India Infrastructure Research tracked 50 projects in the water supply and sewerage sector, each with a total project cost of over Rs 5 billion. These projects involve a combined investment of Rs 1.2 trillion. Of these, eight projects worth Rs 150 billion have been completed, 20 (Rs 406 billion) are under implementation, three (Rs 400 billion) have been awarded but work is yet to start and 19 (Rs 210 billion) have been announced.
Of these, 33 projects involving an investment of Rs 800 billion pertain to the expansion of water supply networks, 14 (Rs 283 billion) relate to the construction of sewage treatment facilities, two (Rs 46 billion) involve the development of storm water drains and one (Rs 37 billion) involves the setting up of additional capacity as well as expansion of the existing water supply and sewerage network.
Key completed projects
Eight water supply and sewerage projects, at an investment of about Rs 150 billion, were completed between January 2014 and December 2015. A year-wise comparison between these two years shows that most of the projects were completed in 2015.
Of the completed projects, seven projects worth Rs 143 billion involved the expansion of the water supply network while only one project (Rs 7 billion) involved the setting up of additional sewage treatment capacity. State-wise, the maximum investment has been in Telangana (two projects worth Rs 56 billion), followed by Maharashtra (Rs 26.5 billion) and Rajasthan (Rs 22 billion).
Among these, the Godavari Drinking Water Supply Project Phase I in Telangana entailed the maximum investment of Rs 37 billion. The project, which involved a capacity addition of 735 million litres per day (mld), was commissioned in November 2015. During the same month, the Telangana government also commissioned the Rs 19 billion Krishna Drinking Water Supply Project Phase III. This project has added 90 million gallons per day (mgd) to the water supply capacity in Hyderabad city. An-
other major project completed during the given period was the Rs 25 billion Swarnim Gujarat Saurashtra-Kutch Water Grid Project, which has augmented water supply in the dry areas of Kutch by about 1,650 mld.
Overall, these completed projects have created at least 4,135 mld of additional treatment capacity and expanded network length by at least 900 km. Based on the information available, the maximum capacity has been created in Gujarat at 1,650 mld, followed by Telangana at 1,145 mld.
Key projects under implementation
Of the total number of projects tracked, 20 entailing an investment of Rs 406 billion are under implementation. Segment-wise, 11 projects worth Rs 128 billion pertain to the expansion of water supply, seven projects (Rs 232 billion) involve the setting up of additional sewage treatment capacity and the remaining two projects relate to the improvement of the storm water drainage system. Overall, these projects are expected to create about 2,175 mld of additional capacity.
In terms of ownership, 16 projects entailing an investment of Rs 346 billion are being developed by the government (central/state/urban local bodies [ULBs]), while four (Rs 60 billion) are being developed on a public-private partnership (PPP) basis. Among the states, Maharashtra leads with over Rs 177 billion worth of projects under implementation, followed by Punjab at Rs 40 billion and Rajasthan at Rs 38 billion.
The top five under-implementation projects account for about 65 per cent (Rs 260 billion) of the total investment allocated to under-implementation projects. Among these, the Mumbai Sewage Disposal Project Stage II Component I (Priority Works) project alone has garnered investment of more than Rs 120 billion (35 per cent). Another major water supply and sewerage project under implementation is the Rs 38 billion Kolkata Environmental Improvement Investment Program Phase II. These two projects are likely to be completed by end-2018.
Further, two key projects – the Odisha Integrated Sanitation Improvement Project and the Chambal-Bhilwara Water Supply Project, Phase I – are behind schedule and are likely to miss their deadlines. The key reason identified for the time overrun are the delays in land acquisition and obtaining statutory approvals from government ministries and departments.
Key awarded projects
Between January 2014 and December 2015, three projects worth Rs 400 billion were awarded but construction work on these is yet to begin. Segment-wise, two projects worth Rs 365 billion pertain to the development of the water supply network while one involves both the setting up of additional capacity as well as expansion of the existing water supply and sewerage networks. All the three state government-promoted projects have been awarded to Larsen & Toubro Limited, either independently or in joint ventures with other contractors. These projects are expected to expand the water supply and sewerage network by 128,230 km.
The biggest project awarded during the period under consideration is the Rs 345 billion Telangana Drinking Water Grid Project. The project involves laying of over 125,000 km of pipelines across the state. This includes about 5,227 km of main trunk pipelines of 600 mm diameter and 45,809 km of secondary pipelines of 500 mm diameter. The other two projects awarded during the period are the Rs 37 billion Rajasthan Urban Sector Development Program Phase III and the Rs 19 billion Water Supply to 11 Peripheral Circles of Greater Hyderabad Municipal Corporation Project. These projects are expected to be completed by 2020.
Projects on the drawing board
Of the projects being considered, 19 involving an investment of Rs 210 billion have been planned to be taken up. Segment-wise, 13 projects worth Rs 165 billion pertain to the expansion of the water supply system and the re-maining six (Rs 45 billion) involve the setting up of additional sewage treatment capacity. Overall, projects in the planning stage are expected to create over 1,670 mld of additional treatment capacity and expand the network by 7,937 km.
In terms of ownership, 16 projects entailing an investment of Rs 180 billion are planned to be developed by the government (central/ state/ULBs), while three (Rs 30 billion) will be developed on a PPP basis.
Among the states, the maximum investment opportunity is in Karnataka, where three projects at an estimated cost of about Rs 50 billion are at the planning stage. Tamil Nadu and Andhra Pradesh follow at Rs 40 billion each.
The top five upcoming projects will entail investments of Rs 100 billion. Among these, the Cauvery Water Supply Scheme Stage V entails the maximum investment of Rs 32 billion, the contract for which is likely to be awarded in the next one year.
Conclusion
The water supply and sewerage sector offers a lucrative pipeline of 42 projects that are either under implementation or are to be taken up. The total value of these projects is estimated at over Rs 1 trillion.
Overall, projects in the pipeline are expected to create 3,845 mld of additional treatment capacity and expand the network by over 136,165 km. These projects will offer significant opportunities for domestic and international project developers, contractors, technology and equipment providers, and financiers.
