Jagan Mohan Reddy's government alleges there was corruption in earlier contract.
The Andhra Pradesh government says they are saving Rs 782 crore by ordering reverse tendering of Polavaram irrigation works and hydel power project works.
The Jagan Mohan Reddy-led YSR Congress government had cancelled the earlier contract awarded to Navayuga Engineering by the previous Chandrababu Naidu government. That cancellation has been challenged in court by the company.
The new government went in for fresh tenders and Megha Engineering and Infrastructure Limited was reportedly the lone bidder and said they would execute the remaining Polavaram irrigation works and the 960 MW hydel power plant for Rs 4,358.11 crore. That's 12.6 per cent less than the estimated contract value of Rs 4,987.55 crore - the price Navayuga Engineering had got the contract at.
That's a saving of Rs 628.43 crore. An additional Rs 152 crore is reportedly being saved on the power project for which the estimated contract value was Rs 3,157 crore. The Telugu Desam Party government had reportedly agreed to pay 4.8 per cent more.
Jagan Mohan Reddy's government alleges there was corruption in awarding the earlier contract since it was done through nomination and not by the tender route.
The government had claimed that they had saved Rs 53 crore through reverse tendering in Polavaram Left Connectivity Works.
Megha Engineering and Infrastructure Limited has been involved in the construction of the Kaleshwaram irrigation project in Telangana, for whose formal inauguration Jagan Mohan Reddy had participated as a chief guest along with Maharashtra Chief Minister Devendra Fadnavis in June this year.