Hyderabad: The Comptroller and Auditor General (CAG) performance audit on the Kaleshwaram Irrigation Project Corporation Limited (KIPCL) Project on Thursday, February 15, has revealed that the project’s costs could exceed Rs 1,47,427.41 crore, which is 80% higher than the original estimate of Rs 81,911.01 crore.
According to the performance audit, the state government issued 73 separate approvals for the Kaleshwaram lift irrigation project, worth Rs 1,10,248.48 crore, without approval from the Central Water Commission (CWC). “As of March 2020, the total expenditure reached Rs 86,788.06 crore, with Rs 65,807.86 crore incurred in the previous year (March 2019),” the report said.
“Changes in the project’s engineering and designs after the initial planning led to extra costs. Due to revisions of the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) and changes in the redistribution of works, the project suffered a financial loss of Rs 767.78 crore,” said the CAG report.
Incomplete works at Kaleshwaram
Out of the 56 works where only 12 were completed, 40 were ongoing, and 4 hadn’t started as of March 2022. Issues with land acquisition and incomplete identification of the required distributary network were noted.
The possibility of undue benefit to contractors for the supply and commissioning of pumps, motors, etc., for the Kaleshwaram project, due to the inclusion of a price adjustment clause, was highlighted. This could lead to avoidable extra payments of Rs 31,348.42 crore.
The audit also questioned the Kaleshwaram Lift Irrigation Project’s economic viability. It cited a benefit-cost ratio (BCR) of 0.75 and shared concern over its financial sustainability due to off-budget borrowings of Rs 8,911.01 crore. “Even with the off-budget borrowings worth Rs 8,911.01 crore raised by KIPCL, the latest likely project cost Rs 1,47,427.41 crore yields a BCR of 0.75, rendering the economic viability of the project questionable,” it exposed.
Undue haste in awarding works
The Department exhibited undue haste in awarding works, with 17 contracts worth Rs 25,049.99 crore being approved before the completion of the Detailed Project Report (DPR). In the DPR, water for the Kaleshwaram project was originally set to be lifted from the Godavari River with a capacity of 2 TMC per day. This capacity was later increased to 3 TMC per day, which added a cost of Rs 28,151 crore, it said.
