In a classic case of throwing good money after bad, the BJP-led government in Maharashtra has cleared cost escalations totalling more than Rs2,500 crore in the past 18 months for pending irrigation projects, most of them in the backward Vidarbha region.
Though this in itself is not illegal, documents available with HT of 72 projects show that most of the cost escalations have been granted without any scrutiny or even updating the paperwork done during the previous regime when the portfolio was with the Nationalist Congress Party, whose leaders stand accused of wrongdoing on a massive scale in irrigation projects.
The BJP-led government cleared the cost escalations by restarting the process of granting revised administrative approvals (RAA), which allow increases in the budgets for projects cleared earlier.
Water resources minister Girish Mahajan told HT the approvals could not be held back. “We have inherited colossal problems and we can’t start reviewing projects or cost escalation proposals from scratch. If we don’t give RAAs, project costs will only further increase making things further untenable. Currently, we are giving RAAs to pending projects whether they are 30 per cent, 40 per cent or 50 per cent complete.”
The RAA proposals by the water resources department were cleared at the state level following a go-ahead from the expenditure priorities committee led by finance ministry, which held meetings on August 21, 2014, April 9, 2015, and January 27 2016. HT got documents on the cost escalations from the water resources department under the Right to Information Act.
From March 2016 to August 1, 2016, 20 projects in Vidarbha got cost hikes worth Rs1,444 crore. This includes Lower Dyanaganga in Buldhana ,where cost has been increased from Rs30.45 crore to Rs159.55 crore, and Bawanthadi in Bhandara where cost has been hiked from Rs531. 26 crore to Rs867.20 crore.
Most of the hikes were approved at the state level until January 2016, after which powers were decentralised and given back to the irrigation development corporations set up in every region.
HT reviewed 54 such clearances given by the state and found out that the costs of 30 of these projects were updated based on scheduled rates (of material costs) dating back to 2007-08 to 2009-10. Five minor irrigation projects from Solapur district, a drought-prone region, were cleared based on scheduled rates dating back to 1999- 2000 and 2000-2001. Scheduled rates refer to the standard cost of material such as steel and cement, which is published each year by the government taking into account inflation.
Other than 11 barrages on the Painganga river in Vidarbha that saw a hike of Rs716 crore, none of the revised approvals were based on current rates.
While all the approvals were on the condition that the projects be completed in one year, officials admit that this cannot be done unless even more funds were released.
“This is a way of pocketing funds for the contractor and using up the existing budget. One expected the BJP government to change the way the water resources sector has been functioning over the last two decades by taking a real-time review of irrigation projects. Instead of cleaning up the mess, they are following the same old route and granting cost hikes without analysing real benefit for the region,’’ said Anil Kilor from NGO Jan Manch, which had filed the first PIL over the irrigation scam in Vidarbha that centered around illegal cost hikes.
That’s not all.
For 52 out of the 54 projects, the government order approving the cost escalation states that the hike was also due to change in project design. When a design of a project or its scope changes, like in the case of the controversial Balganga dam in Konkan (the first charge-sheet has been filed in this case), the project has to be ideally considered afresh.
The result of the cost and time over runs is a poorer cost-benefit ratio as is the case of projects such as Bewartola minor irrigation project in Gondia and Amdapur minor irrigation project in Yavatmal, where it is barely over 1 at 1.1 and 1.04. The projects saw a cost escalation of Rs48 crore and Rs29 crore.
Pradeep Purandare, water expert and former associate professor with Water and Land Management Institute (WALMI), said, “The state government needs to first put in place an integrated state water plan promised in a law cleared way back in 2005 and then it can revise projects. The government has not even put in place a separate manual for the irrigation sector to grant RAA. Instead it is giving the go-ahead to cost escalation proposals prepared by the earlier government, which are suspect. The government’s priorities are clearly skewed.’’
How the state government plans to complete pending projects worth Rs80,000 crore when its annual budget is only Rs7,000 crore, the bulk of which goes in meeting cost escalations, is not clear.