Performance Audit on Implementation of Yettinahole Integrated Drinking Water Project in Karnataka

The Yettinahole Integrated Drinking Water Project was conceived in 2012 to divert surplus water from the Western Ghats to the water-scarce districts of Kolar, Chikkaballapura, Tumkur and Ramanagara in Karnataka. Originally estimated at ₹8,323.50 crore, the project cost has already been revised twice to ₹23,251.66 crore — a 2.8x overrun — and is still incomplete after 10 years. CAG found: design changes added ₹621.45 crore avoidable cost; only 25-54% of annual budget requirements were provided; ₹7,954.63 crore still needed to complete works; and the projected water yield was overestimated from private gauge station data.

State: Karnataka
Audit period: 1 Apr 2014 — 31 Mar 2024
Presented: 29 Jan 2026

Findings

Yettinahole project cost escalated 2.8× from ₹8,323.50 crore to ₹23,251.66 crore after two DPR revisions — still incomplete after 10 years with no water delivered to target districts.
“₹8,323.50 crore to ₹12,912.36 crore in February 2014 and again to ₹23,251.66 crore in January 2023. Project works are still under progress and far from completion and intended benefit delivery.”Exec Summary · p. 9
Government provided only 25–54% of annual budget; ₹7,954.63 crore still needed; water yield overestimated at 32.15 TMC vs actual 24.70 TMC — the project's viability is in question.
“The Project suffered from financial constraints as the Government provided only 25 to 54 per cent of the budget requirements for the Project during the period 2018-19 to 2022-23. VJNL faces financial uncertainty regarding the ₹7,954.63 crore required for completing the Project.”Exec Summary · p. 10
Two DPR revisions; still incomplete after 10 yearsProject cost escalated 2.8× — ₹8,323 Cr to ₹23,251 Cr
The Yettinahole project's Detailed Project Report has been revised twice since original approval in July 2012: from ₹8,323.50 crore to ₹12,912.36 crore in February 2014, and again to ₹23,251.66 crore in January 2023. Despite 10 years of execution since March 2014, the project remains far from complete. None of the DPRs envisaged a credible completion schedule for benefit delivery. CAG noted that the design did not account for downstream demand or system integration, and that continuous supply during summer months was never part of the original design scope.
“₹8,323.50 crore to ₹12,912.36 crore in February 2014 and again to ₹23,251.66 crore in January 2023. The works were taken up since March 2014 in various packages to be executed in two phases. However, Project works are still under progress and far from completion and intended benefit delivery.”Exec Summary · p. 9
VJNL faces ₹7,954.63 Cr funding uncertainty for balance worksOnly 25–54% of annual budget provided — chronic underfunding
The project suffered from severe financial constraints throughout 2018-19 to 2022-23. The Government provided only 25 to 54 per cent of the budget requirements each year. As of June 2023, the project authority VJNL applied for fresh loans to complete remaining works — but approval was still pending in March 2024. The water yield projection used in the DPR was based on data from private gauge stations and found to be "on the higher side," meaning the actual water available may be less than designed for. Audit found the available water yield may be as low as 24.70 TMC versus the DPR's estimated 32.15 TMC.
“The Project suffered from financial constraints as the Government provided only 25 to 54 per cent of the budget requirements for the Project during the period 2018-19 to 2022-23.”Exec Summary · p. 10
Changed from 10 TMC to 2 TMC storage — requiring more monsoon pumping₹621 Cr extra cost from avoidable design change; ₹7,954 Cr still needed
When the project design was revised, the storage reservoir component was reduced from a proposed 10 TMC to 2 TMC. This required compensatory increased pumping during monsoon months to make up the storage deficit, and the consequent design changes resulted in additional cost of ₹621.45 crore to the project — avoidable expenditure if the original design had been properly validated. As of March 2024, ₹7,954.63 crore is still required for completing the project and approval for fresh loans is pending. Benefit delivery to Kolar, Chikkaballapura and other dry districts — the core purpose of the scheme — remains deferred indefinitely.
“the consequent design changes resulted in additional cost of ₹621.45 crore to the Project. Resultantly, as of March 2024, VJNL faces financial uncertainty regarding the ₹7,954.63 crore required for completing the Project.”Exec Summary · p. 10

Recommendations

State Government should ensure full annual budget allocation to VJNL to prevent further cost escalation from delayed execution.
Water yield projections must be verified using official gauge station data and revised in DPR if the 32.15 TMC figure is overstated.
A credible time-bound completion plan with accountability for project management must be developed.

