
HYDERABAD: Special Chief Secretary (Finance) K. Ramakrishna Rao informed the Kaleshwaram Commission of Inquiry on Tuesday that the state government was attempting to restructure the loans taken for the Kaleshwaram Lift Irrigation Scheme. Deposing before the commission, the senior IAS officer stated that the government had paid Rs 6,519 crore towards interest and Rs 7,382 crore towards the principal amount in this financial year on the loans taken for the irrigation project.
When commission chairman Justice P.C. Ghose asked about the borrowings, Ramakrishna Rao stated that the rate of interest ranged from 9 to 10.5 per cent for the Kaleshwaram loans. That was why the government was trying to restructure the loans, he explained.
When the commission asked what the responsibility of the Finance department would be if the government was required to discharge the loans raised by the Kaleshwaram Irrigation Project Corporation Limited (KIPCL), Ramakrishna Rao said that the government was the guarantor and had to service the loans.
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Ramakrishna Rao explained that in 2020-21, the Union government changed the ‘accounting treatment’ and considered all the loans taken by the special purpose vehicles (SPVs), whose loans were serviced by the government, as state borrowings. When asked whether the KIPCL prepared its balance sheets or accounts for each financial year, Ramakrishna Rao said that, as far as he was aware, the KIPCL must have prepared them. Ramakrishna Rao, who has been working in the Finance department since February 2014, submitted his affidavit to the commission on 1 August 2024 concerning Kaleshwaram.
When the commission asked certain questions about the clauses mentioned in GO 144, Ramakrishna Rao said that it was initially conceived that there would be a dedicated source of revenue from the sale of water to industries, the sale of drinking water, and the development of tourist areas near the project. The IAS officer explained that the KIPCL received around Rs 7 crore from the supply of water to industries. He, however, said that during the construction period, the principal source of finance would be based on the loans raised by the KIPCL, as it would take some time for the sale of water to industries and other users.
When the commission chairman pointed out that GO 145 mentioned a turn-key contract, but it appeared from the facts that there was some deviation made by the government and the norms in the GO were not followed with respect to the construction of three barrages of Kaleshwaram, Ramakrishna Rao replied, “What is there in the said government order, is there.”
When the commission asked what factors the Finance department usually takes into consideration to approve a file relating to the construction of a project, Rao said that before granting approval, the Finance department looks into factors such as the benefit-cost ratio of the project and the availability of funds through the Budget or from other sources. Ramakrishna Rao stated that any proposal for incurring expenditure on projects had to be concurred by the Finance department.
The core committee was constituted through a GO on 3 November 2016. The committee was supposed to appraise the principal finance secretary about the progress of the Kaleshwaram project on a regular basis.
Was this done at any point from the commencement of the project to the completion of the construction of the three barrages? There is no record of the committee constituted to appraise the progress of the project on a continuous basis.