KCR govt ‘helped’ L&T avoid defect liability

Hyderabad: The previous iteration of the Telangana state government headed by K. Chandrashekar Rao, who also held the irrigation portfolio, is alleged to have abetted Larsen & Toubro (L&T) — the contractor construction company that built the Medigadda Barrage under the Kaleshwaram Lift Irrigation Scheme (KLIS) — escape from a defect liability clause.

Not accounting for this “help”, L&T would have had the entire responsibility of rebuilding the damaged portion(s) of the barrage at its own cost. It was found that the previous government managed to abet the company evade the clause by issuing multiple completion certificates to L&T. As per the contract with L&T, the company has a five-year operation and maintenance responsibility of which the first two years fall in the defect liability period from the date of official completion of the project. The Medigadda Barrage was inaugurated amid much fanfare by Chandrashekar Rao on June 21, 2019.

L&T had also celebrated the inauguration by issuing a press release on June 21, 2019, saying “L&T completes iconic Medigadda Barrage, delivers mega project in just 24 months.” The first completion certificate was awarded to the company on September 10, 2019, and subsequently, a second completion certificate on November 11, 2020, and a third on March 15, 2021, according to sources.

Though two completion certificates were issued in 2019 and 2020, the irrigation department is on record, asking L&T on February 17, 2021, that it is “requested to mobilise men, material, machinery, and plan for taking up works for rectifying all the damage occurred in CC blocks, wearing coat etc. Also, it is requested to take up the balance original works, i.e., approach roads to barrage, construction/erection of maintenance bays for gantry cranes on both the sides of the barrage, end structure on diversion channel on left side, EWE/FE in diversion channels/flood banks and (take up a) 3D model study.”

Just a few months before the February 2021 letter, on November 11, 2020, the engineer-inchief of the Kaleshwaram project, seeking release of bank guarantees deposited by L&T, wrote to the engineer-in-chief of the irrigation department: “The agency (L&T) has given an undertaking that they will carry out constructions defects, if any during defect liability period which starts from 29 February 2020 onwards.” 

The letter further stated that the works were completed and hence, the bank guarantees may be released to L&T. These, and other findings related to the investigation, have been unearthed in the ongoing probe by the Vigilance and Enforcement Wing into the Medigadda Barrage fiasco. Two completion certificates were issued in 2019 and 2020, but the official incharge of the barrage makes it clear that there are repairs to be done, and some original works yet to be completed.

This raises many questions on how the first two completion certificates were issued to L&T, sources said.

“No record has been found so far about the mandatory joint inspections by L&T and irrigation department of the ‘completed’ works as required. Without proof of a joint inspection certifying the completion, the ‘completion certificates’ issued by the irrigation department are of no value,” a source familiar with the investigation told Deccan Chronicle.

In effect, there is no clarity as to when the Medigadda Barrage works were fully and properly completed. “The fact is there is no record of actual project completion till date, and if there are documents related to this, then they are likely being suppressed by some irrigation officials,” the source said. Three months after the last of the three ‘completion certificates’ was issued on March 15, 2021, the irrigation department headed by then special chief secretary Dr Rajat Kumar approved — through GO Rt No 330 dated September 6, 2021 — the revised estimates for the construction of the Medigadda Barrage to the tune of Rs 4,613 crore.

Originally, in 2016, the irrigation department approved a cost of Rs 2,591 crore for the barrage through GO Rt No 231 dated March 1, 2016, which was revised to Rs 3,260 crore in GO Rt No. 707 dated May 19, 2018. After the sinking of Block 7 of Medigadda Barrage became public knowledge on October 21,

2023, L&T “reiterated” on November 4 its “commitment to participate in the process of restoring the Block 7 in the Lakshmi Bridge (Medigadda Barrage) that developed some settlement and cracks in a portion of Block 7.”

Subsequently on December 2, 2023, L&T, in a letter to the irrigation department, is reported to have claimed that it could not be held liable for the damage to Block 7 and its piers, as its period of contract for defect liability had ended in March 2023, and that it was no longer liable to pay for any repair to the Medigadda Barrage.