Narmada project has failed to deliver: CAG
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Narmada project has failed to deliver: CAG

Latest report says that only 31% of Gujarat's villages projected to benefit from Sardar Sarovar Project have actually received its waters.

india Updated: Apr 11, 2006 15:52 IST

The latest Comptroller and Auditor General of India (CAG) report says that only 31 per cent of Gujarat's villages and towns projected to benefit from the controversial Sardar Sarovar Project (SSP) on the Narmada river have actually received its waters.

The audit report for the Gujarat government covering the year ended on March 31, 2005, makes damning reading even as environmental activist Medha Patkar of the "Narmada Bachao Andolan" (Save Narmada Campaign) and her supporters are protesting in New Delhi against the decision to allow a raise in the dam's height in central Gujarat.

The report reveals that the much-touted solution to the state's water shortage problem was not being implemented efficiently, contradicting Gujarat Chief Minister Narendra Modi's statement last week that Patkar's fast was threatening to delay the state's "lifeline".

The project commenced in 1999-2000 and was scheduled to be completed by 2002, but was lagging behind due to defective planning and lack of coordination among different agencies, the CAG said.

"Failure of GWSSB (Gujarat Water Supply and Sewage Board) as well as the consultant in monitoring the execution of works indicated ineffective internal control resulting in cost and time overrun and deprival of benefits to the targeted population," the report noted.

"As a result of delay in execution of works, the gross average daily intake from the Khirai off-take point (canal head in Saurashtra) during May 2003 to June 2005 was 145.17 million litres a day (29 percent) against the capacity of 500 mld (million litres a day). Of the envisaged coverage of 1,342 villages/urban centres, benefits reached only to 415 villages/urban centres (31 percent)."

The CAG also pointed to many irregularities in financial management of the mega project.

For the execution of a sub-project in the Saurashtra region, the Gujarat Water Infrastructure Company Ltd (GWIL), a state government body responsible for developing a branch canal to deliver waters, obtained a loan of Rs 750 million from Oriental Bank of Commerce, a state-owned commercial bank, at an interest rate of 11 per cent in January 2002 though it could have obtained a loan from the state-run Housing and Urban Development Corp at 10.75 per cent rate and with easier repayment options.

The report stated that the deal resulted in an additional interest outgo of Rs 173.7 million.

The GWIL's explanation that the finance was availed from the commercial bank "for building relationship for future project financing" was found by CAG to be "not tenable".

Among the significant points noticed in the audit, one was that not adopting standard bidding documents resulted in the termination of a contract with a cost overrun of Rs 1.25 billion and delay in execution of canal works in Jamnagar district of the Saurashtra region.

The audit found that an "irregular payment" of Rs 21.1 million was made to a contractor on excise duty and transportation of steel plates.

The report recommended that the state government ensure better financial management and closer monitoring of cash management to bring down the cost of capital.

It also recommended the state consider "setting up an independent water regulatory authority for controlling issues related to the water supply sector as a whole".

First Published: Apr 11, 2006 15:52 IST