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Response of Irrigation & Command

Report on

Jalayagnam
Vol. 1

Irrigation & CAD Department. Government of Andhra Pradesh

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Table of Contents
Sl. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Over view Audit Frame Work Planning Selection of Process Assessment of water resources Project formulation Requirement of Power Provision of Standby Pumps Benefit - Cost Ratio Inter-State issues Project Approvals Taking up of Projects without fulfillment of Pre-requisites Tendering and Contract Management Empanelment of Contracting agencies Cartelization/Suspicious and unfair tendring practices EPC System of Contracting Reference to Name of the Para Paragraph 1 2 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4 4.1 4.2 4.3

Go To Contents RESPONSE TO EXECUTIVE SUMMARY AND OTHER GENERAL CHAPTERS OF DRAFT PERFORMANCE AUDIT REPORT ON JALAYAGNAM Performance Audit Report on Jalayagnam taken up by O/o the Principal Accountant General (G&SSA), Andhra Pradesh is expected to be an important document suggesting to the State Government in general, and I&CAD Department particularly, various measures for improving implementation and monitoring of Jalayagnam projects. However, it seems that this Draft Report is a mere repetition of facts (truths) furnished by the Department, half truths (such as no inter-state agreement between Andhra Pradesh and Maharashtra over Dr BR Ambedkar Pranhita Chevella Sujala Sravanti Project) and misconceptions (lack of transparency, changes in the scope of various projects without taking adequate safeguards, EPC mode of contracting loaded in favor of contractors) prevalent in the public domain ever since inception of this Program. Apparently, the draft Report has not come out with constructive suggestions and had glossed over the realm of public policy, constrained faced by, and reasons for taking certain actions as articulated by the Department from time to time in the relevant para such as in the several meetings of Public Accounts Committee (PAC). Most of the information given in the draft Report including line diagrams, photos, and material of various other places had been provided by the Department. Quoting such information in the draft Report, without any proper acknowledgement or referencing could be constructed as intellectual misappropriation.

Go To Contents I&CAD Department sincerely expects at least for now, the information given in the accompanying document will result into suitable modifications of the draft Report. In any case, the version given by the Department shall also be included before passing any verdict in the final Report. It is also expected that the final Performance Report on Jalayagnam will also appreciate constraints faced by, and corrective steps taken by the Department from time to time. The final Report will not be a mere indictment and will also come out with the concrete constructive policy and other suggestions to be implemented at the Government and field levels. Genesis of the Projects under Jalayagnam It is important now, to explain how a project is approved and implemented in the public sector. In this connection, the first and foremost is the felt need for having such a project. Based on felt need, techno-economic feasibility and viability of a project is assessed. Only such viable projects after obtaining necessary financial concurrence go through a process leading to the administrative approval. Those projects having techno-economic viability, financial concurrence and the requisite political will (with technical and administrative sanctions) are implemented. This entire process is not static but a dynamic one based on the analysis of ground realities. This often, leads to variations between line and detailed estimates. It does not mean that one is correct and other estimate is inflated or incorrect (unless supported by corroborative evidence). Any one conversant with basic project management, knows that even detailed estimates (thats why called estimates) depend upon a number of variables such as designs etc., that evolves over a period of time. Before pronouncing any thing 4

Go To Contents fishy, the concerned agencies are supposed to verify facts, try to appreciate reasons and come to an informed conclusion. Detailing is possible to an extent and no system can take into account several emerging internal and external factors. In addition due to various reasons, a few projects though, having necessary administrative sanctions are not grounded for quite some time. As and when such projects are grounded, it leads to inevitable cost escalation. However, such incidents are part of contemporary public policy. Table 1 below gives a comprehensive picture of all 86 projects including 4 projects yet to take off though all taken up under Jalayagnam. Table 1: No of projects sanctioned in a financial year and Amount of Administrative approval of these projects (Amt. in Rs. Crs.) SN 1 2 3 4 5 6 7 Financial No. Year Prior to 2003-04 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Projects 8 4 36 6 3 10 15 82 of Original Sanction 785.15 1353.89 71727.14 2397.16 4643.68 11313.17 75488.48 167708.97 Source: PMU of I&CAD admn.

