irrigation component of the Project only.
The Union Government had agreed for the reimbursement of the cost of 100% of the irrigation component incurred by the Andhra Pradesh Government after 1.4.2014.
As per this calculation, the Union Government has obligation to reimburse only the balance amount of Rs 4,346.74 cr. But, as per practical argument, Polavaram Project requires more funds due to time and cost overruns. Political blame games only result in uncertainty.
There is one claim that as a compromise, the height of the project could be limited to 41.50 meters instead of 45.72 meters. But it will not be possible since the DPR approved quantities for the construction of the Project cannot be altered.
Further, the State Government had requested the Committee of the Finance ministry to provide funds for drinking and industrial water component in return for revenues derived from them. But the Committee rejected the proposal since there is no scope for such kind of commercial modus operandi in governance.
Hence, the onus is on the State Government to provide necessary information to the Union Government to get the funds on the escalated project cost for speedy completion of the Polavaram Project.
Lanka Dinakar. BJP Political Feedback Pramukh