"We have detected misappropriation of around Rs 7.92 lakh so far. The exact amount of misappropriation could be known only after completion of the inquiry," DSP (Vigilance) Subash Swain said.
A case was registered against forest range officer, Sorada, who was in charge of the project work on charge of misappropriating funds, he said.
The range officer was not immediately available for comment.
The government had sanctioned Rs 35 lakh for the eco-tourism project in the peacock habitat areas at Cheramaria and its adjoining areas, including Pakidi hill, for the development of roads, digging of ponds, construction of cottages, architectural eco-design and construction of an overhead tank.
The project was scheduled to be completed by March. The forest officials have also submitted Utilisation certificate (UC) for the project.
"During inquiry, vigilance sleuths detected execution of work worth only Rs 14 lakh. Materials running into Rs 6 lakh were lying unutilised", said the DSP.
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The project officials have shown payment of wages to labourers without executing works worth Rs 6 lakh, Swain said adding inquiry into construction of architectural eco-design and overhead tank will commence soon.
The eco-tourism project was sanctioned by the state government after local people and Ganjam district peacock protection committee demanded it to draw more visitors to the area. A large number of peacocks are seen freely roaming in and around Pakidi hill.