After nearly ten years in power in Telangana, the Bharat Rashtra Samithi (BRS; earlier known as the Telangana Rashtra Samithi or TRS) has lost elections to the Congress party.
One of the reasons for the BRS’s defeat, experts say, is the problems related to the Kaleshwaram Lift Irrigation project (KLIP).
This was the pet project of the BRS and its chief minister, K. Chandrashekar Rao (KCR). This mega project is reported to have cost Rs 1,20,000 crores, most of it on commercial loans from banks.
Though the project is supposed to have been completed, its benefits are minuscule. It became a major election issue and was termed as an ‘ATM’ for KCR’s family by the Congress, while the BJP described it as a hallmark of corruption.
On top of this, a part of the main structure of this mega project literally sank into the Godavari River on the night of October 21. Forty days later, the BRS government itself sunk and lost the assembly election.
Now, the new government has inherited this massive project in bad shape.
This article is an attempt to provide a framework for the new government to address the KLIP’s issues and retrieve the situation in the larger interests of Telangana.
The KLIP became a major political issue ahead of the 2023 Telangana assembly election. Photo: X/@MirzaSiraj_INC.
Telangana and the KLIP
For those who are not familiar with the KLIP and Telangana, this brief description might help.
After a prolonged agitation, Telangana was established in 2014 by dividing Andhra Pradesh. Water was one of the three main reasons for this more than half-century-long agitation for separate statehood.
The Telangana region, which is mostly located in the Deccan plateau at higher elevations, was not getting its fair share of water allocated to the combined state of Andhra Pradesh. This is in spite of the fact that the region contains large parts of the Godavari and Krishna basins.
The Krishna River, which flows through the south of Telangana, does not have much water left due to various projects upstream in Karnataka and downstream in the coastal region. The Godavari, which is in the north of Telangana, does have plenty of water.
Water is needed in the uplands located higher than 400 metres above sea level, whereas the Godavari in Telangana has plenty of water along its course located less than 100 metres above sea level. Therefore, the only solution for getting water to the uplands is lift irrigation.
Lift irrigation is inherently expensive. As mentioned above, water is a very emotional issue in Telangana; as a result, lift irrigation got wider political and public acceptance.
In the combined state of Andhra Pradesh, several lift irrigation projects were announced for the Telangana region, mostly to pacify the agitation for a separate state. One such attempt was made by the then-Congress government in 2007 by initiating the Pranahita-Chevella lift irrigation project, which was later renamed as the Dr B.R. Ambedkar lift irrigation project.
The basic concept of the project is to divert water from the Pranahita, which is a tributary of the Godavari, to Yellampalli, which is on the main Godavari River. From here, the water is lifted several times and transported through tunnels and canals to provide water for irrigation and drinking water to Hyderabad.
The water is then transported further south till a town named Chevella (hence the name of the project).
This was the beginning of the KLIP.
The BRS government came to power in 2014 and significantly modified the Pranahita-Chevella project in 2016 and renamed it as the KLIP.
Kaleshwaram is a small town on the right bank of the Godavari. This remote and sleepy pilgrimage place has now become a household name for this rather controversial lift irrigation project.
The basic concept and strategy of the KLIP remained the same as that of the earlier project, which is to lift water to a height of about 500 metres from the Godavari and transport it 400 km to Medak, to Hyderabad city and further west into Rangareddy district.
The BRS government made three major changes to the project and increased its size and scope, thus making it very expensive.
The project was implemented through the engineering, procurement and construction (EPC) system of contracting introduced earlier. EPC contracting is opaque, and the resulting difficulty in tracking component and construction costs makes it easy for others to allege corruption.
While making these structural changes, the BRS projected this approach as far better and far more suitable than that of the earlier Pranahita-Chevella project. The KLIP was also marketed as the saviour of farming in Telangana, not only by the then-government but even by Union government agencies such as NABARD and the Central Water Commission (CWC).
The following are the three changes made by the BRS government:
• Shifting the primary intake point from the Pranahita at Thummidihatti village (close to the Maharashtra border) to Medigadda, just downstream from Kaleshwaram on the main Godavari River after its confluence with the Pranahita.
This change of intake points means using the main Godavari River as a storage reservoir, requiring the pumping of water upstream with three barrages and several dozens of high-capacity, high-speed pumps.
• Increasing the pumping capacity to 215 tmc, which required large storage reservoirs. A consequence of this was the creation of the Mallannasagar Reservoir, which has a capacity of 50 tmc, is located in the middle of nowhere and required the uprooting of 22 villages.
