Kaleshwaram unviable: CAG

Hyderabad: The Comptroller and Auditor General’s (CAG) report exposes undue benefits that the contractors got in the execution of the works of the Kaleshwaram project. The report said the Irrigation department had shown undue haste in the award of works and the Benefit-Cost Ratio (BCR) of the project was inflated.

The report pointed out that the Kaleshwaram Lift Irrigation Scheme (KLIS), claimed to be the world’s biggest LI project by the previous BRS government, was ‘economically unviable’. It said that every rupee spent on the project would yield only 52 paise. The CAG also said the previous government did not take any administrative approval for the project as a whole.

The CAG also found fault with the BRS government for not submitting the revised DPR (Detailed Project Report) to the Centre on the enhancement of withdrawal of water from 2 tmc ft to 3 tmc ft from the project every day.

The report which was tabled in the Assembly on Thursday said that considering the latest likely project cost (Rs 1,47,427.41 crore), the Benefit Cost Ratio (BCR) worked out to only Rs 52 paise. The BCR is likely to go much lower considering the possibility of further increase in the cost of works and interest component while the actual benefits/revenues from agriculture and industrial/drinking water supply would be much lower.

The report further said originally it was estimated that the project would cost Rs 81,911 crore. Instead of taking administrative approval for the entire project, the government had issued separate approvals for individual works in a piecemeal manner. As of March 2022, as many as 73 administrative approvals aggregating to Rs 1.10,248 crore have been given. There were also no orders from the government about the funding pattern for the project. The Kaleshwaram Irrigation Project Corporation Limited (KIPCL) raised market loans of Rs 87,449 crore with guarantees provided by the state government. The corporation does not have any sources of revenue and the burden of repayment of the loan and interest was likely to fall on the state government, the report said.

The KIPCL required a total amount of Rs 1,41,544 crore (ranging from Rs 712 crore to Rs 14,462 crore every year) in the next 14 years for debt servicing. This will have a long-term impact on the finances of the state and it was an indication of improper planning and ad hocism, the CAG said.

The CAG also found that the Irrigation department entrusted the work of the preparation of the DPR for the Kaleshwaram project to the Water and Power Consultants Limited (WAPCOS) despite several deficiencies in its earlier DPRs of Pranahita Chevella Sujala Sravanthi (PCSS) project, the CAG added.