It caused a loss of Rs 14 crore, the complaint says, terming the alleged fraud "a premeditated exercise done by the Tourism Department and Ministry".
When contacted, Parulekar denied the allegations and said he was ready to face any kind of inquiry.
The complaint is based on information obtained under the Right to Information (RTI) Act and replies submitted by the Government in the Legislative Assembly, according to Khaunte, who represents Povorim constituency.
The contracts for cleaning the beaches have been awarded to Bhumika Cleantech Services and Ram Cleaners and Developers.
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The legislator has demanded that the contracts be terminated immediately so as to prevent further drain on the exchequer, and the money already paid to the contractors for 'the work not done' be recovered.
He also demands that a fresh tender should be issued after scaling down the minimum requirement for bidding so that local beach cleaning contractors can also bid.
The alleged scam came to light after the then Lokayukta
Superintendent of Police Sonia Narang wrote a letter to Lokayukta Registrar about the complaint she received from an Executive Engineer, who alleged that someone from the Lokayukta office demanded Rs one crore in bribe to avoid a raid.
Resisting all attempts for his exit, Rao had resigned in December 2015 only after a motion to remove him was moved in the State legislature.
Ashwin was arrested by SIT in Hyderabad in July last year based on an FIR filed against him by Lokayukta police.
The government is yet to finalise another candidate.