According to the CAG report, the project cost escalated by 179%, rising from ₹8,323.50 crore in 2012 to ₹23,251.66 crore in 2023.
| Photo Credit: K BHAGYA PRAKASH
In an embarrassment to the Karnataka government, the Comptroller and Auditor General (CAG) of India has flagged serious deficiencies in tendering processes and financial management in the Yettinahole Integrated Drinking Water Project in Hassan district, being implemented at a total cost of ₹23,251.66-crore for a decade now.
Financial viability
The CAG report, tabled in the Legislative Assembly on Thursday (January 29, 2026) , revealed that nearly 80% of the project works were awarded to contractors without assessing their financial capacity, bid capacity, or work experience. It noted that 67% of the works, valued at ₹14,805.80 crore, were awarded to just seven contractors, with a single contractor securing 11 contracts worth ₹5,216.58 crore. This concentration of contracts posed a significant risk to timely completion of the project, the report said.
The audit also pointed out instances of undue financial favour to contractors, including non-recovery of excess costs of pipe materials, extra payments for works already covered under turnkey contracts, premature release of retention money and performance security, irregular advance payments for pipe supply, and failure to recover benefits accrued to contractors due to the implementation of GST.
Cost escalation
According to the report, the project cost escalated by 179%, rising from ₹8,323.50 crore in 2012 to ₹23,251.66 crore in 2023. Despite more than a decade of work, the project remains far from completion, leading to prolonged delays in delivering drinking water to drought-prone Kolar and Chickballapur districts, which face acute water scarcity.
Even after an expenditure of ₹15,297 crore as of March 2024, the project’s primary objective of providing drinking water to the two districts remains unfulfilled, the CAG noted.
The audit further observed that the availability of water in the weirs during the five-year period from 2018 to 2023 ranged between 7.20 TMCFT and 24.70 TMCFT, significantly lower than the proposed 32.15 TMCFT envisaged in the Detailed Project Report (DPR). This mismatch resulted in the creation of infrastructure such as pipelines and pumping machinery with higher-than-required capacity, raising concerns about inefficiency and potential water shortages.
The storage capacity of the balancing reservoir — considered a crucial component for ensuring summer water supply to Kolar and Chickballapur — was revised twice and reduced from 10 TMCFT to 2 TMCFT, leading to an additional cost of ₹621.45 crore. The report also pointed out that land acquisition for the construction of the balancing reservoir at Lakkenahalli has not yet begun.
The CAG warned that Visvesvaraya Jala Nigam Ltd. faces financial uncertainty, with an estimated ₹7,954.63 crore still required to complete the project.
Synchronisation issues
Lack of synchronisation between Phase-I and Phase-II works resulted in fragmented execution, creating infrastructure in isolated patches. Assets worth ₹2,965.77 crore created under Phase-I could not be utilised due to the non-completion of Phase-II components such as the gravity canal and balancing reservoir needed to convey the lifted water, the report said.
As a result, electro-mechanical equipment, including pumps and motors, could not be tested or commissioned and remains idle, consuming a significant portion of its useful life, the report added.
Published – January 29, 2026 05:26 pm IST
