CAG Report No. 11 of 2025 — Implementation of Smart City Mission, Government of Karnataka

Implementation of Projects and Monitoring
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The State Government replied (April 2025) that the diversion works could not
be completed due to paucity of funds. However, the reply was silent regarding
the audit observation on wastage of drinking water and non-feasibility of
pumping drinking water from Bugudunahalli Tank to Amanikere Tank.
4.12 Parks and Public Spaces
The projects under “Parks and Public Spaces” included developing green areas
and parks, transforming open spaces with recreational avenues, waterfront
development etc. The physical and financial progress of the projects taken up
under ‘parks and public spaces’ as of June 2024 is given in Table 4.13.
Table 4.13: Physical and financial progress under Parks and Public Spaces
Sl.
No
Smart City Physical progress (in numbers) Financial progress (₹ in crore)
Total Completed Ongoing Project Cost Expenditure
1 Belagavi 22 18 4 85.58 51.94
2 Bengaluru 2 2 0 43.07 43.07
3 Davanagere 4 4 0 13.35 13.35
4 Hubballi-Dharwad 13 12 1 266.13 198.66
5 Mangaluru 13 6 7 91.56 42.41
6 Shivamogga 14 13 1 154.86 152.27
7 Tumakuru 41 40 1 97.79 92.17
Grand Total 109 95 14 752.34 593.87
Source: Information furnished by Smart Cities
Audit test checked 40 out of 109 projects taken up under “Parks and Public
Spaces”. Major observations are detailed below:
4.12.1 Non-achievement of rejuvenation of Unkal lake
HDSCL took up the project ‘Upgradation of Unkal lake including operation and
maintenance’ in two phases to rejuvenate the deteriorated lake which had been
a primary drinking water source for Hubballi city. The scope of Phase-I works
included removing Water Hyacinth, installing aerators, trash barriers, bio
frames, ecological floating beds, ecological bridge filter at the inlet of the lake
and bioremediation. The scope of Phase-II included fencing of the lake,
development of pathway/causeway along the edge of the lake, construction of
gabion wall, development of existing bund, refurbishment of structures etc.
Audit observed that the contractor stopped Phase I work in 2021 after achieving
financial progress of ₹3.67 crore, while there was no physical progress in
respect of Phase II work. Only an amount of ₹1.63 crore was paid (July 2021)
to the contractor towards mobilisation advance under Phase II.
HDSCL issued (February 2022) termination notice to the contractor
implementing Phase I of the project. The PMC in its report (June 2022) also
recommended foreclosure of the contract as the contractor had not completed
the work as per the milestone design.