In addition to the above 82 projects, due to various reasons 4 works sanctioned in 2008-09 amounting to Rs.17900.69 crores under Jalayagnam had so far, not been grounded. Some of the other projects such as Head works of Indira Sagar Polavaram Project (ISPP), delta 5

Go To Contents modernization and flood banks though, grounded had not yet been let out to the full extent of their administrative approval. As it could be seen from the Table 1, Jalayagnam is meant not only for sanctioning new projects but also aims at completing projects languishing even before the launching of this Program prior to 200405. Prior Scrutiny of Jalayagnam Projects by PAC It is pertinent to mention that in the last 4 to 5 years many of the irrigation projects taken up under Jalayagnam had already been audited by the Principal AG and as well as, also examined by the Public Accounts Committee (PAC). The department had also furnished detailed information on various irrigation projects to the Secretariat of AP Legislature as desired by the PAC as per details given in Annexure I. It goes without saying that Principal AG and other officials of the O/o Principal AG were active participants in all the PAC meetings. The copies of these documents were also as well, handed over to the Principal AG. Some of the issues raised in the draft Performance Audit Report had been deliberated upon, and a considered view had already, been taken by PAC on certain substantive issues. It defies the conventional logic and rationale of once again raising these issues in the form of a consolidated draft performance report even after the superior body (PAC) had examined several related issues including CAG paragraphs. However, the point wise detailed rebuttal is given in the successive paragraphs of this document. 6

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The stand of department had time and again, been articulated in the PAC meetings and is reiterated even in this document. In view of enormity of Jalayagnam projects (both in terms of numbers and size), the department resorted to parallel processing of the desired set of actions. This approach is different from the sequential processing approach articulated by the O/o PAG. In other words, PAG essentially suggests so as to first complete the design, investigation and survey of the projects to be taken up; do the land acquisition (including acquisition of forest land, wild life sanctuary etc.); then go for various statutory clearances (in principle site clearance from MoEF, stage one forest clearance, deposit Net Present Value of forests and cost of compensatory afforestation; seek stage 2 forest clearance, obtain approval of the wild life board, clearance of Ministry of Tribal Affairs, go for approval of various directorates of Central Water Commission, TAC clearance of Ministry of Water Resources, and lastly investment clearance from the Planning Commission) before awarding the work to various contracting agencies. This suggestion is too simplistic to follow; and also overlooks contingencies arising out of various court cases and other litigation; and suggests uniform process for all the irrigation projects. Several passing comments had been made such that investment clearance from the planning commission for the projects on interstate rivers and their tributaries is mandatory; taking up execution of projects without obtaining investment clearance is not only violative of the constitutional provisions, but is also likely to run in to trouble at the time of releasing water since Andhra Pradesh is down stream state for most of these rivers etc. Year wise analysis of river water going 7

Go To Contents into Bay of Bengal (Table 2) indicates huge variations. It is once clarified that there is no legal or constitutional hurdle for the lowest riparian state to plan and implement certain flood water based irrigation projects. Table 2: Variations in Annual flood flows of major rivers in Andhra Pradesh (surplus discharges in TMC) Name of the Maximum 6081.07(199495) 1329.304(199495) 197.268(200607) 117.18(2001-02) Minimum 682.4(2009-10) 2.281 (2002-03) 31.561(2000-01) 0 ( in many years) Source: EnC (Irrigation)

River Godavari Krishna Vamsadhara Pennar

Allegation that no comprehensive study was undertaken by the State Government before taking up Jalayagnam to review (1) the quantum of utilizable water available to state (2) quantum of water being utilized by the existing projects (3) balance water including flood water available for utilization in new projects is strongly refuted. The comment that there was no evidence to indicate that the flood data of Krishna and Pennar rivers was analyzed to access the average number of days where flood flows are available annually and average annual total flood discharge is also out of place. As every river basin is unique and is different from any other basin, the question of adopting uniform 8

Go To Contents number of flood days for designing the projects that use flood flows does not arise. There is also a lot of criticism in the Draft Report about the Engineering, procurement and construction (EPC) system as adopted by Andhra Pradesh for Jalayagnam projects. It is incorrect to say that the tendering and contracting process lacked transparency and financial interest of the state for not safe guarded. The following steps taken by the Department for system improvement, increased transparency and better quality control further reiterate evolutionary EPC system: Measures taken for system Improvement: Jalayagnam, being an ambitious task with unprecedented level of challenges in implementation, the State Government had from time to time, taken several conscious decisions to streamline and improve the overall procurement process for ensuring timely execution of works with quality and overall transparency. (i) EPC Methodology: Keeping in view, the available manpower in Government

the department as well as complex technical nature of the works in terms of design and introduction of latest technology, took a decision to go with internationally recognized and proven EPC methodology. The same methodology has also been used by some of the large Government of India Institutions. Major and medium projects were in turn divided into different packages. This was to ensure that major construction companies take up such work and bring in the latest technical know-how at a competitive price /rate. Under this system, the agency awarded with the work, has to take up 9

