BENGALURU: A CAG compliance audit has uncovered widespread inaccuracies in road project cost estimates prepared by the Public Works Department, pointing to inefficient use of public funds across Karnataka’s road works portfolio.
The audit covered a total of 5,200 works executed in the selected divisions, carrying an estimated cost of Rs 16,858 crore. From this total number, auditors picked 367 works for detailed examination, together valued at Rs 5,174 crore. Scrutiny of these works revealed that a whopping 317 of them— accounting for roughly Rs 4,837 crore, or nearly 94% of the sampled value— carried inflated estimates.
The audit concluded that available road asset management data under Planning and Road Asset Management Centre (PRAMC) was not effectively utilised while preparing project estimates. It observed that the department could have made better use of existing materials such as excavated soil, wet mix macadam, and granular sub-base to bring down expenditure. The estimates were also found to contain inaccuracies, incorrect embankment calculations, and the adoption of an inappropriate tender premium.
Auditors further noted that departures from Indian Road Congress (IRC) and Ministry of Road Transport and Highways (MoRTH) guidelines led to design enhancements that went beyond functional needs, resulting in avoidable costs.
Certain discrepancies in the schedule of rates, including incorrect conversion factors and cost computations, were also found to have inflated the estimates and may have conferred undue benefit to contractors.
The audit additionally pointed out that innovative, economical and eco-friendly alternatives such as cement-treated sub-base, reclaimed asphalt pavement, and plastic roads were not explored, despite their potential to enhance cost efficiency and sustainability.
Responding to these conclusions in July 2025, the Government stated that guidelines regarding the utilisation of existing resources like soil, wet mix macadam and Granular Sub-Base would be reiterated to avoid unnecessary expenditure and to promote sustainability. It assured that steps would be taken to prevent inaccuracies in estimates going forward, including proper training for staff, use of automated tools, and checking of items like area weightage, embankment quantities, and binder course selection.
The government also agreed to thoroughly review and correct the discrepancies in the schedule of rates, such as wrong conversion factors and incorrect cost calculations, to prevent any inflation in estimates that could provide undue benefits to contractors. It further committed to actively considering alternatives to construct bituminous roads in future project planning.
Based on these findings, the audit recommended that the department update the schedule of rates to correct discrepancies and inflated rates and to include essential missing items, thereby streamlining estimate preparation and promoting the use of available earth for sub-grade construction.
It also recommended that the government ensure PRAMC data is effectively utilised and that existing pavement structures are thoroughly evaluated for potential reuse to achieve cost efficiency and sustainability. Further, it called on the PWD to prepare cost estimates based on actual functional requirements and realistic traffic projections.
Audit Overview
5,200 total works covered in the selected divisions
Rs 16,858 cr total estimated cost of all projects
Samples examined
367 specific works picked for detailed examination
Rs 5,174 cr combined value of the selected sample
Key Findings
317 audited projects flagged with inflated estimates
Rs 4,837 cr locked up in artificially bloated budgets
94% of sample value affected by cost manipulation