The Veligonda Project is an under-construction irrigation project in Andhra Pradesh's Prakasam district, under which 43.50 TMC (one thousand million cubic feet) of floodwater from the Krishna River will be drawn from the foreshore of the Srisailam Project Reservoir and carried through two tunnels to feed the Nallamala Sagar Reservoir. However, the project has experienced several delays and cost escalations, with the revised completion target set for 2026. The objective of the project is to provide irrigation facilities to 4,47,300 acres of land and drinking water to 15.25 Lakh people in 30 mandals of Prakasam, Nellore, and Kadapa Districts who have been affected by groundwater fluoride contamination.   

While government figures indicate that only 472.53 acres of private land will be acquired for the project, news reports estimate the figure at 40,000 acres. Eleven villages will be submerged due to the construction of the Nallamalla reservoir, affecting 3,863 families.

The project commenced in 2005 and was scheduled to be completed by 2008. In 2017, the oustees protested for enhanced compensation as per the 2013 Land Acquisition Act. Veligonda Project Oustees Committee convenor Galli Venkatram Reddy said, “We will soon start ‘Amaravati Chalo’ programme, seeking a better deal for the displaced people.”

By June 2019, the displaced families continued to live in congested houses in their villages, waiting for the promised rehabilitation package. They refused to leave even though the government had notified them as submerging villages were being submerged.

Officials announced a rehabilitation and resettlement package to construct settlement colonies with the entire infrastructure ready in place by the time the families shift. Six relief and rehabilitation centres were identified at Idupuru 1, 2 and 3, Thokapalli, Goguladinne, Vemulakota, and Ondutla. Due to the delay in project completion, the number of beneficiaries increased from 4,300 to 9,000 over time as families grew and people started getting married. 

In June 2019, farmers again demanded a better package as per the Land Acquisition Act of 2013, as well as compensation for the delay in implementing the relief packages. The displaced families argued that the Rs 12.5 lakh compensation being offered to them as part of the Rehabilitation and Resettlement (R&R) package was insufficient, as many of them have debt that had accumulated up to Rs 10 lakh. 

Earlier, the locals also explained that they were forced to borrow from private money lenders since their villages had been notified as submerged and all government benefits had ceased. The villagers demanded that the state government increase the compensation amount to at least Rs 20 lakh.

Officials identified around 7,555 families from 11 submerging villages and promised to construct rehabilitation colonies for them.

In March 2024, the then Chief Minister YS Jagan Mohan Reddy inaugurated the 18.82-km-long twin tunnels of the Poola Subbaiah Veligonda Project at Yeguvacherlopalli village in Dornala mandal of Prakasam district and stated that the government will spend Rs 1200 crore on the R&R (Rehabilitation and Resettlement) package, which will be completed by July or August.

In November 2024, CPI(M) politburo member B V Raghavulu requested the government to chalk out plans for the completion of the Veligonda project and allocate the necessary funds so that the reservoir can be filled by the next flood season, which is usually in July. 

Almost a year after its inauguration, Andhra Pradesh Water Resources Minister Nimmala Ramanaidu alleged that the Veligonda project still needs Rs 4,000 crore for completion and two more years to become fully operational.

In June 2025, he expressed displeasure over the delay and ordered officials to issue notices to agencies responsible for the sluggish progress.

Meanwhile, Prakasam Collector A Thameem Ansariya visited the Idupuru-1 Housing Colony, a rehabilitation colony for the project-affected people, and directed the housing and municipal officials to speed up the completion of houses currently under construction. 

While 2,310 houses have been sanctioned in the housing layout, only 154 houses have been completed so far.

On 5 April 2026, Minister Nimmala Rama Naidu announced that the state government would begin depositing relief and rehabilitation payments to families displaced by the Veligonda project from April 2026. The State Water Resources Minister, during his visit on 12 May 2026, directed officials to expedite the project works and assured immediate compensation relief to the affected families.