5 major Irrigation Projects Nowhere Near Completion Even After an Expenditure of Over Rs. 13,000 Crores: CAG

Despite incurring expenditures over Rs.13,000 crores till March 2017, five major water resources and irrigation projects, having strategic national interests, are far behind the completion mark due to various reasons, including poor contract management and administrative delays, according to the Comptroller and Auditor General (CAG) of India.

These five national water projects are Indira Sagar Polavaram project in Andhra Pradesh, Gosikhand irrigation project in Maharashtra, Shahipur Kandi dam in Punjab, Saryu Nahar Pariyojna in Uttar Pradesh, and Teesta Barrage in West Bengal.

Coming down heavily on the Ministry of Water Resources, River Development and Ganga Rejuvenation, the CAG, in its latest report, observed that the poor implementation of the important projects was adversely impacting strategic national interests. These projects have also been unable to reach a stage where the benefits of power generation, drinking water and reservoir creation can be delivered.

One of the primary objectives of National Projects is to enhance agricultural productivity by creating irrigation potential and water availability in covered areas.

CAG noted that the shortfall in terms of physical progress in different components of the projects ranged from eight to ninety nine percent in the five projects under implementation, along with an overall cost escalation of 2,341 percent that threatened the economic viability of the projects.

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In February 2008, the Centre approved a scheme of national projects under which it identified 16 major water resource development and irrigation projects that were under the Accelerated Irrigation Benefits Programme (AIBP) but were languishing due to various constraints and hurdles including land acquisition, inter-State coordination, financial constraints, and issues relating to rehabilitation and re-settlement of the affected population.

The performance audit covered the period from April 2008 to March 2017. For the same purpose, the records and documents at the Ministry of Water Resources, River Development and Ganga Rejuvenation, and the Central Water Commission (CWC) were examined, along with records in the states of Maharashtra, Punjab, West Bengal, Uttar Pradesh, and Andhra Pradesh. The audit also visited select sites for joint inspection to arrive at conclusions.

In a critical observation of the execution of the national projects for the period of 2008-17, the federal auditor noted that the execution of the projects was marked by administrative delays, non-adherence to codal provisions and rules stipulated in the relevant work manuals for execution of such works, poor contract management, and lack of effective and timely monitoring. Taking note of the cost escalation due to delays, it has observed that while the original cost estimate of the five projects was Rs.3530 crores, the current cost estimate is Rs. 86,172.23 crores.

“Poor implementation of the schemes has adversely impacted strategic national interests”, CAG stated in the report tabled in Parliament.

The fundamental objective of the scheme was to ensure coordinated and focused action to expedite their execution and ensure their early completion. A performance audit of the scheme brought out that this fundamental objective remained unachieved though an expenditure of Rs.13,299.12 crores had been incurred on the five projects as of March 2017.

Out of the 16 national projects, only five projects with estimated Irrigation Potential of 25.10 lakh hectares were under implementation. In these five projects, 14.53 lakh hectares Irrigation Potential has been created, but a mere 5.36 lakh hectares (37 percent) Irrigation Potential is being utilised.

CAG also observed that the remaining 11 projects with an estimated irrigation potential of 10.48 lakh hectares are yet to commence and are at different stages of approval.

The five projects under implementation have not been able to reach a stage where the benefits of power generation, drinking water and reservoir creation can be delivered, except the creation of 0.53 Million Acre Feet storage in Gosikhurd project, the report stated.

The cost escalation in the five projects before their inclusion in the scheme was Rs.32,802 crores. However, since their inclusion as National Projects, two projects namely, Indira Sagar Polavaram project and Gosikhurd project, have alone registered a cost escalation of Rs.49,840 crores.

The remaining three projects have already overshot their approved completion time and none of them is near completion.

CAG has pointed that the tardy implementation and cost escalation was attributable to management failures and deficiencies in terms of non-adherence to codal provisions relating to survey and investigations that are essential ingredients for preparation of 3 detailed project reports, ensuring statutory clearances for the project sites and administrative delays in land acquisitions, which resulted in an additional cost of Rs.903.67 crores.

This was compounded by inefficient rehabilitation and resettlement measures that further hindered the progress of these projects, resulting in an additional expenditure of Rs.1,331.91 crores due to revisions in agreements, and Rs.82.35 crores on account of payment of interest arising from delayed payment of compensation.

CAG has found that the failure of the project authorities—to ensure compliance with and enforce contract terms—led to the non-recovery of Rs.32.16 crores from defaulting contractors as well as a cost escalation of Rs.224.54 crores.

The departmental authorities also released Rs.72.13 crores to contractors over and above the agreement terms on the ground of urgency or to expedite work. Further, deviation from codal provisions and tender/agreement terms provided no assurance to the transparency and objectivity of the process of selection of contractors, award of works, and their execution. In none of the five projects under implementation had any proposal for Command Area Development works been sent to Central Water Commission for approval.

In the absence of a hand-in-hand implementation of Command Area Development works providing last mile connectivity through distributaries, irrigation potential would not be utilized, even if the projects are completed, CAG observed.

Lastly, CAG pointed out that the lack of adequate and effective monitoring, and timely action to deal with breaches and damages have further contributed to the poor progress of works as well as inadequate maintenance of assets that have already been created.

In view of their national importance, CAG has recommended that these projects may be taken up in a mission mode with nodal officers at the central level to effectively monitor the progress of the projects under implementation, and remove bottlenecks in coordination with the state authorities.