The Comptroller and Auditor General of India has said that the project cost of Kaleshwaram project is likely to exceed ₹1.47 lakh crore as against the ₹81,911 crore projected to the Central Water Commission and the capital cost of irrigation works out to ₹6.42 lakh an acre.
The project cost was understated in the detailed project report due to preparation of estimates at old price levels and non-inclusion of provision for price escalation. This, coupled with subsequent changes made in the project works, resulted in the cost of works increasing from ₹63,352 crore to ₹1.02 lakh crore.
This was on account of likely cost of works relating to land acquisition, rehabilitation and resettlement, interest during construction and others which are yet to be entrusted, the CAG said in the performance audit report on Kaleshwaram project tabled in the Telangana Legislative Assembly on Thursday.
The CAG outlined the reasons that led to re-design of Pranahita Chevella Sujala Sravanthi (PCSS) into Dr. B.R. Ambedkar PCSS and the Kaleshwaram projects. During re-engineering, the Kaleshwaram and PCSS projects together were estimated to cost ₹85,651 crore as against the project cost of earlier PCSS project. While the combined project cost increased by 122% due to re-engineering, the targeted command area increased by only 52.22%.
Even after initial re-engineering, further additions and changes were made in the scope of the project works taking the present likely cost of the project to ₹1.47 lakh crore while there was no further increase in the envisaged benefits. The combined project cost of the two projects (PCSS and Kaleshwaram) stood at ₹1.51 lakh crore. This might increase further as the DPR of Pranahita project was not prepared (by March 2022) and its cost was yet to be worked out. Moreover, due to re-engineering of PCSS project and changes made in the works, certain portions of works already executed had become redundant resulting in a loss of ₹767.78 crore.
The CAG said the Irrigation department entrusted the preparation of DPR for Kaleshwaram project to Water and Power Consultants (WAPCOS) despite several deficiencies in the earlier works of the WAPCOS in the preparation of DPR for Pranahita Chevella project which led to its re-engineering.
“As was done in the case of the PCSS project, the department showed undue haste in award of works of Kaleshwaram project also. The department awarded 17 works costing ₹25,049.99 crore relating to the project even before approval of the DPR by CWC in 2018,” the CAG said. After the approval of DPR, changes were made in the project works. In the DPR submitted to the CWC, water for the project was proposed to be lifted from Godavari at the rate of two TMC per day. “The pumping capacity was later increased to 3 TMC per day involving an additional ₹28,151 crore though not warranted,” the report said.
The benefit cost ratio of the project was inflated by overstating the value of project benefits and understating the annual costs. The agriculture benefits were calculated on the assumption that one TMC of water would irrigate 17,688 acres of the command ayacut. Data of other projects in the State showed that one TMC of water could serve an average of only 10,000 acres.
“Thus, there is a significant risk that the 169 TMC of water allocated for irrigation under the project will not be sufficient for Kharif season and there is a high risk that no water will be left for irrigation in Rabi season,” the CAG said. Even with the understated project cost of ₹81,911 crore, the benefit cost ratio worked out to 0.75 (as against 1.51 projected) indicating that the project was ab-initio economically unviable. “This means every rupee spent on the project would yield only 52 paise,” the CAG said.
