Although the water supply and waste market is large and fragmented and is served by several private firms, a few major companies have emerged as leading players. Over the past few years, private players in India’s sewage treatment market have witnessed significant growth in orders primarily with the introduction of new schemes and regulatory policies that focus on improving water and sanitation facilities in the country. State governments and urban local bodies are engaging with private players in taking up projects on a public-private partnership (PPP) basis to leverage their technical expertise and attract private investments. Government initiatives, such as the Namami Gange programme, the Smart Cities Mission and the Swachh Bharat Mission, have provided further impetus to private sector participation (PSP) in the sector. There has been an increase in the number of contracts awarded for the construction of water treatment plants (WTPs), waste water treatment plants (WWTPs), sewerage networks, sewage treatment plants (STPs), laying of pipelines, building underground drainage systems, etc.
Indian Infrastructure reviews the activities of a few large players in the water supply, sanitation and waste management segments that have undertaken some big-ticket projects in the past three to four years…
The Indian Hume Pipe Company Limited
Established in 1926, The Indian Hume Pipe Company Limited (IHP) has been undertaking the development of water supply and sewage management systems on a turnkey basis. It is present in all water supply-related activities, including provision of water supply in urban and rural areas, pumping machinery, tunnel lining, treatment plants, overhead tanks and other allied civil works.
In the past one and a half years, the company has successfully completed a number of water supply and sewerage projects. These include an alternative water supply system in Nellore district of Andhra Pradesh with the Gundlakamma reservoir as the water source (Rs 393.2 million); rehabilitation, strengthening and improvement of the sewerage system in the old city area of Hyderabad (Rs 476.49 million); a comprehensive protected water supply scheme in Nalgonda district of Telangana (Rs 870.51 million); and a WTP in Manmad, Maharashtra, with 10 million litres per day (mld) capacity.
During 2018-19 (till February 2019), IHP won a number of urban water supply contracts worth over Rs 13.62 billion. In December 2018, the company bagged contracts for the construction of drinking water supply projects worth Rs 7.02 billion in Guntur city and Vizianagaram district of Andhra Pradesh. Further, the company also won a Rs 2.05 billion contract for the execution of Package II of the Andhra Pradesh Urban Water Supply and Septage Management Improvement Project.
In terms of financial performance, during the first nine months of 2018-19 (till December 2018), the company recorded a total revenue of 11.34 billion and a net profit of Rs 574 million. The order book of the company (as on January 31, 2019) stood at Rs 47.08 billion, an increase of around 40 per cent as against Rs 33.67 billion during the corresponding period in 2017-18.
Larsen & Toubro Limited
Ranked among the largest private sector companies in the water and waste sector, Larsen & Toubro’s (L&T) water and effluent treatment business vertical undertakes development of water supply and sewerage infrastructure across the country. The company, established in 1938, provides complete solutions in the water segment covering urban and rural water supply, industrial water supply and treatment plants, WWTPs, desalination, rehabilitation of canals and unaccounted for water (UFW) projects to monitor loss of water. It offers basic design, detailed engineering, procurement, project management, project execution, commissioning and operation and maintenance (O&M) for water transmission, treatment and distribution; and waste water collection, treatment and disposal.
Key projects completed by L&T in the past year and a half include the construction of a sewerage network and WWTP at Gayespur (West Bengal), implementation of the Gadag Water Supply Scheme (Karnataka) and the Rampur Sewerage Scheme (Uttar Pradesh), the construction of a common effluent treatment plant (CETP) at Narol (Gujarat), a UFW project in Bengaluru (Karnataka), and the Bisalpur Jaipur Water Supply Project in Rajasthan.
In February 2019, the company bagged an engineering, procurement and construction (EPC) contract worth Rs 16.8 billion from the Pune Municipal Corporation for revamping the entire water supply system of Pune city. It also won a contract from the Andhra Pradesh Drinking Water Supply Corporation for execution of drinking water supply projects in Srikakulam and East Godavari districts. In addition, in December 2018, L&T bagged two contracts from the Andhra Pradesh Capital Region Development Authority for developing trunk infrastructure facilities in Amaravati, including investigation, design and construction of storm water drains, water supply and sewerage systems, STPs, reuse waterlines and an artificial waterbody compatible with trunk infrastructure.
