Outflows to nowhere: How public money is lost on mega projects | Part 1

Outflows to nowhere: How public money is lost on mega projects | Part 1

When Kerala’s first hydroelectric project was built in Pallivasal 75 years ago, labourers still toiled with pickaxes and shovels and materials were hauled by elephants and donkeys. The project and the road to Munnar were completed within the scheduled timeframe. That was quite an achievement when compared to the pace of the projects in the 21st century.

Take, for instance, the Bhoothathankettu hydroelectric project. The 24-megawatt project was supposed to be completed within two and a half years. The works, however, are still ongoing after six years and eight months. Only 90 per cent of the work has been completed. The government keeps paying Rs 2.56 crore as salaries to the staff associated with the project.

The Thottiyar project, which had an original schedule of three years and four months, has not even reached the halfway mark after 12 years. About 22 staff responsible for the work draw a combined salary of Rs 3.82 crore every month.

When the Chenkulam project kicked off in June 2000, it was supposed to wind up within three years and four months. Then the timeframe was updated to 12 years and nine months. Only 70 per cent of the work has been completed so far.

Even stranger is the electricity project at Upper Kallar. The 2-megawatt minor project comes with a price tag of Rs 19.1 crore. A formidable workforce of an executive engineer, an assistant executive engineer, two AEs and six sub engineers draws a total salary of Rs 1.31 crore. The project is sure not to cover its expenses even if it manages to generate electricity and sell it.

Likewise, the Rs 35 crore spent on the Vellathooval small hydroelectric project has gone up in smoke. The project started in 2012 and completed in 2016. It was supposed to generate 12.71 million units of power but generation was stopped in 2019.

The lack of proper planning is evident in much of the work undertaken by the Kerala State Electricity Board (KSEB). The board incurred a loss of about Rs 1,000 crore with the construction of two diesel power generation plants at Brahmapuram and Nallalam. Both plants are not functional now.

The 25.77 million unit plant at Poonthenaruvi cost Rs 71.95 crore. The plant was inaugurated in June 2017 but its capacity has dwindled to just 16.20 million units. The plant wasn’t ready for five years and three months.

This lackadaisical approach is not limited to the electricity generation sector. All governments are eager to announce projects so that they can add it into their report cards before the next election. Few, however, possess the will to take the projects to timely completions.

Down the drain

The Chaliyar River Valley Project was envisaged with an aim to irrigate the farmlands of Malappuram and Kozhikode districts. The Irrigation Department put together an investigation team in 1980 for the purpose. As many as 94 personnel were put on the job across one division, three subdivisions and nine stations. However, the study and project-making were non-starters. The 94 staff did nothing for four years up to 1990. Though the project was revived, the study was completed only in 2002. After so many man-days and three shifts in the site of the proposed reservoir, the project is yet to take off.

Yet Rs 7.7 crore was spent on the project up to 2002, a public accounts committee of the Kerala Legislative Assembly has found out. The committee said in 2007 that the staff were getting paid for nothing and the money was spent irresponsibly.

At first, a division was formed to study the feasibility of building a reservoir. Then another division was formed to look into the digging of a canal. Though the staff were redeployed many times, one of the subdivisions is still retained at Nilambur, with 17 personnel headed by an assistant executive engineer. That subdivision is doing the modest work of building small regulators. Two regulators have been built in Odayikkal and Pookkottumanna.

The latest is a project proposal to build a dam on the Chaliyar River to prevent flooding. If the previous project is any indication, this would end up as another white elephant.

The Attappadi Valley Irrigation Project started in 1970 with a stated aim to dam the Siruvani River at Chittoor to irrigate the arid lands of Attappadi and for the distribution of drinking water. The basic infrastructure was put in place and employees were selected. An office and employees’ quarters were built. The land was acquired for the project. In 1989, however, the project stumbled into a roadblock due to the stiff resistance from Tamil Nadu over the Cauveri water dispute.  The project has eaten about Rs 10 crore. It is not yet dropped though. The same staff are being utilised for a new project being spearheaded by minister K Krishnan Kutty.

Wasted efforts

It is not unusual for various government departments to do the same work. Yet nobody seems to take an active role in preventing this wasteful overlap of work.

