Jalayagnam: The mother of all frauds

In what has turned out to be a scam of startling proportions, nearly half of the Rs. 71,292 crore spent on the ambitious irrigation scheme so far is estimated to have been swindled.

Documents obtained under the Right to Information (RTI) Act show the irregularities that were committed range from violation of the common tender document to illegally made excessive payments for the works done and fraudulently claimed to have been done.
The Public Accounts Committee (PAC) headed by TDP’s Revury Prakash Reddy is slated to meet on April 17 to review the works done under Jalayagnam scheme and to discuss the irregularities pointed out by the CAG report, and the power corridors are already abuzz about its impending political fallout in a scenario in which many decisions of the YSR regime is under intense scrutiny.

The irregularities in Jalayagnam began at the stage of notification of the scheme in 2004 by the YSR government and calling for tenders for various irrigation projects under the scheme. As per GO MS No.94 that stipulates the rules for the execution of works and prescribes the standard schedule of rates (SSR) for the payments, a common tender document, which is the basis for the execution of works under the scheme, has to have been formed. Instead, the works were commissioned under the Engineering, Procurement and Construction (EPC) method by which instead of unit-wise estimation, huge lump sum payments were made based on an approximation of the amount spent on components of the project.

The major irregularity that occurred at the initial stage of Jalayagnam is the amount paid for the surveys that were conducted. As per the EPC itself, for the survey of the work, the amount to be paid should be not more than 0.5 percent of the total cost of the work, but in almost all the cases, the amount paid for the survey was 6-8 times more than the prescribed limit. For example, a whopping Rs 958.86 crore or 3.5 percent of the total cost, was paid for over 25 works of the Dr Ambedkar Pranahita-Chevella Sujala Sravanthi project.

Similarly, over ten works under the Jyothi Rao Phule Dommugudem- Nagarjunasagar Sujala Sravanthi project received excess payment for the survey. For example, a Hyderabad-based M/S SEW-MEIL-ZVST AAG (JV) received Rs157 crore for the survey work that actually had a provision for only Rs 19 crore. Likewise, Meil-Maytas-AAG (JV) pocketed Rs 97 crore as against the provision of Rs 7.43 crore for another survey and Ramky-ZVS-Progressive was paid Rs 157 crore for a survey when the provision was for just Rs 11.43 crore.

The oputgoing  PAC had as early as 2009 declared  the Jalayagnam is the mother of all frauds,”
“Jalayagnam is such a rare scam that more than the half of the money spent on its name has actually been siphoned off. The fraud committed on the state is of gigantic proportions not only in terms of the project size but also in terms of the irregularities committed,” the then PAC chairman Nagam Janardhan Reddy had said.

The report on the irregularities in Jalayagnam was submitted by the PAC headed by Nagam to Assembly speaker Nadendla Manohar last year, but  the congress government had  put it on cold shelves and is unlikely to make it  public.