The Andhra Pradesh State Cabinet on Wednesday approved the cancellation of the contract given to the Navayuga Engineering Company Limited for the execution of the Rs 3,216.11 crore Polavaram Hydel Power Project. The Cabinet also gave its nod for reverse tendering of the Hydel project.

The state Cabinet, which met under the chairmanship of Chief Minister YS Jagan Mohan Reddy, also took a decision to recover the advance amounts given to the contractor as the latter had not started the works even after taking the fund in advance .

Jagan government, which appointed a committee to look into the allegations of irregularities in the tendering process of various government projects initiated by the previous TDP government, had earlier issued pre-closure notices on the contracting agency, Navayuga Engineering Company Limited, executing the Polavaram project. The Cabinet today approved the decision to cancel the contract and also to go for reverse tendering.

In other decisions, the Cabinet had also approved the decision to withdraw 412.5 acres of land allotted by the previous government to Machilipatnam Port Private Limited (MPPL)  as the latter failed to start work. The MPPL had also failed to pay the rent for the land given to it prompting the state government to take back the lands.

The Cabinet also approved extending the ban on Maoists for one more year an the decision to increase the salaries of ASHA workers from Rs 3,000 to Rs 10,000.

Meanwhile, the Cabinet is all set to take some crucial policy decisions with respect to the government's new sand policy that will come into force from Thursday and also over the merger of AP State Road Transport Corporation (APSRTC) into the government.