CAG Report · Karnataka

What ails Irrigation in Karnataka – Recent CAG reports

Guest Blog by Himanshu Upadhyaya (

What ails irrigation in India is probably a frequently asked question. It was asked in an illustrative article in Economic and Political Weekly in mid 1960s. We are told many times that two aspects often make the planned benefits of irrigation go haywire, namely time over runs and (hence) costs escalation. However, their repeated use to explain missed irrigation targets could be misplaced. The correct diagnosis of what ails India’s irrigation might be found in questioning the norms and decision making process of such projects, if these projects are indeed the best options and who pays when they do not deliver.

Two recently tabled CAG audit reports[1], a performance review of numerous irrigation projects by three irrigation corporations – namely Krishna Bhagya Jal Nigam Ltd (KBJNL), Karnataka Neeravari Nigam Ltd (KNNL) and Cauvery Neeravari Nigam Ltd (CNNL) & an audit of Command Area Development Projects – point out that deficiencies that plagued these projects ranged from faulty survey and design, erroneous estimates, irregularities in tendering, violations infested land acquisition processes and tardy execution of works. Audit scrutiny of records revealed that in many works proper surveys and investigations were not carried out. Audit found some cost estimates to be inflated as there were errors in adoption of item rates and taxes. Audit also noticed that a crucial strategic blunder that led to irrigation potential not being created despite headworks – i.e. dam wall and storage standing in place – was non-synchronisation of different components and chainages. Audit review also noticed instances where the works underwent major changes after the contracts were awarded. Audit scrutiny also revealed non-compliance of statutes, contractual terms and conditions resulting in undue benefits to contractors and extra financial implications.

Performance review of Command Area Development activities covering the period of 2009-14 showed that a gap of 4.10 lakh hectares existed between irrigation potential created and utilized, as of March 2014[2], due to non-construction of field irrigation channels. Audit scrutiny had revealed that field irrigation channels were constructed only in an area of 2.25 lakh hectares (i.e. 30 percent of target) against cumulative target of covering 7.48 lakh hectares for the period 2009-14. Close examination of records also suggested that in 16 projects, 2.71 lakh hectares land did not get irrigation benefits, despite field irrigation channels being in place. This led to an estimated crop loss worth Rs 915.45 crores per annum. Performance audit of CAD also noticed that the objective of Participatory Irrigation Management (PIM) to ensure farmers’ participation in irrigation management and maintenance of command area, remained unfulfilled, as the water management was not being carried out by the water users’ cooperative societies.

Transparency in Public Procurement: Repeat, systematic violations with impunity

Audit scrutiny pointed out that despite having passed a legislation with a view to ensure transparency in public procurement of goods and services by streamlining the procedure in inviting, processing and acceptance of tenders, the provision of the act were not complied with. Audit had noticed that as per rule 17 of Karnataka Transparency in Public Procurement Act (1999), the Tender Inviting Authority shall ensure minimum bidding time of 30 days for works costing upto Rs 2 crore and 60 days for works costing above Rs 2 crore. The statute clearly stated that any reduction in this time frame had to be specifically authorized by an authority superior to the tender inviting authority with reasons to be recorded in writing. During audit scrutiny it was observed that:

  • CNNL had allowed less than 60 days (for works costing over Rs 2 crore) in respect of 30 works. In respect of other 4 works, CNNL had sought approval for reduction of bidding time under section 17 (2) of the Karnataka Transparency in Public Procurement Rules. However, the reasons for such a reduction of time were not kept on record.
  • In KBJNL, the stipulated period of 60 days was not provided for 8 works and in respect of other 3 works, the stipulated period of 30 days was not provided.
  • In KNNL, the stipulated period of 60 days was not allowed in respect of all the selected works.
  • Further, audit scrutiny also revealed that none of the companies had adopted the Standard Tender Document as prescribed by the Government of Karnataka.

The first issue that arises is that there is specific reason for assigning these time periods, these are being overturned in practice. Secondly, why do these agencies keep repeating the violations of these norms? Is it simply urgency every time as they claim or is this indication of deeper malaise? When we connect this with the continued gap in achievement of irrigation targets, it raises the question if there is much deeper & bigger corruption? Do we need more transparent, accountable, participatory governance norms? Unfortunately the CAG reports or the following actions do not go into these questions.

Responding to these audit observations, Karnataka government stated in a reply dated November 2014 that “due to urgency of work, the time limit prescribed could not be adhered to and this had approval of highest authorities”. The CAG audit report after quoting this reply states that “the reply is not acceptable as approval of higher authorities had not been obtained for the short term tender”. Should CAG have gone beyond stating the obvious?

Audit scrutiny also pointed out at two instances in projects by KNNL where process of acquisition of land was taken up after the works were awarded. KNNL had prepared the estimates for the construction of minor canal under Kamatagi distributary in December 2005 and went ahead with inviting tenders in January 2006 and awarded the work contract in the same month to a contractor with the stipulation to finish the work in four months. However, the land acquisition for this project was not initiated and audit scrutiny revealed that even the Section 4 (1) and 6 (1) notifications under the Land Acquisition Act were issues in April 2006/September 2009 and August 2007/ May 2010 respectively. The land compensation award to land owners was issued only in July 2009/ June 2010. In another instance, the work contact was awarded even as the authorities were aware that compensation under land acquisition act was not granted to landowners.

Now what is the reply that state government submits? CAG audit report tells us that in a reply dated November 2014, state government argued that “the situation was unavoidable as there were delays in payment of compensation to land owners”. Having got such a lame duck reply on record, CAG audit goes on to re-iterate that “the reply is not acceptable as notifications for acquisition of land were issued after awarding the work”. Should CAG not have named the responsible officers and should it not have recommended suitable action against them?

So having noticed these issues that plague irrigation projects, CAG of India recommends that the Government institute a mechanism of the tender issuing authority certifying that acquisition of required land, payment of compensation of obtaining of forest/ environment clearances have been completed before issuing the tender. There is also a question if the Auditor’s recommendations should suggest measures in rules and procedures so that no agency is able to keep repeating offences and get away with it.

Will state government respond to this recommendation positively? For answer to this worrisome question, we must wait for yet another performance review of irrigation projects in Karnataka. CAG auditors scrutinizing irrigation and hydropower projects in Karnataka may have come a long way since that performance review of Gerusoppa Dam, which this author had terms as exposing cracks in CAG’s scanner[3]. But how long will recommendations by CAG auditors be ignored without any consequences for those responsible and how long the civil society, media and judiciary not take up these issues to make the government accountable remain some moot questions.

Completed Sonthi Barrage Photo: KBJNL
Completed Sonthi Barrage Photo: KBJNL


[1] and

[2] At the end of March 2009, this gap was 5.65 lakh hectares.


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