Performance Audit on Implementation of Yettinahole Integrated Drinking Water Project in Karnataka

Findings

Yettinahole project cost escalated 2.8× from ₹8,323.50 crore to ₹23,251.66 crore after two DPR revisions — still incomplete after 10 years with no water delivered to target districts.

“₹8,323.50 crore to ₹12,912.36 crore in February 2014 and again to ₹23,251.66 crore in January 2023. Project works are still under progress and far from completion and intended benefit delivery.”Exec Summary · p. 9

Government provided only 25–54% of annual budget; ₹7,954.63 crore still needed; water yield overestimated at 32.15 TMC vs actual 24.70 TMC — the project's viability is in question.

“The Project suffered from financial constraints as the Government provided only 25 to 54 per cent of the budget requirements for the Project during the period 2018-19 to 2022-23. VJNL faces financial uncertainty regarding the ₹7,954.63 crore required for completing the Project.”Exec Summary · p. 10

Two DPR revisions; still incomplete after 10 yearsProject cost escalated 2.8× — ₹8,323 Cr to ₹23,251 Cr

The Yettinahole project's Detailed Project Report has been revised twice since original approval in July 2012: from ₹8,323.50 crore to ₹12,912.36 crore in February 2014, and again to ₹23,251.66 crore in January 2023. Despite 10 years of execution since March 2014, the project remains far from complete. None of the DPRs envisaged a credible completion schedule for benefit delivery. CAG noted that the design did not account for downstream demand or system integration, and that continuous supply during summer months was never part of the original design scope.

“₹8,323.50 crore to ₹12,912.36 crore in February 2014 and again to ₹23,251.66 crore in January 2023. The works were taken up since March 2014 in various packages to be executed in two phases. However, Project works are still under progress and far from completion and intended benefit delivery.”Exec Summary · p. 9

VJNL faces ₹7,954.63 Cr funding uncertainty for balance worksOnly 25–54% of annual budget provided — chronic underfunding

The project suffered from severe financial constraints throughout 2018-19 to 2022-23. The Government provided only 25 to 54 per cent of the budget requirements each year. As of June 2023, the project authority VJNL applied for fresh loans to complete remaining works — but approval was still pending in March 2024. The water yield projection used in the DPR was based on data from private gauge stations and found to be "on the higher side," meaning the actual water available may be less than designed for. Audit found the available water yield may be as low as 24.70 TMC versus the DPR's estimated 32.15 TMC.

“The Project suffered from financial constraints as the Government provided only 25 to 54 per cent of the budget requirements for the Project during the period 2018-19 to 2022-23.”Exec Summary · p. 10

Changed from 10 TMC to 2 TMC storage — requiring more monsoon pumping₹621 Cr extra cost from avoidable design change; ₹7,954 Cr still needed

When the project design was revised, the storage reservoir component was reduced from a proposed 10 TMC to 2 TMC. This required compensatory increased pumping during monsoon months to make up the storage deficit, and the consequent design changes resulted in additional cost of ₹621.45 crore to the project — avoidable expenditure if the original design had been properly validated. As of March 2024, ₹7,954.63 crore is still required for completing the project and approval for fresh loans is pending. Benefit delivery to Kolar, Chikkaballapura and other dry districts — the core purpose of the scheme — remains deferred indefinitely.

“the consequent design changes resulted in additional cost of ₹621.45 crore to the Project. Resultantly, as of March 2024, VJNL faces financial uncertainty regarding the ₹7,954.63 crore required for completing the Project.”Exec Summary · p. 10

Recommendations

State Government should ensure full annual budget allocation to VJNL to prevent further cost escalation from delayed execution.

Water yield projections must be verified using official gauge station data and revised in DPR if the 32.15 TMC figure is overstated.

A credible time-bound completion plan with accountability for project management must be developed.