Khadse's announcement today at a press conference comes following Governor P C Alexander's meeting with the Finance and Planning secretaries, who apprised him about the financial situation of the State.

Meanwhile, contractors carrying out work for the KVDC have taken a stand against the State Government as the latter failed to pay the bills it owed to the former. Khadse's announcements mean there will be an additional financial burden on the State's exchequer.

Khadse said the KVDC owed a total of Rs 588 crore to the contractors. ``The payment of bills will begin from Monday. The KVDC has Rs 90 crore and the StateGovernment has given Rs 200 crore towards equity. The KVDC will borrow short-term loans from other corporations in the State to the tune of Rs 200 crore at the interest rate of 14.50 per cent. The remaining money will be borrowed from different financial institutions. In last couple of days, a total of 136 contractors have been paid their pending bills worth Rs 12 crore,'' the Irrigation Minister added.

Khadse said that the State Government has decided to concentrate only on constructing dams to impound 594 TMC water of the Krishna river. ``Constructing canals and water distribution network will be done only after 2001 as impounding water is the top priority of the government today. So far, 440 TMC water has been impounded and the remaining 154 TMC water will be impounded by March 2001. The project will successfully irrigate about 11.50 lakh hectares of land in the State. Water can be provided to 46 taluks, which are perennially drought-prone,'' Khadse added.

He said this water would bring in more revenuefor the state as there would be more crops, horticulture, fishing and other industrial activities. ``This is the only indirect way in which the KVDC can help the State Government in repaying the loans. The KVDC will be engaged in maintenance of the dams after 2001 and the State Government will have repay the loans,'' Khadse added.