Performance Audit on Polavaram Irrigation Project, Government of Andhra Pradesh

A performance audit, conducted between June 2022 and June 2023 and covering 2017-18 to 2022-23, of how the Polavaram Irrigation Project on the Godavari has been planned and executed — its headworks, powerhouse and main canals, the land acquired for it, and the resettlement of the families it displaces. Declared a national project in 2014 under the Andhra Pradesh Reorganisation Act, it is executed by the state's Water Resources Department with the Centre reimbursing the cost.

State: Andhra Pradesh
Audit period: 1 Apr 2017 — 31 Mar 2023
Presented: 6 Mar 2026

Findings

Seventeen years after construction began the headworks remained incomplete; ₹7,422.69 crore of headworks was awarded and ₹5,757.48 crore spent, while the hydro electric project stood at 12 per cent physical and 17 per cent financial progress.
“As of March 2023, Headworks / main dam works costing to ₹7,422.69 crore were awarded and an expenditure of ₹5,757.48 crore was incurred. Even after a lapse of 17 years, the Headworks remained incomplete... The physical and financial progress of Polavaram Hydro Electric Power project was only 12 and 17 per cent respectively.”Executive Summary
Because the spillway and spill channel were unfinished the river could not be diverted, so floodwater passed through gaps in the cofferdam and damaged the cofferdams and the diaphragm wall — not rectified as of March 2023.
“This resulted in floodwater passing through the available gaps of Cofferdam, causing damage to the partially constructed Cofferdams and D-Wall. As of March 2023, the rectification of the D-Wall has not been undertaken.”Executive Summary
The cost estimate was revised from ₹10,151.05 crore at 2005-06 prices to ₹16,010.45 crore at 2010-11 prices and then to ₹55,548.87 crore at 2017-18 prices, the last of which the Centre had still not approved because the socio-economic survey and the distributary DPR were incomplete.
“Investment clearance was accorded (2009) by the Planning Commission for the original cost estimate (2005-06 PL) of ₹10,151.05 crore for the project, prepared by GoAP. Subsequently, the project cost was revised (1st RCE) with 2010-11 PL to ₹16,010.45 crore by GoAP for which investment clearance was accorded (February 2017) by GoI. Subsequently, the project cost was again revised (2nd Revised Cost Estimate) to ₹55,548.87 crore (at 2017-18 PL).”Chapter 2
Of 1,06,006 displaced families — 56,495 of them tribal — only 11,677, or 11 per cent, had been rehabilitated as of March 2023; of 213 resettlement colonies planned at ₹13,262 crore, 26 were complete.
“As per original estimate (2005-06), 44,574 PDFs were to be re-habilitated at an estimated cost of ₹744.60 crore which was increased to ₹20,091.09 crore (2017-18 RCE) for 1,06,006 PDFs (56,495 are tribal families). However, as of March 2023, only a total of 11,677 PDFs (11 per cent of the total PDFs) were rehabilitated.”Chapter 6
Of 1,79,770 acres of land required, 1,13,119 acres — 67.43 per cent — had been acquired; budget utilisation ran between 21 and 66 per cent over 2017-23, with spending concentrated on works and least on land acquisition and resettlement.
“Against the land requirement of 1,79,770 acres, requisitions were filed for 1,67,765 acres and an extent of 1,13,119 acres, i.e., 67.43 per cent, has been acquired... The percentage utilisation of budget provided ranged between 21 to 66 during 2017-23. The expenditure incurred was largely focused on works component, giving least priority to LA and R&R activities.”Executive Summary

Findings

Seventeen years after construction began the headworks remained incomplete; ₹7,422.69 crore of headworks was awarded and ₹5,757.48 crore spent, while the hydro electric project stood at 12 per cent physical and 17 per cent financial progress.

“As of March 2023, Headworks / main dam works costing to ₹7,422.69 crore were awarded and an expenditure of ₹5,757.48 crore was incurred. Even after a lapse of 17 years, the Headworks remained incomplete... The physical and financial progress of Polavaram Hydro Electric Power project was only 12 and 17 per cent respectively.”Executive Summary

Because the spillway and spill channel were unfinished the river could not be diverted, so floodwater passed through gaps in the cofferdam and damaged the cofferdams and the diaphragm wall — not rectified as of March 2023.

“This resulted in floodwater passing through the available gaps of Cofferdam, causing damage to the partially constructed Cofferdams and D-Wall. As of March 2023, the rectification of the D-Wall has not been undertaken.”Executive Summary

The cost estimate was revised from ₹10,151.05 crore at 2005-06 prices to ₹16,010.45 crore at 2010-11 prices and then to ₹55,548.87 crore at 2017-18 prices, the last of which the Centre had still not approved because the socio-economic survey and the distributary DPR were incomplete.

“Investment clearance was accorded (2009) by the Planning Commission for the original cost estimate (2005-06 PL) of ₹10,151.05 crore for the project, prepared by GoAP. Subsequently, the project cost was revised (1st RCE) with 2010-11 PL to ₹16,010.45 crore by GoAP for which investment clearance was accorded (February 2017) by GoI. Subsequently, the project cost was again revised (2nd Revised Cost Estimate) to ₹55,548.87 crore (at 2017-18 PL).”Chapter 2

Of 1,06,006 displaced families — 56,495 of them tribal — only 11,677, or 11 per cent, had been rehabilitated as of March 2023; of 213 resettlement colonies planned at ₹13,262 crore, 26 were complete.

“As per original estimate (2005-06), 44,574 PDFs were to be re-habilitated at an estimated cost of ₹744.60 crore which was increased to ₹20,091.09 crore (2017-18 RCE) for 1,06,006 PDFs (56,495 are tribal families). However, as of March 2023, only a total of 11,677 PDFs (11 per cent of the total PDFs) were rehabilitated.”Chapter 6

Of 1,79,770 acres of land required, 1,13,119 acres — 67.43 per cent — had been acquired; budget utilisation ran between 21 and 66 per cent over 2017-23, with spending concentrated on works and least on land acquisition and resettlement.

“Against the land requirement of 1,79,770 acres, requisitions were filed for 1,67,765 acres and an extent of 1,13,119 acres, i.e., 67.43 per cent, has been acquired... The percentage utilisation of budget provided ranged between 21 to 66 during 2017-23. The expenditure incurred was largely focused on works component, giving least priority to LA and R&R activities.”Executive Summary