The Andhra Pradesh Government cancelled the contract for Machilipatnam port being constructed by a consortium, with the lead promoter being Navayuga Engineering Company (NEC).
Earlier, the State Government asked NEC to withdraw from the mega Polavaram irrigation project on the Godavari, where NEC was a sub-contractor.
The State Government also gave instructions to the Krishna district administration to take back more than 400 acres of land given to NEC.
Machilipatnam port project has not taken off for the past 11-12 years. First, it was proposed by the late Y.S Rajasekhara Reddy, when he was the Chief Minister, and the contract was awarded to Maytas Infra Ltd, of the Satyam Computers group. But after the Satyam scandal broke out, Maytas Infra was asked to quit and NEC was brought in. The Teulug Desam Government completed the land acquisition for the port and a few weeks before the poll notification the former chief minister, N. Chandrababu Naidu, even formally launched the commencement of port works.
The Telugu Desam party leaders condemned the action of the State Government in cancelling the contract and accused the YSR Cong Government of targeting Navayuga Company. The port project would be delayed inordinately, as fresh tenders would have to be floated and there would be cost escalation as well.