“The YS Jagan Mohan Reddy Government move to review, cancel and award new contracts in the irrigation, infrastructure and other sector will bring about savings of thousands of crores,” according to Andhra Pradesh Finance Minister Buggana Rajendranath.

Defending the State Government efforts to cancel the Polavaram contract and award it to new contractor and review power purchase agreements of high tariff wind power projects, the Finance Minister said that the Polavaram contract awarded through reverse tendering process has helped the State Government save about Rs 7,000 crore.

“You will see by the end of the current financial year, the State Government would have saved thousands of crores by cancellation of older contracts and awarding new ones,” he said.

Also read: With new contractor, work resumes on Polavaram project

Referring to the ongoing issue of review of Power Purchase Agreements with the wind power developers, he said “we believe that these contracts were awarded at high costs against the general trends then. Most of these developers were not paid for nearly one year by the Naidu regime. We are in the process of holding discussions with them and believe that we will be able to bring down these high tariffs.”

On being asked about the Union Government’s objections to review the PPAs, he said the issue here is different. “You will see by the end of the year how we would have managed to bring down the cost,” he said.

Read more: Renewable PPAs in Andhra Pradesh benefited 3 players: Jagan

“The State Government’s current priority is to address welfare schemes and we continue to focus on them. While we review all these major projects which have been awarded in the past including the Machilipatnam port contract and the Optic Fibre Project, we will simultaneously focus on capital expenditure in various sectors in the State,” he explained.

Referring to the issues they inherited as part of the State bifurcation process, the Minister said “it takes about a decade to sort out issues. However, it is unfortunate that we inherited a bad system. The last five years under the N Chandrababu Naidu regime was badly managed. We expect to address all these issues as soon as possible and then take up new initiatives.”

When asked about the Government move to cancel contracts and review PPAs of power projects would send wrong signals to industrialists and investors in India and globally, the Minister said “they understand and know what we are doing. We are confident that all these issues will be sorted out and fresh investments will come in.”

Regarding Amaravati, he said that the State Government’s priority is not building the new capital. The focus is on good governance. A capital city cannot be built overnight. It takes years to do so, he said.