Go To Contents the investigation, survey, designs and construction of their package on a turn key basis. In this system there will not be any scope to account for deviation of quantities, revision of estimate etc. The EPC system adopted in Andhra Pradesh was however, different from internationally recognized EPC on more than one count. Internationally, there is no cap on the tender premium. However, it was fixed at 5% and any tender over this cap was bound to be rejected in Andhra Pradesh Model. Similarly, tender value quoted below a certain percentage of IBM, the bidder is expected to provide additional performance security. Under the Andhra Pradesh system the price adjustment provision is followed in respect of only 4 components Steel, Cement, POL and Metals used in Electro Mechanical components; while global EPC allows for price adjustment for all components including that for labor and material especially, beyond agreement period. Another positive aspect of EPC methodology is that investigation and design for the complete project is taken up. Tenders have been called for all the projects, keeping in view that project conceptualization can be done comprehensively this way. It has also facilitated timely and speedily requisitions being given to land acquisition authorities as there are several EPC agencies conducting survey and investigation. It also ensures that land is available in advance and government need not face constraints of non availability of land at critical stages of projects when the costs will be higher and projects will be delayed. targeted dates for completion of the projects under this system. (ii) E Procurement: The entire tender process has been made It has been attempted to match the milestone fixed, financial outlay and

through a well established e-procurement process where, all the 10

Go To Contents information is available on line. Guidelines in consultation with IT department are being followed. (iii) Rationalization of Internal Bench Marks (IBMs) .: A high level technical committee looks into finalization of IBM for all these EPC packages consisting of Advisor/ Senior Technical Officers to the Government, Chief Engineer, Central Design Office and concerned Project Chief Engineer. This is to ensure the rationalization of estimates for consistency and uniformity in the approach. The central design office had also communicated certain standard drawings, designs and specification to all concerned for bringing uniformity, reducing errors and cutting down delays. (iv) Institutional & Administrative Mechanism: A State Level The committee consists of Engineer-in-Chief, Chief The

Standing Committee undertakes technical and financial evaluation of the bids received. Engineer, Designs; and Commissioner of Tenders, Chief Engineer (Projects) and a representative of Finance Department (DFA). recommendation of this state level Technical Evaluation Committee is further examined by the High Power Committee/ Committee of Secretaries. All the major packages beyond Rs 100 crores go to These High Power Committee which is chaired by the Chief Secretary.

recommendations are taken into consideration by the Government before acceptance of bids. An Advisory committee has also been constituted to deliberate upon technical issues and also opine upon provisions of agreement as to an item of work is covered in it or not. They also brainstorm on further improvements.

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Go To Contents (v) Land Acquisition: Over 6 lakh acres land for both projects site

and submergence area had been acquired by I&CAD Department for Jalayagnam project through the methodology of consent award. This prevents litigation and future cost escalation. Innovative arrangements for expediting land acquisition were made by constituting District & State level negotiating consent Committees and with suitable free land delegations acquisition. facilitating awards litigation

However, this step had not overcome litigations due to political and other reasons. Despite taking all the possible care, some critical patches of land acquisition are still sub-judice. (vi) Quality Monitoring Systems (Involvement of independent

agency, multi-pronged approach): The Government has given the utmost importance to the maintenance of highest standard of quality in all these works. Detailed quality guidelines have been issued to the field Engineers and close monitoring of quality standards have been ensured. The present arrangement vis--vis monitoring of quality has multi-pronged approach involving a combination of three agencies. a. EPC agencies in the first instance, are themselves responsible to set up a quality control lab conducts certain tests and keep this record available for scrutiny. b. c. Departmental Quality Control Agency Third Party Quality Control Agencies a novel idea of engaging reputed professional agencies who are independent to monitor the quality execution of works. These agencies have been selected at State level through a transparent open bidding system, and they do not depend upon the payment of their bills on the project authorities as they draw their payment at state 12

