Context

The Ministry of Jal Shakti has constituted a committee to examine the cost escalation of the Polavaram irrigation project under the instructions of the Ministry of Finance.

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• Revised Cost Committee has been formed to rework the cost of Polavaram Irrigation Project (PIP) in Andhra Pradesh, under the chairmanship of a joint secretary of the Finance Ministry.
• The revised cost estimates is being assessed by the Technical Advisory Committee.
• Ministry of Finance has also asked the state government to soon send an audit of Rs 5,000 crore spent prior to 2014, as an audit of Rs 3,000 crore spent has been held so far.

Compensation to affected people

• Compensation package of Rs. 6,36,000 has been fixed for per affected family and those whose cattle is also affected, they will get another Rs. 25,000, as per the package decided.
• There is no complaint pending with the Government of India. To ensure rehabilitation and resettlement of those affected by the project, committees have been formed by state governments and are headed by collectors to look into grievances. Even, a committee has also been set up under the Secretary of Ministry of Tribal Affairs to redress the grievances of tribal people.

Funding Issue of PIP

• The Government of Andhra Pradesh submitted Revised Cost Estimates (RCE) for Rs 57,297.42 crore at 2017-18 price level to Central Water Commission (CWC) in January, 2018.
• The Advisory Committee on Irrigation, Flood Control & Multipurpose Projects of the Department of Water Resources, River Development & Ganga Rejuvenation, Ministry of Jal Shakti in its 141st meeting held in February, 2019 accepted the RCE of the PIP for Rs 55,548.87 crore at 2017-18 Price level (PL) of which cost of irrigation component is Rs.50,987.96 crore
• The approved RCE has reduced mainly on account of reconciliation in estimated cost of certain land under submergence, land for which compensation is payable, cost of remaining works as per relevant schedule of rates.

Polavaram Irrigation Project (PIP)

• This project is located in West Godavari district of Andhra Pradesh, which will also interlink several rivers in the state.
• It has been accorded national project status by the Centre. Its implementation is monitored by the Central Water Commission.
• The project involves relocation of about 50,000 families especially in Khammam, East Godavari and West Godavari districts in Andhra Pradesh, besides 2,000 families in Odisha and Chhattisgarh.

Aim of the Project

• Purpose of this multi-purpose project is to facilitate irrigation and it will also help in the supply of drinking water to Visakhapatnam and water for industrial purposes.
• It also endeavours hydropower to regions of East Godavari, Vishakhapatnam, Krishna and West Godavari districts of Andhra Pradesh.
• It seeks to address the challenges of flooding and droughts witnessed in the respective basins.
• The project also aims to help the Rayalaseema region (comprising Anantapur, Chittoor, Kadapah and Kurnool districts out of the total 13 districts) get more water.

Issues with the project

• Displacement: The environmental impact assessment (EIA) of the project says 276 villages will be affected. The Polavaram Project Environmental Impact Appraisal Report of 1985 expected 150,697 people to be displaced in 226 villages. Of the displaced population, tribals constitute 50%. With inadequate resettlement and rehabilitation measures, this has severe implications on the socio-economic life of the displaced populations.
• Changes to the ecology of the region: Environmental activists argue that the project will submerge forests, wildlife sanctuaries and as a result disturb the ecology.
• Too costly: The project will heavily burden the exchequer and low-cost alternatives for flood and drought prevention should be explored.

Criteria for selection as National Project Any state project can be regarded as a national project where planning and early completion of the project is necessary in the interest of the country. Inter-State projects which are dragging on due to non-resolution of Inter-State issues relating to sharing of costs, rehabilitation and aspects of power production etc., Intra-State projects with the additional potential of more than 2,00,000 hectare (ha) and with no dispute regarding sharing of water and where hydrology is established.  As of 2016, there are 16 Dam projects which have received the status of National Project.