Recent Developments: A year of new awards and capacity expansion

A year of new awards and capacity expansion

February 2019

The urban water supply and sanitation sector has witnessed a surge in activity in the past year. Tremendous progress was recorded in project completion as well as award. Meanwhile, civic agencies have digitalised business processes and introduced online services to improve service provision. In addition, urban local bodies (ULBs) are taking steps to achieve financial independence. However, the slow pace of project implementation, cost and time overruns, and lack of private sector investment are issues that continue to depress growth.

Indian Infrastructure tracks recent key developments in the sector…

  • On the policy front, the Central Ground Water Authority of the Ministry of Water Resources, River Development and Ganga Rejuvenation notified revised guidelines for groundwater extraction in the country. As per the new guidelines, a water conservation fee will be levied on the use of groundwater depending on the area, type of industry and quantum of groundwater withdrawal. Further, the entire process for the grant of no-objection certificates will be carried out through a web-based application system. The revised guidelines will be made effective from June 1, 2019.
  • The Gujarat government, in May 2018, launched the Reuse of Treated Waste Water Policy in the state. The policy aims at creating a water grid for the reuse of treated waste water from urban areas and plans to construct 161 sewage treatment plants (STPs) to treat such water to enable use for non-drinking purposes.
  • In early 2019, the Punjab state cabinet constituted a subcommittee to study ways of regulating the use of water through conservation and management of the vital resource. The committee has been mandated to suggest measures to tackle the critical water situation.
  • Under Union Budget 2019-20, the Ministry of Housing and Urban Affairs (MoHUA) receieved a central outlay of Rs 480.32 billion. The allocation is substantially higher than the budget estimates of Rs 417.65 billion and the revised estimates of Rs 429.65 billion for 2018-19.
  • Considerable progress has been made under the three flagship central programmes. A total of 100 cities have been selected under the Smart Cities Mission for development into smart cities. Special purpose vehciles (SPVs) have been incorporated for all the cities and over 534 projects worth Rs 101.16 billion have already been completed under the mission. Meanwhile, around 1,177 projects, costing Rs 434.93 billion, are currently under implementation.
  • So far, around 154 projects (worth Rs 13.25 billion) in the water supply sector and 40 projects (Rs 5.2 billion) in the sewerage and septage management sector have been completed under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT).
  • The Swachh Bharat Mission (Urban) has also achieved considerable progress during the past year. Urban areas of 21 states/ union territories have been declared open defecation free (ODF). Till now, about 5.46 million household toilets and 0.46 million community and public toilets have been constructed under the mission and over 85 per cent of the total wards in the country are practising 100 per cent door-to-door waste collection. In addition, 46.03 per cent of the total urban waste collected is being properly treated and processed.
  • In January 2019, the MoHUA launched the fourth edition of the annual cleanliness survey of urban areas – the Swachh Survekshan 2019. This year, the survey will be conducted across 4,237 towns and cities, as compared to 4,203 towns and cities in 2018. Also, the Ease of Living Index, the first-ever index to assess quality of life in cities, was released by the government on August 13, 2018 with Pune, Navi Mumbai and Greater Mumbai being the top three most liveable cities in the country (of the 111 surveyed).
  • Significant progress has also been recorded under the Namami Gange programme. As of December 2018, the central government had sanctioned 261 projects at an estimated cost of Rs 255.63 billion. Of these, a total of 76 projects stand completed, while work is currently under way on about 123 projects. Around 29 projects have been completed during the past year under the programme.
  • The past year was marked by the inauguration of several new projects. A water supply project in Agra (Gangajal project) worth Rs 28.8 billion and sewerage projects in Varanasi worth Rs 4.25 billion were inaugurated. Besides, in October 2018, the Rajasthan government commissioned the Dravyavati river rejuvenation project in Jaipur (Rs 16.76 billion). A total of five STPs with a combined capacity of 170 million litres per day (mld) were installed along the river.