Go To Contents level. The Government also decided to create posts of Chief

Engineer, Quality Control for different regions. In addition to these agencies, quality is also checked up at random by the Vigilance & Enforcement wing as well as, by the Advisors to the Government and other senior technical officers. been visiting these works. (vii) Transparency: On line sharing of information has been put in place to bring further transparency and encourage involvement of public at large in the day-to-day progress of execution of works as well as maintenance of quality standards. Special software has been developed for project monitoring as well as quality monitoring and they have been made available online to the general public through web page through Centre for Good Governance (CGG), Hyderabad. The feedback boxes were also kept at different public offices throughout the State. (viii) EPC Codes-A compendium of instructions on EPC was Many prominent experts from IIT and other reputed institutions have also

developed and shared with all concerned to bring clarity. A separate chapter on EPC was also annexed to the existing PWD codes following due process. (ix) Financial Management Projects had been prioritized for early completion in consultation with the Finance Department. The Department had also taken steps to complete 13 projects and ensure utilization of partial benefits from another 23 projects. However, by very nature of irrigation projects, benefits commensurate with financial 13

Go To Contents expenditure can not always be achieved unless the entire project is completed. The year wise budget and expenditure on Jalayagnam projects is given in Table 3. It would be pertinent to point out that budgetary releases were a major constraint on the overall expenditure. As on 29th Febuary 2012, 13 major and medium irrigation projects have been completed creating new IP of 1,37,254 acres and stabilization of another 1,89,379 acres. In another 21 projects water has been released to 14,37,995 ac of new IP and stabilization of 2,06,853 acres. By doing systemic improvements, an additional ayacut of 1,18,374 ac has been achieved under four old projects. Thus the total new IP created under major and medium irrigation projects under Jalayagnam is 16.936 lakh ac and another 3.962 lakh ac had been stabilized (Total 20.899 lakh ac). Table 3: Annual Budget, Expenditure & Irrigation Potential created under Major & Medium Irrigation Projects (2004-05 TO 2011-12)

S.No 1 1

Financial Year 2 2004-05

Budget

Expenditure

Irrigation Potential (Lakh Acres) 5 1.10 (New)

(Rs. In Crs.) (Rs. In Crs.) 3 4,246.00 14 4 3,331.00

Go To Contents 0.10 2 3 4 5 6 2005-06 2006-07 2007-08 2008-09 2009-10 6,374.00 10,042.00 13,014.00 16,511.50 17,813.33 6,569.00 9,109.00 12,039.00 10,002.29 12,154.88 1.80 3.52 0.79 3.49 1.12 4.39 1.08 0.89 0.19 7 2010-11 11,000.00 9,627.07 0.93 0.19 8 2011-12 15,010.04 11,369.49 0.78 0.04 Grand Total 94009.04 74,202.85* 16.936 3.962 20.898 (Stab) (New) (New) (Stab) (New) (Stab) (New) (Stab) (New) (Stab) (New) (Stab) (New) (Stab) (New) (Stab) Lakh

Acres About Rs.61,500 Crores had been spent on Jalayagnam projects.

Total IP created (New+Stab)

The programme of Jalayagnam has been mainly based on financial resources of the state government. Currently, 22 major and medium irrigation projects under Jalayagnam are supported by Government of India (GOI) as Accelerated Irrigation Benefit Programme (AIBP) projects. One project namely, Indira Sagar Polavaram Project (ISPP) is currently under consideration of GoI for declaring it as a National Project. In principle clearance for according National Status to Dr BR Ambedkar PCSS project is also expected from GoI.

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Go To Contents Despite the financial constraints, efforts have been made to prioritize the projects and complete them as per agreements and the Action Plan for completion of various ongoing projects has been prepared by the I & CAD Department. A large number of projects are at advanced stage. above 50% level. Approximately half of these projects are The action plan has been prepared in detail

taking into account the present physical progress of works, clearances, land availability, other constraints etc. and with a focused approach on those projects which can be completed. Constraints The projects taken up under Jalayagnam are not being completed as per target in view of paucity of human resources (Table 4). There are 5 posts of ENCs, 33 posts of CEs and 88 posts of SEs. In view of various court cases, only in-charge arrangements are made to these posts instead of regular promotions. In addition, frequent change of incumbency of officers at different levels due to transfers / in-charge arrangements / retirements, there is no continuity and the successors are unable to take timely follow up action to sustain the tempo of works. As a result the progress is hampered and the targets are not met with. It is, therefore, suggested to collect the up to date project/package wise particulars for appraisal and to take appropriate follow up action. The need for continuation of third party quality control agency in full scale/ with reduced staff/ termination as per agreement conditions by entrusting balance work to the departmental quality

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Go To Contents control staff has to be reviewed as full time Chief Engineer Q.C with his staff is in existence at present. Table.4: Availability of Technical Officers in I &CAD Department
Sl. No 1

