Hyderabad: The PC Ghose Commission uncovered significant corruption in the Kaleshwaram Lift Irrigation Project. The 650-page report, recently given to the state government, revealed financial mismanagement and excessive payments to contractors building the project’s barrages.
Changes to contracts after the tender process led to unnecessary payments. These adjustments resulted in a price escalation of Rs. 1,342.48 crore. Additionally, contractors, including L&T, received undue benefits, totaling Rs. 612.51 crore.
L&T, responsible for the Medigadda barrage, benefited significantly from these overpayments. The Commission urged the government to investigate the financial dealings of the Kaleshwaram Irrigation Project Corporation Limited (KIPCL). This includes examining loan practices and compliance with borrowing laws for the construction of the Medigadda, Sundilla, and Annaram barrages.
The Commission also suggested a thorough review of how bills, especially those with price adjustments, were processed.
The report analyzed the project’s cost increase from Rs 38,500 crore to Rs 71,436 crore (as reported in a 2016 letter from the Chief Minister), with approvals rising to over Rs. 1,10,248.48 crore by March 2022.
Experts criticized moving the project from Tummidihetti to Medigadda, which wasted about Rs. 6,000 crore of previous work. The move also added costs for tunnel lining and land acquisition, totaling an extra Rs. 1,500 crore.
The report highlighted Off-Budget Borrowings (OBBs) by the KIPCL at Rs. 87,449.15 crore (as of March 2022), guaranteed by the state. These loans burden the state budget for repayment.
By September 2024, the principal and interest payments amounted to Rs 29,737.06 crore. The remaining principal is Rs. 64,212.78 crore, with an additional interest of around Rs. 41,638 crore. Loan funds were diverted for government use and margin money, adding further interest costs.
