CAG's report on Kaleshwaram Project

February 15, 2024 20:19

CAG's report on Kaleshwaram Project:- On Friday, February 15, the Comptroller and Auditor General of India (CAG) released a new report that unveils the Kaleshwaram Lift Irrigation Project's escalating cost. The report reveals that the project's cost is expected to surpass Rs 1.4 lakh crore (1,47,427.41), significantly higher than the projected cost of Rs 81,911 crores presented to the Central Water Commission (CWC). The Kaleshwaram project, which was a prominent initiative of the previous Telangana government led by the Bharat Rashtra Samithi (BRS), has faced controversy and has been attributed as a key factor in the BRS' defeat in the state Assembly elections held in November 2023. Additionally, the CAG report highlights that out of the total expenditure of ₹86,788.06 crore incurred by March 2022, 64.3% (₹55,807.86 crore) was financed through off-budget borrowings raised by the Kaleshwaram Irrigation Project Corporation Limited (KIPCL). The BRS government established KIPCL as a special purpose vehicle (SPV) to manage the project's financial matters.

According to the report, there is a possibility of contractors receiving undue benefits amounting to at least ₹2,684.73 crore for the supply and commissioning of pumps, motors, and other equipment. The main barrages of KLIP, which were launched on October 28, 2023, have faced criticism from the Opposition parties, including the Congress and the BJP. They argue that the sinking of piers is evidence of poor management. The Telangana Congress has even promised a judicial inquiry into alleged irregularities and corruption surrounding the project. Since coming to power, they have been highly critical of it.

A previous report by the CAG, released in March 2021, highlighted that 65% of the loans guaranteed by the state government were related to two specific projects: Mission Bhagiratha and the Kaleshwaram Project. The report also pointed out that many institutions lacked the resources to repay these loans, as the Kaleshwaram Project, for instance, did not generate significant revenue due to the low rates charged for irrigation water. Additionally, the current report reveals that the Telangana government has not given administrative approval for the project as a whole. Instead, they have issued 73 separate approvals, amounting to a total of ₹1,10,248.48 crore. The report also mentioned that there was a lack of information from the Government regarding the project's funding pattern. Additionally, it stated that the project's benefit-cost ratio (BCR) was exaggerated.