In a sharply worded letter to cabinet secretary TV Somanathan, former secretary to the government of India EAS Sarma has demanded a forensic audit and investigation by central bureau of investigation (CBI) and directorate of enforcement (ED) into the Polavaram multipurpose irrigation project in Andhra Pradesh. Mr Sarma cites a damning report from CAG (comptroller and auditor general of India) that found two decades of ₹ contract irregularities, a rehabilitation scam, structural damage from ignored technical protocols, and over 100,000 tribal families still living in sub-human — all while the project's cost has ballooned to over ₹62,000 crore without a single valid environmental clearance.
Calling the Polavaram multipurpose irrigation project a symbol of tribal deprivation and political-contractor collusion that has consumed over ₹62,000 crore of public money across two decades without complying with environmental laws, rehabilitation norms, or established technical requirements, Mr Sarma, one of the country's most prominent voices on governance accountability, has demanded a forensic audit and a comprehensive investigation by CBI and ED.
In his letter, Mr Sarma draws extensively on CAG report no4 of 2025 on the Polavaram project, which he describes as having laid bare a pattern of irregularities so systemic and sustained that both the Centre and the State must be held criminally accountable. "Polavaram styling itself as a 'National Project' has become a symbol of deprivation of tribal rights and a remunerative playground for politicians and contractors," he writes, in language that is measured but devastating.
What Polavaram Was Meant To Be
The Polavaram project was conceived as a major multipurpose dam on the River Godavari, designed to irrigate 291,000 hectares of agricultural land in Andhra Pradesh and provide drinking water to numerous urban and rural communities downstream. Work began 22 years ago. When Andhra Pradesh was bifurcated in 2014, Section 90 of the AP Reorganisation Act declared Polavaram a National Project, placing the Union government in charge of regulation, development, environmental and forest clearances, and compliance with rehabilitation and resettlement norms.
The project involves the submergence of 373 tribal habitations across 222 revenue villages, some of them in Odisha and Chhattisgarh, displacing 106,006 families. It is the treatment of these families that forms the moral core of Mr Sarma's indictment.
Two Decades, No Environment Clearance
Mr Sarma's most striking allegation is one of fundamental legal non-compliance. Despite spending over ₹25,000 crore, largely in payments to contractors appointed through what he describes as non-transparent procedures, neither the Union government nor the state has obtained the mandatory environmental clearance for the project in 22 years. The total estimated cost has now escalated to over ₹62,000 crore and may rise further.
"It is unfortunate that, to date, neither the Union government nor the state have failed to comply with the environmental norms, obtain environment clearance, even though the two governments have had no hesitation to spend more than ₹25,000 crore, mostly by way of payments to contractors," he writes.
The Union ministry of jal shakti and the central water commission (CWC), he adds, "willingly allowed themselves to become a party to such glaring irregularities openly committed by the State."
The Rehabilitation Scam
Of the more than 100,000 tribal families displaced by the project, official records show that only 11% have been relocated to rehabilitation and resettlement colonies and this after two full decades of project execution. The established norm requires that rehabilitation precede construction, a sequence that was simply ignored.
The CAG's field survey, cited by the former secretary, found that even the small fraction of families who were nominally rehabilitated did not receive their full entitlements. Housing provided was sub-standard, structurally unsafe and lacked basic sanitation. The prescribed land-for-land compensation was not given. In several cases, cash and other benefits went to individuals other than the actual displaced families.
In Mr Sarma's characterisation, drawing on the CAG's own findings: "In addition to serious shortfalls in R&R, the R&R programme itself amounted to a potential scam."
The remaining displaced tribal families, he writes, have been "forced to live in sub-human conditions, deprived of the lawful rights they are entitled to under the Fifth Schedule to the Constitution."
Contractor Irregularities: CAG's Findings
On the contracting side, the CAG report cited by Mr Sarma documents a catalogue of procedural violations. Works were awarded on a nomination basis with estimates revised in violation of rules. Contract agencies were selected by altering tender conditions selectively. Works were awarded to single tenderers in contravention of government rules through a reverse tendering process. Interest-free special revolving fund advances and special imprest amounts were sanctioned to contractors in violation of established rules, causing loss of interest to the government and providing undue financial benefit to the contractors. Bank guarantees submitted by contractors did not cover the full contract period and were not encashed before contract termination.
CAG also found that the whims of politicians overrode technical advice in the name of urgency on multiple occasions, causing what Mr Sarma describes as 'huge losses to the public exchequer'.
Structural Damage from Ignored Technical Protocols
The consequences of overriding technical advice were not merely financial. The CAG report found that deviations from the planned construction schedule, combined with the absence of a contractor to manage flood mitigation, resulted in floodwater being obstructed from its normal course. The spillway and spill channel were incomplete, forcing floodwater through gaps in the cofferdam and causing damage to partially constructed cofferdams and the diaphragm wall.
As of March 2023, the rectification of the diaphragm wall had not been undertaken, leaving critical infrastructure in a damaged and unrepaired state years after the damage occurred.
Six Questions, One Demand
Mr Sarma frames his letter around six pointed questions directed at the cabinet secretary, asking whether those responsible, politicians and officials alike, at both the Union government and state level, should not be held accountable for spending ₹60,000 crore without environmental compliance; for the trauma inflicted on tribal families; for the rehabilitation scam; for irregular contract awards; for structural damage caused by ignoring technical protocols; and for possible money laundering by contractors who received irregular benefits.
His demand is unambiguous: a forensic audit of the entire Polavaram project, followed by a comprehensive CBI and ED investigation to determine individual culpability and bring those responsible to book.
"Considering that more than two decades of such lawlessness has been witnessed in the case of Polavaram, it is high time that such a forensic audit is commissioned," Mr Sarma writes, adding a pointed warning: "Failing which, the public at large would be constrained to come to the conclusion that the Union government is hand in glove with the state's politicians and others in the unconscionable manner in which the Polavaram project has been implemented."
