Re-tendering of Polavaram project may save Rs 780 crore for AP

Amaravati: The Andhra Pradesh government will be saving public money to the tune of Rs 780 crore thanks to the re-tendering process for the Polavaram project. The state government has called for re-tender of the hydel power plant and main concrete works worth Rs 4,987 crore under the Polavaram project.

Megha Engineering and Infrastructures Ltd (MEIL) submitted its proposal with 12.6 per cent less cost than a previous contractor has. MEIL has submitted its bid for the works for a tune of Rs 4,358 crore. With this, the AP government will save Rs 628 crore through this re-tendering. They are additionally saving an amount of Rs 152 crore in Part-B (PIP Hydro Electric Project), with an overall saving of Rs 780 crore.

The Chief Engineer at the Polavaram project asked the Water Resource Department (WRD) to take up the reverse tender process, for which at least two bidders are required. As only one bidder has participated, there is no provision for initiating the reverse tendering process. “As the bid is less than the IBM value, it may be appropriate to award the contract to Megha Engineering and Infrastructure Ltd considering the current status of the project works and to expedite the works,” Chief Engineer reported to WRD.

The AP government issued instructions on August 17 to upload the bid document of AP Genco along with the balance works of Polavaram headworks including gates. An e-procurement tender-cum-auction notice was published on August 17 by the Superintending Engineer, PIPHW Circle, Dowlaiswaram. It was issued for the combined work of Part-A Polavaram headworks main dam package on LS Contract system for an amount of Rs 1,771.44 cr with a completion period of 24 months. Including Part-B PIP Hydro Electric Project on EPC Turn Key Basis for an amount of Rs 3,216.11 cr with a completion period of 58 months.

The tender documents are made available on e-procurement portal from September 5, 2019, to September 19, 2019, up to 11 am. A pre-bid meeting was conducted on September 9, 2019, at 11 am, and the department has addressed the pre-bid queries received from the prospecting bidder on September 13, 2019. The last date of receipt of the bids was September 21, 2019, 11 am and PQ stage at 5 pm on September 21, 2019.

The initial price bid was opened and found to be Rs 4,359 cr, which is Rs 628.43cr lesser than the ECV value of Rs 4,988 crore. Additional saving  Rs152 cr in Part-B (PIP Hydro Electric Project), for which works were awarded earlier at an excess of 4.8 per cent on the IBM value of Rs 3,157 cr. The overall saving is around Rs 780 crore. On a pro-rata basis, there is a saving of Rs 223 cr in Part-A and Rs 557 cr in Part-B.

Dasari Sreenivasa Rao

Dasari Sreenivasa Rao is a freelance journalist with 26 years of mainstream media experience in Hyderabad and Dubai. He was Business Editor at The Pioneer and Spl Correspondent at Deccan Chronicle and The Hans India. Earlier, he worked for prestigious media brands including ToI, Indian Express (Bombay) and SPG Media and Business Standard in Hyderabad. NSE-qualified Dasari specializes in derivatives trading. He was visiting faculty at IGNOU and handled two batches of journalism students. Dasari is passionate about business journalism and always suggests all to practice rigorous meditation that ensures peace of mind and helps in moving up the value chain.

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