Peenya Complex Project: A Tale of Delays and Financial Setbacks

Karnataka State Handicrafts Development Corporation Ltd’s Ambitious Project Faces Challenges

In 2018, Karnataka State Handicrafts Development Corporation Ltd (KSHDCL) started an ambitious project to build a multi-storey complex in Peenya Industrial Area. The goal was to create a warehouse, exhibition center, and office space, saving around Rs 50.7 lakh in annual rent. However, the project, which cost Rs 8.8 crore, has been plagued by delays, financial setbacks, and corrosion risks.

Delayed Construction and Corrosion Risks

• The building’s construction is far from complete due to delays in concreting.
• Unfinished columns have put the steel reinforcement at risk of corrosion.
• The project was supposed to be completed by March 2019.

Circumventing Tender Rules and Financial Mismanagement

The Comptroller and Auditor General (CAG) highlighted the sordid state of affairs, revealing that rules pertaining to transparency in tenders were circumvented by giving exemptions to the Karnataka Rural Infrastructure Development Ltd (KRIDL), the government agency entrusted with the construction.

• The work order was split into seven estimates, one for each floor of the building.
• Rs 88.9 lakh was released after the MoU was signed with KRIDL.
• In January 2019, KRIDL claimed that nearly 40% of the work had been completed and sought the release of 25% of the estimate, amounting to Rs 44.4 lakh.
• However, the full amount was not disbursed, triggering a chain of delays and causing the construction work to halt in May 2019.
• By then, Rs 1.1 crore had been spent on the project.

Lack of Progress and Government Response

In January 2020, KRIDL’s executive engineer requested the release of the balance amount and warned that the column steel reinforcement would get corroded if the concreting was not done. The company requested KRIDL to submit a revised estimate to complete the basement floor work to the level that the ground floor could be utilized. There has been no further progress in the work to date.

The state government endorsed KSHDCL’s reply that the project was decided to be executed in a phased manner based on the availability of funds and also because of a lack of skilled people to monitor the project.