Posts EE 447 sanctione d posts DEE 1578 sanctione d posts AEE 5846 sanctione d posts Vacanc ies

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

Nil

236

Nil

283

31

242

92

vacanci es

35

378

293

301

35

423

71

183

201

vacanci es

1276

1374

2515

1693

502

1030

2673

1567

488*

* 1111+1300 (2411) Assistant Executive Engineer posts notified to APPSC for Direct Recruitment. All the activities of the Department are reviewed by various officials from time to time and corrective actions are taken. In addition to periodic high level reviews by Honble Chief Minister and Minister (M&MI), all developments pertaining to Jalayagnam projects are informed by the Department to the State Cabinet at an interval of at least once in two months. Most of the Jalayagnam projects were taken up in the drought prone district of Andhra Pradesh which had witnessed continuous labour migration, decline in agricultural activity, farmers indebtedness and suicides. As a remedial measure to this decline Prime Ministers rehabilitation package for these districts in the state of Karnataka, Andhra Pradesh and Maharashtra was initiated. Irrigation project became a major activity in these districts to assure water to the crops 17

Go To Contents to check the decline in the farming activity in these districts. All the medium Irrigation Projects in the drought prone district and some of the major Irrigation Project like PCLIS. Dummugudem Tail pond were therefore included in the Prime Minister relief package for these districts. Therefore, the reason for simultaneously launching of the projects must not be lost sight of while evaluating the various factors like, preparation of DPR, time line for launching of the project finances etc., If these reasons are kept in view, then many of the findings of the audit can be explained, as to why Government of Andhra Pradesh took up projects on a such a large scale in such as short time. The nature of problem required urgent measures, which became the genesis for taking up these projects. The existence of farm land at a higher contour than the water levels in the rivers, the position of Andhra Pradesh being a tail end state for both Krishna & Godavari rivers directed the state Government to explore for solution through available technology of lifts and big motors and pumps. When technology and resources are available then not directing them to bring relief to the farmers would have been incorrect. We can produce power in a desert, but we cannot produce water. Therefore, the whole launching of Jalayagnam was directed by the emerging situation in the drought prone district of Andhra Pradesh. This requires to be kept in view while assessing the performance of Jalayagnam. In nutshell, PAG is requested to consider the information given in this document for finalizing the final performance report, duly considering 18

Go To Contents the criteria, as given in the draft performance report. The performance of the entity has to be Judged against a criteria through a methodology mutually agreed between the audit and entity. In this case, although audit has pointed out at many places shortcomings, at no place, there is a conclusion arrived after judging against a criteria i.e., a Government order, codes or even a model for undertaking such projects. In the absence of the performance being judged against a criteria, the whole report appears as on exercise in piecemeal collecting evidence and arrive at conclusions without stating, which codes, rule, order, GFR has been violated or ignored while grounding projects. Therefore, it would be correct to suggest that all the finding be subjected to the criteria as already indicated, then we can arrive at final conclusion, which would also be correct and then recommendation can be made to improve the performance to attain the policy objectives of Jalayagnam. Our replies for each finding is given. We would expect our replies to be given equal printing space along with the findings while the final report is being submitted to the legislature. The findings of audit and the reply of entity should be given in equal measure and detail, even if the audit does not agree with the replies given. Then only findings and final conclusion will carry conviction and will be fair to the entity. With these remarks on detailed reply is submitted. Annexure-A

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Go To Contents As per the report of the C & AG of India of Government of Andhra Pradesh, the details of the Performance Audit under gone since last 6 years are as follows: C & AG Report Year ended 2004-05 2005-06

Sl.No. 1. 2.

Gist of the paras Performance Audit Not Conducted Performance Audit Not Conducted Godavari Water Utilisation Authority (I) J.Chokka Rao Devadula Lift Irrigation Scheme (JCRDLIS) (II) Sripadasagar Project (SSP) (III) Alisagar Lift Irrigation Scheme (ALIS) (iv) Arugula Rajaram Gupta Lift Irrigation Scheme (ARGLIS) (V) Lendi Project and (vi) Dummugudem Project consisting of Rajeev Sagar and Indira Sagar Lift Irrigation Scheme. Performance Audit Not Conducted

Audit Para No.

3.

2006-07

3.2 (Pg.Nos.56-71)

4. 5.