In March 2018, the company’s water and effluent treatment business secured the contract for developing the integrated infrastructure package area-based development for the Udaipur smart city. The scope of work includes design, rehabilitation and upgradation of a 24×7 water supply network including a WTP, sewerage network, storm water drains and other allied instrumentation works. The work is estimated to cost Rs 10.58 billion.
On the financial front, the infrastructure segment of the company, which comprises water and effluent treatment projects among others, earned a net revenue of Rs 455.6 billion during April-December 2018 (stand-alone figures), an increase of 19 per cent from Rs 382.2 billion earned during the corresponding period in 2017-18. L&T posted a profit of Rs 55 billion during April-December 2018, an increase of around 31 per cent from the Rs 42 billion profit earned during the same period in 2017-18.
Hindustan Construction Company Limited
Established in 1926, Hindustan Construction Company [HCC] Limited undertakes large-scale integrated water supply projects on an EPC basis. The company is primarily engaged in the construction of WTPs, STPs, water grids, and effluent treatment plants and laying of water transmission and distribution pipelines.
Key projects undertaken by HCC include the development of water and sewage treatment facilities in Okhla, Tihar Jail and Wazirabad in Delhi, the Swarnim Gujarat Kutch Water Grid Project, the Bandra Effluent and Influent Disposal Project, and the Bhandup Water Treatment Complex.
During April-December 2018, the company’s total income from operations stood at Rs 11.02 billion, a decline of around 10 per cent from the Rs 12.03 billion income during the same period in 2017-18. Further, HCC posted a profit of Rs 100 million in April-December 2018, a decrease of about 68 per cent from the Rs 310 million profit earned during the corresponding period of 2017-18.
VA Tech WABAG Limited
Founded in 1924, VA Tech WABAG Limited is a Chennai-based company involved in the development of drinking WTPs, WWTPs and desalination plants in both municipal and industrial sectors. The company has successfully completed over 6,000 municipal and industrial projects globally. The company has executed the state-of-the-art Nemmeli desalination plant project in Chennai that was commissioned in December 2013. The plant contributes over 12.5 per cent of daily water supply and caters to a population of over 1.5 million in Chennai city.
In November 2018, VA Tech inaugurated and commissioned a 140 mld STP in Varanasi, Uttar Pradesh. The project, funded by the Japan International Cooperation Agency, is the first and the largest STP implemented under the Namami Gange programme. The scope of work of the project included the design, engineering, supply, installation, testing and commissioning of the STP along with O&M for a period of 10 years. As part of the project, the firm has also deployed the active sludge process technology with provision for biogas-based power generation from sludge production.
The key projects currently under execution by VA Tech include the construction of an effluent treatment plant in Bathinda for HPCL-Mittal Energy Limited, implementation of the Integrated Water Supply Project in Barmer (Rajasthan), construction of a sewerage system in Karmalichak (Bihar), and construction of STPs in K&C Valley of Bengaluru and at Rithala in Delhi. Recently, in February 2019, the company secured a contract worth Rs 5.2 billion for the engineering, construction and O&M of a 20 mld CETP for the Jajmau Leather Cluster in Uttar Pradesh under the Namami Gange programme. The scope of work includes engineering, supply, erection, construction and commissioning of a 20 mld tertiary treatment plant with pretreatment for sulphide removal and tertiary treatment using ultrafiltration technology.
Meanwhile, the company has also won contracts for the construction of a 30 mld seawater desalination plant (expandable to 70 mld) in Mangaluru from Mangalore Refinery and Petrochemicals Limited (worth Rs 4.67 billion). The company has also bagged orders worth Rs 559 million from the Chennai Metropolitan Water Supply and Sewerage Board for O&M of its water supply and sewerage infrastructure.
