Till the other day, people of the State are used to listen to at least two-hour long speech by the then chief minister N Chandrababu Naidu, on the Polavaram project. He used to hold a review on the progress of the project work on every Monday. According to the available information, the previous government used to claim that over 78 per cent of the project work is completed and the balance would be ready by next June.
The State government had been spending from its borrowed money on the construction of the project, which for all practical purposes, is the responsibility of the Central government. The previous government claimed that the construction responsibility was taken over from the Central government so as to complete the project at the earliest. But, the government never gave a thought on the fiscal loss that the State would be facing with this responsibility. As the government started with Rs 16,000 revenue deficit, it had been depending on external borrowings (debt) for all its activities. The borrowing too is at the higher rate of interest in some cases.
The State government had been spending this borrowed money on the Polavaram Project and the Centre reimburses it after several months. Till then the State has to pay the rate of interest, which the Centre does not give. This rate of interest is an additional burden on the State, which the new government had realised. The new government had decided to hand over the construction work to the Central government and insist upon the Centre to complete the project as per the schedule. This would, if happens, reduce the fiscal burden on the State.
Meanwhile, the Polavaram Project Authority (PPA), which is currently touring the project area inspecting the works and rehabilitation and resettlement, had directed the officials and the contractors to stop the works. The State government officials and the PPA officials, including the chief executive officer, are inspecting the works, checking the bills and checking the quality of the works.
The officials have thus stopped the works on the project bringing down the officials and the contractors to the realistic approach on the project, declining to accept that 78 per cent of the project work is completed as claimed by the previous government.