2007-08 2008-09

Third Party Quality 1.3 Control/Assurance (TPQC) in (Pg.Nos.50-63) execution of Irrigation projects: AMRP, Pulichinthala, Telugu Ganga Project, AVR HNSS, Veligonda Project, Komarambheem, Palemvagu, Kinnerasani, Thotapalli, Peddagadda, Tarakarama Theerthasagaram, Jhanjavathi Project, Somasila Swarnamukhi Link Canal, Pushkara, Venkatanagar LIS. Accelerated Irrigation benefit Programme: In Andhra Pradesh, 30 Major/Medium 20

Go To Contents Irrign. Projs. and 67 MI Schemes were identified under AIBP. 1.SRSP Stage.I 2.Annamayya proj 3.Priyadarsini Jurala 4.Somasila Project 5.Nagarjunasagar 6.Madduvalasa 7.Gundlavagu, 8.Maddigedda, 9.Kanpur Canal, 10.Yerrakalava, 11.Vamsadhara Ph.I, 12.Flood Flow Canal of SRSP, 13.SRSP-II 14.Tadipudi LIS, 15.Pushkara LIS, 16.Rallvagu, 17.Gollavagu, 18.Mathadivagu, 19.Peddavagu, 20.Gundlakamma Reservoir, 21.Velligallu Reservoir, 22.Alisagar LIS 23.J.Chokarao LIS 24.A.R.Guthpa LIS, 25.Nilwai 26.Khomram Bhim 27.Thotapalli barrage project. 28.Tarakarama Thirtha Sagaram Proj. 29.Swarnamukhi Medium Irrigation Project, 30.Palemvagu and 67 Minor Irrigaaation Schemes.

6.

2009-10

Mahatma Gandhi ( Kalwakurthy) Lift Irrigation Scheme

2.2 ( Pg.Nos.3246 )

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3.Planning: 3.1 Selection of projects: Go To Contents Andhra Pradesh is a predominantly Agrarian State similar to many other large states in India. A Majority of the population (More than 70%) depends and derives their livelihoods and sustain on Agriculture and Agro based activities. The growth of the State economy and majority peoples well being therefore depends to a large extent on the continuous growth and expansion of sustainable Agriculture Sector. The Single most important input for sustainable Agriculture is water, which is primarily dependent on normal or good monsoon rainfall. It is observed that in normal rainfall years also, agriculture yields depend on timely incidence of Rainfall both in terms of quantity & quality. The effect of deficit rainfall is virtually crippling Agriculture Sector to a large extent in the State. The Disastrous consequences of continuous drought during 2000 to 2004 had broken the entire rural Agriculture based economy of the State. The districts affected due to droughts are as follows

District

Total Manda ls

2000-01

2001-02 23

200203

2003-04

200405

Srikakulam Vizianagara m

38 34

16 17

38 34

28 34

11 11

8 6

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3.3.1 Feasibility studies: Vamsadhara Stage-II Phase II Go To Contents This project is a part of Vamsadhara Stage-I which is cleared in all aspects. As the Government of Orissa is objecting to the construction of Barrage from view point of submersion, the project could not be taken up. As such the phase-II component has been proposed without head works but with side weir channel. In view of that there is no difference in the status of availability of water and ayacut to be benefited. That is the reason why the project has been taken up with the reports already prepared by the Department. CBR Lingala Canal: The Chitravathi Balancing Reservoir is an existing reservoir to store 10 tmc Water. This balancing Reservoir is a part of TBPHLC system and is intended to stabilize the ayacut of 59500 acres under Pulivendula Branch Canal and to serve the Lingala Canal of 25000 acres. This scheme has been proposed by suitably adjusting 10 tmc of water to the above extents of canal system by adopting micro irrigation system in the Pulivendula Branch Canal. Thus, the 10 tmc would be available from the TBPHLC in the event of surplus years. So the CBR right canal that is Lingala has been taken up within the system made possible due to savings in the existing Pulivendula Branch Canal. However, the CBR which is to receive waters from the TBPHLC is not receiving adequate quantity of water. In view of that the part of surplus water that is being received into the Gandikota Reservoir System is envisaged to be drawn to supplement the CBR system to make the CBR system more effective from the view point of the functionality by lifting waters from Gandikota Reservoir System. 26 The integration of the operations of CBR system with

the Gandikota Reservoir is for improving efficiency of the

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3.3.3 Preparation of Detailed Project Reports Sripada Yellampally Project Go To Contents

The preparation of DPR for this project was entrusted to M/s Aarvee Associates before the award of the contract and closely monitored, whereas the Agreement for the works of SYP Stage-II Phase-I and NTPC Lift Scheme were concluded on 03-04-2005 & 07-04-2005 respectively. The work of preparation of DPR is mainly intended to get the project clearances from CWC, which is a continuous process. However in the mean time the works also are put on ground to save delay.

