The Andhra Pradesh High Court on Thursday struck down an order of the YS Jaganmohan Reddy-led government cancelling the contract of Navayuga Engineering Company Limited for executing the Rs 3,216 crore Polavaram hydropower project. The court also directed that the process of entrusting the project to any other firm be stopped immediately, PTI reported.

The judge said that the termination of contract was not in accordance with the established principles of law. The judge added that the Andhra Pradesh Power Generation Corporation, the firm’s employer, did not act in accordance with the terms of the contract.

The court made the order after hearing a plea by the Navayuga Engineering Company. “Though we told the government that we had already spent Rs 398 crore towards turbines, generators and other electro-mechanical works, besides advance payments to sub-contractors, the government unilaterally cancelled our contract,” the advocate for the firm told the court, the Hindustan Times reported.

Navayuga entered into the contract with APGENCO in December 2017, and was to complete the hydropower project by November 20, 2021. However, the Jaganmohan Reddy-led government decided to terminate the contract on August 1, and APGENCO issued the termination notice to the firm on August 14.

State Water Resources Minister P Anil Kumar Reddy said the government will implement the High Court’s order.

However, former Chief Minister N Chandrababu Naidu, who was at the helm when the contract was signed, lashed out at the state government. “What will the government say to this now?” he asked. “Despite the Centre’s warning, the state government is not appreciating the reality. We have been cautioning against indiscriminate actions too.”

Now, follow and debate the day’s most significant stories on Scroll Exchange.