The audit examined roadworks implemented by the Kerala State Transport Project (KSTP), focusing on detailed project reports, bidding documents, design changes, alterations in project scope and compliance with contractual conditions. The programme was launched after the floods and landslides of 2018 to rebuild damaged infrastructure across the state.
A total of 29 roads covering 718.94 km in 13 districts were selected for reconstruction during 2019–20 and 2020–21. The projects had a sanctioned cost of Rs. 51.2 bn, while the CAG examined 10 roadworks as part of its compliance audit.
The audit identified the largest irregularity in the upgradation of the Alappuzha–Changanassery Road. It found that deviations from the prescribed process for approving changes to bridge-widening works resulted in an undue benefit of Rs. 392.7 mn to the contractor. A further Rs. 282.2 mn in undue financial benefit was linked to the splitting of payment stages for earthwork and ground-improvement works.
In some cases, the revised payment arrangement allowed payments to be released between 333 and 911 days before the scheduled completion of the relevant work stages. The report also found that the Uruvachal–Maruthayi road contract, awarded for Rs. 1 bn in October 2020, was fully subcontracted for Rs. 936.7 mn in August 2021, contrary to the contract conditions. According to the audit, the arrangement weakened the tendering process because bids were required to be assessed from contractors who had qualified through technical evaluation.