A Vigilance and Enforcement investigation initiated by the present Telugu Desam party-led coalition government in Andhra Pradesh has revealed alleged large-scale irregularities in cement procurement for housing projects meant for the poor during the previous YSR Congress Party (YSRCP) government.
According to the probe findings, orders far exceeding eligibility norms were placed with Bharathi Cements, a company linked to the family of former chief minister Y S Jagan Mohan Reddy, under the guise of supplying materials for housing construction.
Investigators found that instead of procuring cement proportionately from multiple manufacturers based on plant capacity, authorities purchased nearly three times the eligible quantity from Bharathi Cements.
A total of 3,31,528 tonnes of cement was procured from Bharati Cements, far exceeding the permitted share, with payments amounting to Rs 165 crore made to the firm in violation of guidelines. As per the norms, only about Rs 55 crore worth of cement should have been purchased.
While Bharathi Cements received orders far beyond its capacity-based entitlement, several major cement manufacturers—including UltraTech, Ramco, My Home, Penna, Sagar, Zuari, KCP, JSW, Rain, Parasakti, Bhavya, NCL, Sri Chakra and Srijaya Jyothi—received lower-than-eligible orders.
Apart from Bharathi Cements, excess procurement was also made from India Cements, Chettinad and Dalmia, with purchases exceeding their eligible capacities by nearly twofold.
The vigilance report concluded that senior officials of the State Housing Corporation allegedly colluded with political leaders of the previous government in executing the irregularities.
It also noted that the introduction of a centralised procurement system appeared to have been part of a pre-planned strategy to facilitate the purchases.
The alleged irregularities are linked to the “Option-3” housing model introduced by the previous government in 2019.
Under this scheme, the state undertook construction of houses for beneficiaries unable to build homes with central subsidies alone.
Approximately 3.51 lakh beneficiaries opted for government-built houses, expecting completion by the state.
However, the probe suggests that construction responsibilities were handed over to individuals linked to the ruling party at the time who lacked technical expertise or experience in construction.
Contracts reportedly worth hundreds and thousands of crores were awarded without standard tendering, agreements, or performance guarantees.
Large advances from central housing funds were released to contractors even before work commenced, the report alleged.
