The original plan aimed to lift 10 tmcft of water from Kondapochamma Sagar and fill the Keshavapuram reservoir, from where the water would be pumped to Hyderabad. The cancellation was confirmed by the Municipal Administration department on Tuesday, with the decision made public on Wednesday.

Government sources indicated that the Mallannasagar option would save approximately Rs 2,000 crore. Of the 15 tmcft to be lifted, 10 tmcft will be used for Hyderabad's drinking water, while the remaining 5 tmcft will be used to replenish Osmansagar and Himayathsagar.

The Cabinet approved this shift, and tenders are expected to be invited for a new project titled "Godavari Drinking Water Supply Phase-2 and Rejuvenation of Osmansagar and Himayathsagar for Musi River Cleanup." The new plan includes laying a pipeline to transport 15 tmcft of water from Mallannasagar to the Ghanpur pumphouse for distribution to Hyderabad and the reservoirs.

Sources highlighted that Mallannasagar has a capacity of 50 tmcft, whereas Kondapochamma Sagar can only hold 16 tmcft. This change reduces the need for multiple pumping stations, cutting operational costs and electricity usage. The cost of supplying water from the Godavari and Krishna rivers is expected to decrease from Rs 48 per KLD to Rs 4 per KLD once the project is completed.

The Keshavapuram project contract had been awarded to Megha Engineering and Infrastructure Limited (MEIL), but work did not start. MEIL requested a revision of the cost estimates based on the 2024 rates, which was rejected by the state government.