In a major setback to the government, the Andhra Pradesh High Court on Thursday suspended the state Power Generation Corporation's pre-closure orders to Navayuga Engineering Company on a hydroelectric power station which is part of the Polavaram project and stayed the reverse tendering process, initiated by the state government, for the hydroelectric project and the dam head works. 
Justice D V S S Somayajulu issued interim orders to this effect on a petition filed by Navayuga, challenging the AP Genco's pre-closure order. On August 1, the Jagan Mohan Reddy government decided to terminate the contract awarded to Navayuga for execution of the Polavaram dam head works. On August 14, the AP Genco issued the pre-closure order to Navayuga on the hydroelectric project, citing lack of progress in works. The state government issued a 'reverse tender' last week, inviting fresh bids for the hydro power station and the Polavaram head works.