• Massive increase in cost: This increased the cost of the project from Rs 40,000 crore to almost Rs 1,27,872 crore.
This reengineered, re-branded project had the following three stated objectives:
1. New irrigation for 19.63 lakh acres and stabilisation for another 18.82 lakh acres
2. Providing thirty tmc drinking water for Hyderabad and ten tmc for villages en route
3. Providing sixteen tmc water for industry.
With three barrages, 15 storage facilities, 1531 km of gravity canals, 203 km of tunnels and 21 pump houses, the project became massive and complex. The estimated power demand is 4,959 MW and 19 sub-stations were to be built for this purpose.
Photo: X/@KTRBRS.
It is not a simple irrigation project, as was the case with most other irrigation projects. This level of complexity in construction and the speed at which these works were taken up have almost became a national spectacle.
The purpose and cost of operating this system all became secondary. At one stage, the project became a must-visit destination for whoever visited Hyderabad.
Even before it started, civil society critically analysed the project and presented its findings to the Telangana government.
Their constructive advice and later critical reports all were ignored. Any attempt to scrutinise the cost of water delivery was met with ridicule and even termed as ‘anti-Telangana’ and ‘anti-national’.
Later, the project’s key infrastructure was flooded and any criticism of the project even at this stage was largely ignored by both the state and Union governments.
It is important to mention three key points which reflect the thinking of the political establishment in India, particularly related to agriculture and large water-infrastructure investments.
Often, these projects are presented as a national good based on these outdated and outlived concepts:
(a) Water is wasted when it goes to sea, so all river water must be used to the last drop, (b) more irrigation is good for the country and (c) irrigation must occur at any cost, including without any analysis of the operation and maintenance costs of lift irrigation schemes.
These concepts were to some extent relevant then when India was deeply concerned about food security for its growing population. Also, most of those investments then were on gravity-based irrigation projects with little annual operation and maintenance costs.
The political establishment has continued endorsing these concepts and invested in complex lift irrigation projects, which require huge capital costs as well as operation and maintenance costs, which exceed even the total value of crops cultivated by farmers.
On top of this, most of these irrigation projects are being built by taking loans with commercial levels of interest.
Now, irrigation projects are not about farmers or food security; they are driven largely by a desire to keep construction contracts running.
These mega projects are being built due to lack of clear guidelines on (a) the cost of water delivery, (b) limits on state governments to create special purpose vehicles (SPVs) for any unproductive projects, (c) technical and quality oversight of project designs and construction, and (d) restrictions on commercial banks’ lending to such projects, which have no benefits to the country, all played a role in conceiving and constructing projects such as the KLIP.
In the prevailing situation, any state government can create an SPV and borrow money to construct any irrigation project with no economic logic, creating long-term economic consequences for future generations.
Unless clear policy framework and guidelines are in place, projects such as the KLIP will continue to be constructed in many parts of the country.
Also read: Wild Conspiracy Theories Won’t Fix Telangana’s Very Real Problems in Kaleshwaram
The current situation of the KLIP
• So far, Rs 93,782 crore has been spent on the project since 2016. (The earlier amounts were not included.) Of this, the Telangana government spent Rs 32,203 crore and Rs 61,665 crore has been borrowed from commercial banks. Data also indicate that the state government has already started paying loans and interest.
• The Telangana government has already spent a total of Rs 22,700 crore as part of its debt service. Of that, Rs 17,700 crore is towards interest. The major loan repayment started in 2023-24 with annual instalments of Rs 13,000 crore. This will go on for the next 13 years or so.
• In addition to money, this project required close to 1,00,000 acres of land; of that, 66,000 acres were acquired for infrastructure purposes, displacing many farmers and rural people. As mentioned above, Mallannasagar single-handedly displaced more than 22 villages.
• So far, just 98,000 acres of ayacut were created. This is just 5% of the total (19.6 lakh acres) expected to be created. No additional water for industry or drinking was provided.
• The project’s key infrastructure is crumbling at an alarming rate.
In 2022, two of the three major pumping stations on the Godavari were submerged due to floods, and in 2023, the first intake point (from where all the water is supposed to be pumped) experienced a major structural problem. The barrage across the main Godavari River started sinking. After that, two more barrages upstream are supposed to have developed similar problems.
• The Mallannasagar reservoir, which is supposed to be storing 50 tmc of water, is not being filled out of safety-related fears. The reservoir has been built on a geological fault line. After filling just 15 tmc (less than one-third of its capacity), some leakages have been reported. If this structure fails, it would be a major catastrophe for the nearby villages.
