When a new government takes over, it is not unusual for it to review the decisions of the previous dispensation. But the developments Andhra Pradesh has seen recently are perhaps unprecedented.
The YSR Congress Party (YSRCP)-led government, which stormed to power in the state in May with a massive mandate, is moving at rapid speed in not only reviewing all the major decisions taken by the previous government of Telugu Desam Party (TDP) but also scrapping many.
From stopping work on development of the state capital Amaravati to renegotiating Power Purchase Agreements (PPAs) signed by the previous government with the producers of renewable energy and from terminating contract for one of the works of Polavaram irrigation project to closure of ‘Anna Canteens’, everything has happened in just two-and-a-half months.
Immediately after taking over as Chief Minister on May 27, Y. S. Jagan Mohan Reddy decided to review all the projects and announced that it would cancel the contracts and call for fresh tenders wherever the government found irregularities. He argued that reverse-tendering will bring transparency as it would facilitate participation of a large number of bidders and the tenders will be awarded to the lowest bidders.
The decision kicked up controversy, for Andhra Pradesh is yet to overcome the post-bifurcation problems. After Telangana was carved out with Hyderabad as its capital in 2014, the residuary state of Andhra Pradesh was left without a state capital and began a new journey with huge fiscal deficit and many thorny issues arising out of the split.
TDP, which formed the first government in the residuary state, embarked on building the state with several ambitious projects including capital Amaravati, the brainchild of then Chief Minister N. Chandrababu Naidu.
“Jagan Reddy is trying to take over the state with retrospective effect which is not possible as governance is a continuous process. One can go only on case-to-case basis. But he is trying a blanket reversal,” political analyst Telakapalli Ravi told IANS.
“Jagan Mohan Reddy wants to de-legitimise actions and decisions of his predecessor. It is evident that the chief minister wants to discredit TDP supremo as a corrupt individual whose regime was filled with corruption and deceit,” says another analyst P. Raghava Reddy.
TDP is shocked over the decisions. “This is something which did not happen in the past. We have seen many governments in the past but they never resorted to such actions despite enjoying huge majority. Even Mr Jagan Mohan Reddy’s father Mr Y. S. Rajasekhara Reddy did not do this,” senior TDP leader and former minister Somireddy Chandramohan Reddy told IANS.
Chandramohan Reddy alleged that Jagan Reddy wanted to see every work started by TDP government come to a halt but in the process he is making the state suffer.
“When you have such a huge mandate, you should run the government with a cool head, provide good governance and deliver on the promises you made, instead of scrapping everything that the previous government had launched,” said the TDP leader.
The ruling party, however, defends its actions, alleging that there was corruption in awarding the contracts.
“There are allegations that by quoting excess amount for all tenders, those in the previous government received kickbacks. That’s why the government is reviewing the contracts and we now feel that there is truth in these allegations. They committed irregularities by going for awarding contracts on nomination basis,” YSRCP spokesman Ambati Rambabu told IANS.
He said wherever the government find irregularities, it will cancel the contracts and go for reverse-tendering. “This exercise is aimed at checking corruption and save the public money. After completing the entire exercise we will reveal how much the government could save,” he said.
However, TDP believes that the action of YSRCP government is driven by political vendetta.
“It is a clear case of political vendetta. People have given mandate to them for five years to develop the state and not to act with vengeance,” senior TDP leader K. Rammohan Rao told IANS.
Rambabu said the allegation of political vendetta itself shows there was corruption. “Why should Mr Chandrababu Naidu or his TDP worry? If we cancel the projects, contractors will suffer and they will go to court. This clearly shows the contractors were their own people.”
Rammohan Rao claims that there were no irregularities in awarding the contracts. “If irregularities are there, let them find out, make their findings public and file cases. Why have you not blacklisted those contractors,” he asked.
The TDP leader said even after cancelling the tender, the government was saying that the contractor can participate in fresh tenders.
“Scrapping of contracts will have financial implications in addition to the time lost. Allowing current contractors to re-bid looks like a mockery; and Jagan has to establish tangible benefits over his reverse tendering move,” says Raghava Reddy.
However, the scrapping of the contracts sparked created uncertainty about the future of some mega projects and created doubts whether the state can attract new investments.
The ruling party does not agree that the review of projects and cancellation of tenders will impact investment. “There is no link with the investment. Those investing in the state will not be affected,” said Rambabu.
When his attention was drawn to the apprehensions in business and industry circles, Rambabu exuded confidence that the apprehensions will remove once they see the government’s transparency. “It’s only two and half months. Our government is working in a transparent manner and trying to provide corruption-free governance. After seeing this on ground they will be convinced,” he said.
The YSRCP leader believes that all doubts and apprehensions will be cleared within six months. “We are sincere in our efforts to provide clean governance. There will be no harassment of investors and no kickbacks will be taken from them. It will take some time to show whether we are doing what we are saying. Once they are convinced, all investors will come here.”
In the first major decision since announcing a review of all major contracts, YSRCP government on August 1 terminated the contract of Navayuga Engineering Company Limited (NECL), which was tasked to execute some works relating to Polavaram project, being built across Godavari river.
The previous government had awarded contract worth about Rs 3,000 crore to NECL. However, an expert committee appointed by the new government found irregularities in entrustment of works to NECL on nomination basis.
Centre, which is funding Rs 58,000 crore Polavaram project, found fault with the state government’s move and said this might lead to further delay in the long-pending project.
“It is their view that the reverse tendering will delay Polavaram project and also increase its cost but we strongly believe there will be no delay and we will save public money,” said Rambabu.
Analyst Ravi feels that the Centre is playing hide and seek over Polavaram. “They don’t explicitly prevent or endorse anything. They only say we are advising. Jagan Reddy is worried that if he goes back at this stage, his image may suffer. Many things may happen in coming days. After all this being the national project, the Centre has to provide the funds. They are waiting for the time to strike.”
“Polavaram is a project facing much delay, and this is going to get worse with moves like reverse tendering. Coming to Amaravati, Jagan’s urge to discredit Naidu will have an impact on those who have shown interest in land in and around the state capital. While corrupt must be brought to justice, a blanket approach will only hurt the sentiment,” said analyst Raghava Reddy.