  • Other key projects inaugurated during the year were the 60 mld STP in Kengeri under Cauvery Stage IV, Phase II, sewerage works projects in Karnataka, a 172.5 km sewerage network in Saidapur zone of Patna in Bihar (Rs 4.31 billion), and a 77 mld water treatment plant (WTP) in Jadcherla under the Mission Bhagiratha Water Grid Project in Telangana.
  • Foundation stones were laid for several key water supply and sewerage projects. These include Phase I of the Godavari and Penna river interlinking project in Andhra Pradesh (Rs 62 billion), a drinking water supply project BASUDHA (Buxy Jagabandhu Assured Water Supply to Habitations) in Odisha (Rs 6 billion), a sewerage project in Adityapur, Jharkhand (Rs 2.55 billion), two projects in the trans-Ganga/Yamuna area in Uttar Pradesh (Rs 7.68 billion), the Krishna WTP in Andhra Pradesh (Rs 7.41 billion), a sewerage project in Agra under AMRUT, and 11 projects for rejuvenation of the Yamuna river under the Namami Gange programme.
  • Several water supply and sewerage projects were approved during the past year. In March 2018, the Tamil Nadu government approved a drinking water supply scheme for Mullaperiyar at an estimated cost of Rs 11.5 billion. The project plans to supply 125 mld of water from the Lower Camp hydroelectric power station to Madurai city through a 143 km long pipeline, and will service approximately 2 million people in the city. Further, in May 2018, the Andhra Pradesh government granted administrative sanction for implementing the Andhra Pradesh Urban Water Supply and Septage Management Improvement Project in two phases. The project entails an investment of Rs 41.88 billion and focuses on improving urban infrastructure facilities in 42 ULBs not covered under AMRUT.
  • Other key projects proposed/approved during the past year include construction of integrated storm water drains in the Kovalam basin in Chennai (Rs 42.25 billion), construction of storm water drains and STPs in Hyderabad, Telangana, in two phases (Rs 50 billion), a sewerage project in Visakhapatnam (Rs 7.26 billion), and a water grid project in the Marathwada region of Maharashtra.
  • On the financial front, several developments have taken place during the year. The municipal corporations of Bhopal, Ahmedabad and Pune have raised funds through the issue of municipal bonds to finance urban development projects, including water supply and waste management projects.
  • Besides, several multilateral funding agencies have granted loans for various projects and schemes. The Japan International Cooperation Agency signed loan agreements worth Rs 73.63 billion for funding the Cauvery Water Supply Scheme, Phase V (Rs 55.5 billion) in Karnataka and a water desalination plant in Perur, Tamil Nadu (Rs 18.13 billion). In addition, the World Bank approved a loan of Rs 60 billion for the Atal Bhujal Yojana to improve groundwater management in priority areas across the country. Meanwhile, the Asian Development Bank also approved loans for funding various water supply, drainage and sewerage projects across the country.
  • Steps have been taken towards promoting digitalisation and advanced technologies in the sector. In March 2018, the Hyderabad Metropolitan Water Supply and Sewerage Board introduced the Waterconnect application to facilitate online processing of new water connections and bill payment by consumers. The board is also planning to install digital screens  at control centres for real-time display of water connections, pipelines and sewerage line status. Further, in April 2018, Raipur Smart City Limited also launched a mobile application, Mor-Raipur, to deal with complaints related to water pipeline leakages. The Nagpur Municipal Corporation has also launched a mobile application, Nagpur Water, in collaboration with Orange City Water Private Limited to facilitate easier bill payment.
  • The Tiruchirappalli City Municipal Corporation deployed automatic meter reading devices for three major bulk water consumers in the city on a pilot basis. Meanwhile, the Brihanmumbai Municipal Corporation  is planning to develop a new software to digitally calculate water consumption, with the aim to make the water billing process more efficient.

Overall, the water supply and sanitation sector has grown substantially over the past year. Continuous government support by way of new programmes and schemes and new innovative funding options, such as municipal bonds, have helped in sector development. However, to maintain the growth momentum, measures such as capacity building of ULBs, easing clearances and timely completion of projects will be essential.