Dr.B.R.A.P.C.S.S. This project is taken up as per the Godavari Water Disputes Tribunal (GWDT) report, dated 06th October 1975, wherein the State of Maharashtra and Andhra Pradesh have agreed in-principle to take up this project at appropriate time with agreed water utilization and with assured availability of water. The Government of Andhra Pradesh has accorded permission for report preparation of detailed project from for diverting 160 TMC of water

Pranahita river to Sripada Sagar Project Reservoir and creating additional Ayacut of about 12.20 lakh acres including drinking water and industrial requirement of Hyderabad vide G.O.Rt. No. 623, I & CAD Dept., dated 15-07-2005. Accordingly, an Expert Technical Committee was constituted by the Government of Andhra Pradesh vide G.O.Ms No. 193, dated 27-10-2005 to evaluate and finalize the bids and to take up the 28 work of preparation of Detailed Project Report. The Government after careful examination of the recommendations of the above committee decided

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3.3.4 Identification of targeted ayacut: AMR SLBC Project: Go To Contents The Government in 4/95 decided to take up Lift Scheme from the foreshore of Nagarjuna Sagar Reservoir to give early benefits without prejudice to Tunnel Scheme vide G.O.Ms.No.55, I&CAD Department, dt.17.4.1995, as the Tunnel Scheme would require 7 to 8 years to complete. Accordingly, the Lift Scheme works were taken up and completed. Partial benefits have been giving from 2001 onwards from Lift Scheme. Tunnel Scheme is taken up in 2005 as a permanent solution. Since the possibility of drawing water by gravity is available for this project, the Tunnel scheme is taken up. For most of other schemes, there is no alternative except taking up of Lift. SOMASILA SWARNAMUKHI LINK CANAL (S.S.L.C.) The details of the Village wise and Mandal wise identified targeted Ayacut pertaining to SSLC Scheme have already been furnished to the audit. However a copy of the same is enclosed herewith. VELIGONDA PROJECT In the project scope of all works pertaining to canal networks, Mandal wise ayacut was prescribed. This is for the reason that in the absence of detailed ayacut registers the Village wise ayacut cant be arrived at. In fact the preparation of ayacut registers is one of the tasks in the EPC agreement which can be arrived at only after finalization of HPs, BC Maps etc. So far, the village wise ayacut finalized package wise is as follows. Package II- 41,000 Acres Package IIIPackage IVPackage VITOTAL 9,500Acres 19,500 Acres 2,50,000Acres 30 3,20,000Acres

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3.4.1 Indira Sagar Dummugudem LIS The APTRANSCO has requested the department to deposit Rs.290.14 Crores towards the estimated cost of the transmission scheme for ISDLIS for providing 229.096 MW. The Chief Engineer during 09/2009 has addressed the Government for according permission to deposit the amount with APTRANSCO. In turn, the Government have communicated certain remarks, which were attended by the department during 01/2010 duly obtaining the data from the APTRANSCO. Later the Government have instructed to ascertain from APTRANSCO during 10/2010 details of Phases in which the amount of Rs.290.14 Crores can be deposited with amount of each installment. Accordingly a report was submitted to the Government by the Chief Engineer during 11/2010. The Government vide G.O.Ms No.59, dt: 19-09-2011 have accorded permission to deposit the amount in 4 installments. Accordingly an amount of Rs.136.32 Crores was deposited during 02/2012 for taking up the works of transmission scheme. There is no time lag in completion of the scheme from the govt. or department side. Hence, the para may be dropped.

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3.4.2 Rajiv Dummugudem RDLIS: RDLIS: AP Transco agreed to provide 220 KV and 132 KV transmission line and requested the I&CAD department to deposit an amount of Rs.175.35 Crores, The Chief Engineer has requested the Government during 08/2010 to accord permission to deposit the amount. Replies to remarks of the Government were submitted during 03/2012 and permission is awaited. There is no time lag in completion of the scheme from the Government or department side.