The Indian Meteorological Department is in charge of measuring the rainfall across the country including Kerala. Hundreds of automatic and manual equipment put in place by the IMD are actually operated by the employees of the respective district-level officers, either from the district collectors or taluk officer. In Tiruvalla and Devikulam taluks, the activity has come to a standstill for want of coordination from the respective taluk offices.

At the same time, there are separate government agencies at the state levels tasked with the same jobs, including the irrigation department, the electricity department, the agriculture department, the forest department and the groundwater department. The electricity department’s job is most crucial since it is in charge of observing the rainfall available in the catchment areas of the dams, which are crucial for forewarning of floods.

In practice, these recordings of rainfall are reduced to meaningless numbers in the annual reports of various departments. There is little coordination among the department that would ensure effective data analysis. Exact data on rainfall is essential for disaster management agencies to send out timely warnings about impending natural catastrophes, especially in our time when climate change is wreaking havoc with the weather systems.

The rain data collected by various central and state agencies never go into a single compiled form. IMD’s methodology of data collection sits oddly with that of the KSEB’s. The forest department will be employing some other method.

Half-cooked jobs

The Banasura Sagar was commissioned in Wayanad in 1979 to ensure total irrigation in Wayanad and Kozhikode districts. The project, however, is yet to be fully implemented even four decades later. Government policies not too favourable to canal irrigation and financial difficulties are blamed for the slow pace.

The incorporation of the Banasura Sagar into the Kuttiyadi hydroelectric project also worked against the dam. The construction of the dam across the Kadaman Thodu blocked water supply to the farmers in the vicinity. The government set in motion another project to address the water shortage in farmlands in two districts. Hectares of land was acquired for the project but those stretches have been left abandoned.

Even though the state government decided to revive the works on the irrigation canals in 2017, the execution of the work is snail-paced. A Banasura Sagar project officer is still functioning at Padinjarethara under an executive engineer. So far, the government has spent Rs 28.83 crore by way of employees’ salaries and other expenses related to the project.

Only 15 per cent of the project has been completed so far despite spending Rs 63.99, which includes the commissions payable to the contractors. Officers complain that there are no takers for the project even though they have invited tenders several times. A special tahsildar’s office was operational at Vellamunda in connection with land acquisition several months ago.

The Pallivasal model

Few ventures can beat the Pallivasal hydroelectric renovation project when it comes to unjustified expenses. The project, with a budget estimate of Rs 220 crore, was supposed to finish in 2011. The timeframe went up from four to 14 days as the estimate more than doubled. A team of 13 staff are working to finish the project on a war footing. They draw a salary of Rs 1.87 crore per year.

The renovation of the project is expected to generate an additional 60 megawatt of electricity. Even this target is unlikely to be met even if the project is completed. That amount of electricity could have been easily bought with the money spent on the 13 staff for 14 years. 

The project was 72.77 per cent completed in December 2016. It reached 82.60 per cent in three years and two months. It will take another four years and 10 months to complete the project. The 13 employees took home annual paychecks of Rs 1,87,43,316. The loss associated with the project should also include the price of the electricity that was not generated as planned for 10 years. That should be calculated on the basis of what the electricity board would have paid to an outside supplier. That’s the method adopted by the electricity board for its pitch for electricity charge increase before the regulatory commission.

Take your pick

The Kerala State Electricity Board frequently faces questions about the Pallivasal project’s progress. Strangely, the answers vary as time progresses.

In 2012, the board said that Rs 157 crore was spent so far on the project. The board said it needed another Rs 218 crore to complete the project. That it will be completed in December 2015.

In 2016, the board said that 72.77 per cent was completed and Rs 246 crore was spent on the project. The board estimated that it needed Rs 250 crore more. The board bought equipment worth Rs 42.55 crore and used machinery worth Rs 7.9 crore from it. In short, when the project was done 72 per cent, it had overshot the budget by Rs 275 crore and lagged the deadline by five years.

In February 2020, the same question was repeated and a different answer came about. The work was completed 82.66 per cent. The expenses stood at Rs 345.13 crore. Yet Rs 204.87 crore more was needed. The project is scheduled to complete in October 2021.

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