Telangana - Kaleshwaram Project is a Big Fraud
In a review meeting conducted here on Sunday, the Congress-run state government referred to the kaleshwaram Lift Irrigation Project as a 'huge swindle' against Telanganans. The conference, attended by chief minister Revanth reddy and State Irrigation minister Uttam Kumar Singh, decided to create a committee comprising the Central Water Commission, National Dam Safety Authority, and engineering experts to improve the project.
Later, during a news conference, telangana Pradesh congress Committee (TPCC) vice president G Niranjan said that despite the recent collapse of the Medigadda barrage, the then-chief minister Chandrashekar Rao-led BRS government did nothing. He stated that the individuals in charge of the collapse had prioritized contractor interests above Telangana's. "All these contractors should be blacklisted and if they have been entrusted with other tasks in the State, they should be avoided," Niranjan said in a statement.
Later, during a news conference, telangana Pradesh congress Committee (TPCC) vice president G Niranjan said that despite the recent collapse of the Medigadda barrage, the then-chief minister Chandrashekar Rao-led BRS government did nothing. He stated that the individuals in charge of the collapse had prioritized contractor interests above Telangana's. "All these contractors should be blacklisted and if they have been entrusted with other tasks in the State, they should be avoided," Niranjan said in a statement.
According to authorities, a performance audit study for the kaleshwaram Lift Irrigation Project on the godavari river shows that the entire project would be a white elephant for the state. The Comptroller and Auditor General (CAG) performed the audit last year. According to a classified CAG study accessed by india Herald, an irrigation project may be regarded economically feasible only if the Benefit Cost Ratio (BCR) is 1.5 in typical regions, according to the Union Jal shakti Ministry's recommendations. This means that every rupee invested in the project should provide ₹ 1.50 in benefits.
The BCR was anticipated at 1.51 in the 2017 detailed project report (DPR) for the re-engineered kaleshwaram project, which was authorized by the Central Water Commission in june 2018. The CAG audit examination in 2022 revealed that the BCR was overstated by underestimating yearly expenditures and overestimating annual profits from the project.
According to a recent CAG audit report, the project's BCR is just 0.52, after accounting for yearly expenditures such as capital interest, operation and maintenance costs, power consumption costs, and depreciation on civil works, pumps/motors, and pipes.
The BCR was anticipated at 1.51 in the 2017 detailed project report (DPR) for the re-engineered kaleshwaram project, which was authorized by the Central Water Commission in june 2018. The CAG audit examination in 2022 revealed that the BCR was overstated by underestimating yearly expenditures and overestimating annual profits from the project.
According to a recent CAG audit report, the project's BCR is just 0.52, after accounting for yearly expenditures such as capital interest, operation and maintenance costs, power consumption costs, and depreciation on civil works, pumps/motors, and pipes.
"This means that every rupee spent on the project would yield a meagre benefit of 0.52 paise, indicating that the project is not economically viable," according to the research.
In 2007, the Pranahita-Chevella Sujala Sravanti (PCSS) project cost ₹38,500 crore and sought to provide irrigation for 1.64 million acres. After the project was renamed kaleshwaram, the goal was to build a new command area of 18.25 million acres while stabilizing another 470,000 acres. The project cost increased to ₹85,596.58 crore.
The CAG audit stated that the previous administration used huge borrowings to complete the kaleshwaram project. In august 2016, it established kaleshwaram Irrigation Project Corporation Limited (KIPCL), a special purpose organization to raise financing for the kaleshwaram project.
As of march 2022, KIPCL had negotiated 15 credit agreements with banks and other financial organizations for an overall loan value of ₹87,449.15 crore. This included a sum of ₹11.220.22 crore for interest during construction, which would be added to the principal amount of the loan. These loans feature interest rates ranging from 7.8% to 10.9%.
In 2007, the Pranahita-Chevella Sujala Sravanti (PCSS) project cost ₹38,500 crore and sought to provide irrigation for 1.64 million acres. After the project was renamed kaleshwaram, the goal was to build a new command area of 18.25 million acres while stabilizing another 470,000 acres. The project cost increased to ₹85,596.58 crore.
The CAG audit stated that the previous administration used huge borrowings to complete the kaleshwaram project. In august 2016, it established kaleshwaram Irrigation Project Corporation Limited (KIPCL), a special purpose organization to raise financing for the kaleshwaram project.
As of march 2022, KIPCL had negotiated 15 credit agreements with banks and other financial organizations for an overall loan value of ₹87,449.15 crore. This included a sum of ₹11.220.22 crore for interest during construction, which would be added to the principal amount of the loan. These loans feature interest rates ranging from 7.8% to 10.9%.
As per the repayment schedules incorporated in the respective loan agreements, these loans were to be repaid in 12 years, either in 48 quarterly or 144 monthly installments.
"According to government regulations given when the KIPCL was formed, the state government must ensure that the company receives devoted and sufficient earnings to repay debts. But this did not happen. In the lack of any revenue sources for KIPCL, the responsibility of loan repayment and interest will eventually fall on the state government, according to the CAG report.
The state government would need ₹14,462 crore annually to service the debt for the kaleshwaram project. Additionally, cash would be needed for operational expenditures, including ₹10,374 crore for energy consumption and ₹272 crore for the operation and maintenance of elevators.
The state government would need ₹14,462 crore annually to service the debt for the kaleshwaram project. Additionally, cash would be needed for operational expenditures, including ₹10,374 crore for energy consumption and ₹272 crore for the operation and maintenance of elevators.
"Assuming that the project would be completed and would become fully operational from 2024-25, the requirement of funds for the operation of the kaleshwaram project, including debt servicing in the coming years will be as high as ₹25,109,41 crore," according to the CAG.
If the government is to carry this load, it must provide significant expenditures to the irrigation sector in its yearly budget.
Over the past six years, the kaleshwaram project has received budget allocations ranging from ₹1,382 crore to ₹5,072 crore. Over the last six years, the project received a total allocation of ₹27,137 crore, with just ₹18,659 crore expended. So, even the budgeted money was not used," the CAG stated.
If the government is to carry this load, it must provide significant expenditures to the irrigation sector in its yearly budget.
Over the past six years, the kaleshwaram project has received budget allocations ranging from ₹1,382 crore to ₹5,072 crore. Over the last six years, the project received a total allocation of ₹27,137 crore, with just ₹18,659 crore expended. So, even the budgeted money was not used," the CAG stated.