Potential of India’s water structure scheme estimated at $270 Billion
July 18, 2019
The natural resource finds a mention in the Union budget, in NITI Aayog’s dire predictions of metros running dry and, now, in the calculations of private sector infrastructure players looking to make a buck.
A report by Bank of America Merrill Lynch, released on Tuesday, estimates that India needs to pump in $270 billion (about ₹18.5 trillion) over the next 5-15 years to meet its ambitions of piped water supply to all homes by 2024, cleaning the Ganga, interlinking rivers to redirect water to water-scarce regions and irrigation projects.
Brokerage firm JM Financial says the government’s Nal Se Jal scheme for piped water supply alone will need ₹6.3 trillion in investment.
In her budget speech, finance minister Nirmala Sitharaman said the Jal Shakti Ministry—which will combine the operations of the erstwhile water resources, river development and Ganga rejuvenation ministries—will work with states to ensure every rural house gets piped water by 2024.
For context, only 18.3% of rural households have piped water supply today. The budget— ₹9,150.36 crore for the National Rural Drinking Water Programme—is a 69% increase in allocation from the previous year.
The investment isn’t going to come without the private sector pitching in. In a July 14 interview to the Indian Express, Jal Shakti minister Gajendra Singh Shekhawat said the government is examining the public-private partnership model for water infra projects. This includes BOT (build, operate and transfer), DBOT (design, build, operate and transfer) and the hybrid annuity model (HAM), the last of which successfully brought in private capital and ramped up the speed at which highways were built in India.
Sandeep Garg, managing director and CEO, Welspun Enterprises, said in an interview the highway developer has started bidding for water projects as well.
“We’re looking at projects in sewage treatment, bulk water transmission and seawater desalination, either under the HAM or EPC model. We have already participated in bids for projects in sewage treatment and lift irrigation and we expect to win the first project in about three months.”
“While water is a state subject, there is a very strong presence of the Central government in Namami Gange and the river interlinking projects,” an infrastructure consultant told Mint on the condition of anonymity. “With 13 large projects on the anvil, river interlinking is going to be a huge opportunity but there is no clarity as of now on how this is going to be implemented. If these projects are to happen, river interlinking alone will need lakhs of crores in investment.