Hyderabad water board spent excess, managed projects poorly: CAG report

The report said that the Greater Hyderabad Municipal Corporation defaulting in payment of its share of water tax also had a severe impact on the water board’s revenues.
A worker clearing drains
A worker clearing drains
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The Comptroller and Auditor General of India's audit report for 2018 has faulted the Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB) for excess expenditure and its management of drinking water projects, causing heavy expenditure against its revenues. The CAG cited one project to construct a ‘Ring Sewer Main’ that would divert sewage from the Kukatpally Nala (storm water drain) and would cost Rs 58.96 crore. The CAG report which was presented in the Assembly on Friday said that officials had favoured certain contractors for the project. 

As per a report by the Times of India, the project was taken up by two firms and completed in 2016. During the construction, the wire cables of TS Transco were damaged at Necklace Road.  While it was the responsibility of the contractors to take the risk and compensate for losses during the construction, without invoking a contractual clause to recover the damage cost, HMWSSB paid Rs 1.05 crore from its own funds, the CAG report said.

According to The Hindu, the report also found fault with HMWSSB in its management of drinking water projects. The report said that the water board paid in excess to a contractor for the execution of an intake channel from the foreshore of Yellampally barrage.

With HMWSSB incurring heavy expenditure against revenues, its financial sustainability has raised doubts. 

The Hindu reported that HMWSSB continuously incurred expenditure in excess of its income between 2013 and 2017, due to which its losses stood at Rs 967 crore as on March, 2017. Further, the Board had also taken loans of Rs 300 crore in 2014, and waiver of water cess dues to the extent of Rs 441.46 crore in 2016, which had an adverse impact on revenues, the CAG report said.

The report said that the Greater Hyderabad Municipal Corporation (GHMC) defaulting in payment of 15% share of Water Tax had a severe impact on the water board’s revenues.

The CAG report also found that there was no mechanism to check water that was unaccounted. The losses of unaccounted water increased by 29% to 172.95 million gallons of water per day in 2017-18. The CAG suggested that there is a need to conduct an audit to compute the water losses by a technically competent third party and adopt efficient systems. 


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