Here's What CAG Report Says On Financial Irregularities In Former Telangana CM KCR's Flagship Kaleshwaram Project

The Comptroller and Auditor General of India (CAG) has uncovered significant financial irregularities in the implementation of Telangana's Kaleshwaram project, as revealed in its 260-page report presented in the Telangana State Legislative Assembly.

The report sheds light on various discrepancies in the project's finances, with the cost now expected to exceed Rs 1,47,427.41 crore, far surpassing the originally projected cost of Rs 81,911.01 crore submitted to the Central Water Commission (CWC).

Key findings from the report indicate that the Government of Telangana did not provide administrative approval for the entire project but issued 73 separate approvals amounting to Rs 1,10,248.48 crore, as per report by TheHansIndia.

Additionally, no official orders on the project's funding pattern were issued.

A significant portion of the total expenditure (64.3 per cent), amounting to Rs 55,807.86 crore as of March 2022, was covered by off-budget borrowings (OBBs) raised by the Kaleshwaram Irrigation and Project Corporation Limited (KIPCL).

The report also highlights an inflated Benefit-Cost Ratio (BCR), indicating the project's economic unviability, with the latest estimated project cost resulting in a BCR of 0.52. This suggests that every rupee spent on the project would yield only 52 paise.

Moreover, the project faces challenges in meeting its energy demands, with the peak energy demand exceeding the average daily energy consumption for the entire state in the fiscal year 2021-22.

The absence of a comprehensive plan outlining funding sources for such a massive project indicates inadequate planning.

Furthermore, despite a targeted new Cultivable Area (CA) of 18.26 lakh acres, only 14.83 lakh acres have seen the development of the distributary network, with a mere 40,888 acres of actual command area created as of March 2022. Several works were awarded before Detailed Project Report (DPR) approval, leading to a lack of due diligence.

Additionally, changes in project works rendered certain executed works redundant, resulting in a loss of Rs 767.78 crore.

Out of 56 project works, only 12 have been completed, 40 are ongoing, and four have not commenced as of March 2022.

Moreover, the identification of lands required for the distributary network remains incomplete.

The report also raises concerns about possible undue benefits to contractors and highlights instances of avoidable payments, including post-tender inclusion of a price adjustment clause resulting in a payment of Rs 1,342.48 crore.

Telangana Chief Minister Revanth Reddy had earlier inspected the Medigadda barrage, a crucial component of the Kaleswaram Lift Irrigation project initiated by his predecessor K Chandrasekhar Rao (KCR).

The inspection followed the sinking of six piers of the barrage, which was inaugurated in 2019.

The project has faced criticism from opposition parties, including the Congress and BJP, who allege corruption and misuse of funds. The BJP has questioned the Congress's sincerity in addressing the issue, pointing out the lack of support for a CBI probe.

The Congress government had also requested for a High Court-monitored probe, but the court could only appoint a retired judge.

Revanth Reddy's actions, including changing the state's emblem and modifying its abbreviation, are seen as attempts to challenge KCR's legacy and establish his own.