The inordinate delay in closing of land deals by government agencies has irked the Andhra Pradesh government, as this is hurting its much-hyped irrigation projects. The reason: AP proposed to finance irrigation projects worth about Rs 8,600 crore out of the land sale proceeds.

It may be recalled that state has budgeted Rs 13,000 crore for irrigation in this fiscal. Any delay in the fund-raising process would make the construction schedules go topsy-turvy.

Interestingly, the land mass, which is to be sold, is concentrated around Hyderabad and Visakhapatnam. Three of the state undertakings?APIIC, HUDA and APHB?are involved in the sale of these lands.

Sources said it would be difficult to close land sale as the deals are mired under litigation. ??The disputes are still being heard, we cannot hasten the process,?? an official said. Hence, the officials have made it clear to the government that it would be difficult to close the sales early. Interestingly, most of these deals are now stagnant and it would take longer time to realise the proceeds, they say.

This has put the finance department in a fix. While the department is under obligation to augment funds for the irrigation projects, it is helpless since it cannot raise external borrowings due to the Fiscal Responsibility and Budget Management Act (FRBM Act). ??The irrigation projects are very close to the chief minister Rajasekhara Reddy?s heart and we have to maintain the schedules,?? a senior officer said.

Suggesting a way out, the CM had asked these three agencies to identify the land mass that is not under dispute and had fixed a target for each agency at Rs 1,200 crore before the end of September. ??Unless this happens, it would be difficult to release funds in the third and fourth quarter,?? sources said.

The finance department had been clearing irrigation bills of Rs 500 crore per month during April and May and has stepped this up to Rs 700 crore since June 2007. ??The going is good now,?? senior officials said.

Government spent about Rs 20,000 crore on these projects during last 3 years. While projects like Jhanjhavathi, Pedderu, Pedda Gadda and, Surampalam are already complete, work is underway in other projects. Under ‘Telugu Ganga’ (a project conceived by late NT Rama Rao for providing drinking water to Chennai city), the government plans irrigation facility for 50,000 acres in the current year. Similarly, another 50,000 acre will be irrigated under the Alimineti Madhava Reddy canal.