• Based on recently released data on electricity consumption for pumping water to various locations, the cost of electricity for providing water for irrigating each acre of land will be around Rs 80,000 to even Rs 1,00,000 per season. This far exceeds the total value of the crop. This cost is not considering the capital cost; it is just the yearly cost of providing water to farmers.
In a single sentence, this mega project is in utter and total disarray.
The project will be a major burden on the new government, whose prospects will be negatively impacted if it does not understand the project and put together systems to deal with it.
The way forward
Soon after the new government came to power, the KLIP figured prominently in its press conferences, and the chief minister is reported to have expressed his intention to ‘expose’ the project’s irregularities and order an investigation headed by a sitting high court judge.
Also, the new irrigation minister is negotiating with the company that constructed the Medigadda barrage to repair the damages.
Before the new government makes any attempt to repair the KLIP’s crumbling infrastructure, it needs to have clarity on the following three questions:
• Is the infrastructure safe and secure?
• How much it will cost annually to provide water for each acre of irrigation?
• What institutional mechanism is needed to manage the project?
The most effective and rational way of getting clarity on these questions is to commission a review of the project.
We suggest the following process in order to get a comprehensive view of the project. Until such a process is complete, the new government may have to avoid any new construction or repairs.
1. Review of existing infrastructure: The state government may approach the National Dam Safety Authority to constitute a committee with experts from the CWC as well as international experts to review the safety, security and reliability of all the structures constructed as part of the KLIP. The Union government should be able to help the state government in this process, including by providing financial support.
2. Cost-benefit analysis: An independent international agency, such as the ADB, must be hired to review the operation and maintenance cost of the project, which includes the costs of electricity and other costs in delivering water to farmers at each elevation. Such a review will significantly help in taking policy decisions on which parts of the KLIP are most useful and which parts need re-orientation or a relook.
3. Re-structuring loans: The Kaleshwaram Lift Irrigation Corporation, a state government SPV has been created to borrow loans for the project.
Now, the state government, which has guaranteed the loans, must pay them back. The annual payment from 2024 is about Rs 13,000 crore a year. Several public sector banks, the Rural Electrification Corporation and NABARD have given loans without going through any technical and financial review. On top of the project’s crumbling infrastructure, the SPV is almost bankrupt and has no income.
The Telangana government should ask these banks to re-structure their loans and re-negotiate the interest. This is most important in order to avoid undue burden on state finances. The Union finance minister has herself publicly stated that the Telangana government borrowed at high interest rates for this project and therefore the Union government might help in the process of restructuring the loan.
4. Institutional mechanism: A separate institutional mechanism to deal with this project, and the process of review and loan negotiations, must be established.
Conclusion
The KLIP is one of the costliest irrigation projects in India and the world. Even ignoring its massive capital cost and structural failures, the project requires at least Rs 10,000 crore to Rs 12,000 crore for annual maintenance towards electricity and other costs. This project will also pose a major policy challenge to Telangana’s government for several decades.
Telangana’s people are expecting rational decisions by this government. Based on reports, it appears that the new government is contemplating certain options, which include (a) closing the entire project, (b) spending large sums to repair damaged structures and (c) building structures to bring water from other locations.
Such options should emerge from a comprehensive review process. Without such a process, any decision could certainly lead to even more financial and operational problems and pose even greater risk.
Well-structured reviews with national and international experts on the safety and stability of the project’s structures, and on its cost benefits, will surely come out as the best possible solution to this project.
Already, massive public money amounting to more than Rs 1,20,000 crore has been spent. Any additional money on this project should be based on the recommendations of a credible and independent review process.
It is in the interest of Telangana’s people to take wise and informed decisions. Any hasty decision to close the entire project or to rush to alternative locations will lead to a further waste of money. Therefore, the only clear and wise option in front of this government is to commission these reviews at the earliest without any further delay.
If the new government wants to ascertain the extent of the misappropriation of funds and other administrative lapses related to the KLIP, that should be a separate process, in addition to technical reviews suggested above. There is a window of opportunity for the new government to do the right thing for Telangana and for its farmers.
Telangana’s people and farmers have waited for a long time – they can wait for a few more months until the completion of these review processes.
Dr Biksham Gujja and Dr Shivkumar Kanike are experts in water management, hydrology and the power requirements of large projects. In 2016, before the KLIP was started, they produced a comprehensive report suggesting changes which could have saved significant amounts of money and improved the efficiency of the project. Contact email: gujjab@gmail.com