On the financial front, VA Tech registered a profit of Rs 643 million during April-December 2018 (consolidated figures). This is a 12.7 per cent decline in profits from Rs 737 million earned during the same period in 2017-18. The company’s operating revenue stood at Rs 21.02 billion during April-December 2018, as against Rs 24.2 billion during the corresponding period in 2017-18.
Veolia Water India Private Limited
Incorporated in 2000, Veolia Water India Private Limited is a subsidiary of France-based Veolia Water. It provides services pertaining to design, building, maintaining and upgrading water and waste water treatment facilities. The company has been involved in undertaking 24×7 water supply projects and waste water-related activities such as collection, conveyance, treatment and recycling of sewage.
In 2013, Veolia was appointed by the Delhi Jal Board for the Nangloi 24×7 water supply project in Delhi on a PPP basis. The project consisted of improvement and revamping of the existing water supply, transmission and distribution network under the command area of Nangloi WTP. The company has also executed the Nilothi WWTP project in Delhi.
In May 2018, Veolia India acquired a 70 per cent stake in Ankleshwar Cleaner Process Technology Centre Private Limited, which specialises in hazardous waste processing in Gujarat. Veolia is currently running five pilot projects in the cities of Belgaum, Gulbarga and Hubli-Dharwad in Karnataka to demonstrate the feasibility of 24×7 continuous water supply. It is also involved in undertaking 24×7 water supply projects in Nagpur, Jamshedpur and Chennai, and operates a 39 mld WWTP at the multimodal international cargo hub and airport at Nagpur, Maharashtra.
Vishvaraj Infrastructure Limited
Headquartered in Nagpur, Vishvaraj Infrastructure Limited (VIL) has been undertaking PPP projects in the water and waste management segments across the country. The company, established in 1999, commissioned the first 24×7 water supply project in the country. The Nagpur 24×7 water supply project remains, to date, the most successful example of a PPP in the water sector. The company has also developed a 200 mld STP in Nagpur on a PPP basis.
Other key completed projects include the Magadi 24×7 water supply project and the Shahabad Yadgir 24×7 water supply project in Karnataka. Meanwhile, VIL is currently in the process of executing various water supply and sewerage projects. These include the 24×7 water supply project for the Pimpri-Chinchwad Municipal Corporation, a 40 mld STP in Somalwada in Nagpur, and a 4 mld STP in Hazari Pahad (Nagpur, Maharashtra). Other key projects include the Bidar and Basavakalyan 24×7 water supply projects, the Kachimet STP (1 mld), the Sonegaon STP (0.3 mld), the Dabha STP (4 mld), O&M of the Naya Raipur water supply project, and O&M of the Warje WTP in Pune.
Ramky Infrastructure Limited
Incorporated in 1994, Ramky Infrastructure has a presence in both the water supply and waste management segments. The company under-takes projects involving the construction of WTPs, elevated reservoirs and ground-level service reservoirs, STPs, CETPs, underground drainage systems and tertiary treatment plants and laying of water transmission and distribution pipelines.
Some of the key projects executed by the company include the construction of a 172 mld STP in Nagole, a 30 mld STP in Neyveli, underground drainage system in Thane, a WTP in Amaravati, a WTP in Bhanasimal, Gujarat, waste management projects in Odisha and Punjab, integrated waste management facilities in Hyderabad, etc. The company has also set up waste-to-energy plants in Bengaluru, Guwahati, Delhi and Hyderabad. Other projects executed in the waste management segment include the Coastal Waste Management Project in Visakhapatnam, the Madhya Pradesh Waste Management Project in Pithampur, the Uttar Pradesh Waste Management Project in Kanpur, and integrated waste management facilities in Haldia.
During the period April-December 2018, the company’s total income stood at Rs 8.59 billion, registering a year-on-year decline of around 19 per cent from Rs 10.62 billion in the corresponding period of 2017-18. It posted a net loss of Rs 39.94 million during the April-December 2018 period.
In conclusion, the prospects of PSP in the water supply and waste management segments appear bright in the long term. The experience from various ongoing and upcoming projects is expected to aid private players in bringing to market new and improved technologies and equipment. However, addressing key issues and concerns is important in order to attract private investment and increase the pace of project execution.