CAG flags delays, tendering, financial management flaws in Yettinahole project implementation

Stating that the project faces financial uncertainty regarding raising Rs 7,954.63 crore required for completing, the Comptroller and Auditor General also said that despite very large expenditure of Rs 15,297 crore over 12 years, the envisaged objective of providing drinking water facility to Chikaballapura and Kolar districts remained unattained.

The CAG has flagged delays, flaws in tendering and financial management in the implementation of Yettinahole Integrated Drinking Water Project, at a total cost of Rs 23,251.66 crore. Stating that the project faces ''financial uncertainty'' regarding raising Rs 7,954.63 crore required for completing, the Comptroller and Auditor General also said that despite very large expenditure of Rs 15,297 crore over 12 years, the envisaged objective of providing drinking water facility to Chikaballapura and Kolar districts remained ''unattained''. The CAG report on ''Implementation of Yettinahole Integrated Drinking Water Project'' was tabled in the Legislative Assembly by Minister Priyank Kharge on behalf of the Chief Minister Siddaramaiah. The audit covered the period of 2012-13 to 2022-23. The Project, envisaged diverting 24.01 TMC water from Yettinahole stream and its tributaries which originated close to Sakaleshpura in Hassan district to Chikkaballapura and Kolar districts. Initially implemented through Karnataka Neeravari Nigam Limited, it was transferred in November 2016 to Visvesvaraya Jala Nigam Limited (VJNL). ''The Detailed Project Report (DPR) of the Yettinahole Integrated Drinking Water Project was revised twice, from the originally approved (July 2012) Rs 8,323.50 crore to Rs 12,912.36 crore in February 2014 and again to Rs 23,251.66 croce in January 2023,'' the report said. The works were taken up since March 2014, in various packages to be executed in two phases, it said. However, project works are still under progress and far from completion and intended benefit delivery. ''Surprisingly, none of the DPRs envisaged targeted date of completion of the project. Based on audit observation, the Board of Directors of VJNL decided (in October 2023) to fix the target date of completion of Project as 1 November 2026,'' it added. According to the report, the project suffered from financial constraints as the government provided only 25 to 54 per cent of the budget requirements for during the period 2018-19 to 2022-23. ''The request of VJNL in June 2023 for availing fresh loans required for completing the remaining works of the project was awaiting approval from the Government . Resultantly, as of March 2024, VJNL faces financial uncertainty regarding the Rs 7,954.63 crore required for completing the project,'' it said. In Contract Management, the audit noticed deficiencies in tendering process such as non-adoption of standard tender document, non-assessment of bid capacity of contractors and insufficient bidding time for high value contracts ranging from Rs 87.08 crore to Rs 1,135.03 crore. ''Eighty percent of the works were awarded to the contractors without evaluating the financial capability, bid capacity and work experience. This posed the risk of non-completion of the work on time. Further, 67 per cent of the works worth Rs 14,805.80 crore were awarded to only seven contractors and one contractor was awarded 11 contracts amounting to Rs 5,216.58 crore. Audit also observed instances of undue favours to contractors such as non-recovery of excess provision of pipe materials, additional payment for works which were part of turn-key contract, untimely release of retention money/performance security, irregular advance payments for supply of pipes and non-recovery of benefits accrued to the contractors due to implementation of Goods and Services Tax Act, it added.

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