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3.4.3 JPDNSS: JPDNSS: The WAPCos estimated and submitted power requirement in the DPR as 1565.4 MW for 6 pump houses of JPDNSS. The actual power requirement calculated by I & CAD Department for 6 pump houses is 1135.87 MW, for which estimate is prepared and approved by the IBM committee. Information regarding number of pumps to be operated and month wise requirement will be submitted after approval of design of pumps and motors. Hence, the para may be dropped. 3.4.4 AVR Handri Niva Sujala Sravanti : HNSS Project proposes to provide Irrigation facility to 6, 02,500 Ac in the four districts of Rayalaseema and drinking water to about 33 Lakh people living in urban areas like Dhone, Pattikonda, Guntakal, Kalyanadurg, Rayadurg, Prenukonda, Dharmavaram, Madakasira, Puttaparthi, Hindupur, Kadiri, Rayachoti, Go To Contents

Madanapalli, Thambaplli, Vayalpad, Pileru, Palamaner, Punganur, Pakala, Chittoor etc., and the rural areas enroute the canal using about 40 TMC of the flood waters of the Krishna River. The Project is a lift Irrigation scheme drawing the flood waters of the Krishna from the Srisailam Reservoir during the monsoon period. The flood waters of Krishna are proposed to be drawn from a point near confluence of the Krishna and Tungabhadra Rivers in the fore-shore of the Srisailam Reservoir without affecting the other committed uses under Srisailam and below including Nagarjuna Sagar and Krishna delta. water from the Reservoir will be drawn when the Reservoir level is +266.67m and above, through an approach channel and head regulator near Malyala village in Kurnool District and 35 lifted to EL +290.00m from there, the water will be conveyed through a system of gravity canals cum lifts.

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4.3.6 Adequacy of time for bidding: Go To Contents Adequate time has been provided to the Bidders for carrying out the preliminary survey and investigation before tendering depending upon the nature of work involved in the Project/package. Hence this is not a deviation from FIDIC model of EPC system and the contention of the audit that sufficient time is not provided to the Contractors towards preliminary survey and investigation before tendering is not correct.

Indira Sagar Dummugudem Lift Irrigation scheme : The works of Indira Sagar Lift Irrigation scheme, except Pump houses were divided in to 3 packages and Tenders were called for in Tender No.2/2006-07, Dated.17.07.2006, in Cat.-I. Due to Technical problems Tenders of these packages were cancelled and were invited again vide Tender No.4/200607,Dated.27.10.2006. Financial Bids for Tender No.4/2006-07 were opened on dt.16.11.2006 and Bids received for package Nos.21 & 22 and there is no response for package No.23. The tender for package No.23 was again called in tender No.5/2006-07,Dated.18.11.2006. But, no response even for second call. Based on the instruction of the CE/GLIS, Warangal, the package No.23 is divided into small packages one package in Cat-I (package No.31) and three packages in Cat.-II (package Nos.49,50 &51) vide CE/GLIS, Warangal as Lr.No.CE/GLIS/WGL/DCE/DEE/Camp-2, smaller packages may have response. Tenders were called for package Nos.31, 49, 50 & 51, in tender No. 6/2006-07,dated.06.01.2007 for package No.31 and tender No. 7/2006-07,dated.06.01.2007 for package Nos.49, 50 & 51. For the response of above tenders, single bids were received for 37 31,50 & 51 and awarded Hence, the para may be dropped Dated.02.01.2007

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4.3.9 Payment schedules: In EPC System, payments are made to contractor as Go To Contents per Payment Schedule. The total work specified under EPC turn-key contract is divided into several components of work to facilitate payments component wise. The contractors bid price as approved shall be divided among the components of work as per respective percentage of total bid price. The payment for each of the component works shall be limited to the respective amounts arrived on the basis of percentages specified. Payment schedule can be revised (based on detailed investigation, drawings and detailed estimation) due to variance in estimate. For revision of payment schedule, Chief Engineer is empowered for changes from component to component and Superintending Engineer from sub-component duly to sub-component the total price within bid the value component unaltered. Further from each bill, 7.50% of bill amount will be retained by Department until completion of whole work and on termination fault, property of all contract property any in at midway Site due due to to the Contractors Department becomes keeping

and

amount

Department will be treated as debt and will be recovered from agency with interest as per Agreement Clause. Hence the contractor may not leave the work midway because of revision of payment schedule at initial phases as pointed out by Audit and no loss will be caused to the public exchequer. Contractors are also allowed to revise Payment Schedules several times to their advantage resulting in front end payments. Such upward

revision of costs for items executable in the initial phases would result in loss to public exchequer if the contracting agency stops the work midway. 39 RDLIS: As per para 306(T) of AP Public works account code, the

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