The water and wastewater sector is served by a large number of private players that have been pioneers in driving technology advancements over the past few years. Government initiatives such as the Smart Cities Mission, the Swachh Bharat Mission and the Namami Gange programme have laid greater emphasis on the sector, making it lucrative for private players. Further, state governments have also drafted policies regarding management of water and wastewater, thereby expanding the scope of participation by different players. The past few years have witnessed a surge in the contracts awarded for the construction of water treatment plants (WTPs), wastewater treatment plants (WWTPs), sewerage networks, laying of pipelines and underground drainage systems, etc. At this juncture, private sector participation has become crucial for the growth of the sector as it not only brings in significant technology expertise, but is also a major source of funding given the limited resources with the government.
Indian Infrastructure reviews the activities of some of the key players in the water and wastewater sector…
The Indian Hume Pipe Company Limited
Established in 1926, The Indian Hume Pipe Company Limited (IHP) is involved in executing turnkey projects for the development of water supply and sewage management systems throughout the country. It is present in all water supply-related activities, including construction of treatment plants, overhead tanks, tunnel lining and infrastructure for the provision of water supply in urban and rural areas, and other allied civil works.
Key projects that have been recently completed by the company in the water supply and sewerage segment include comprehensive water supply improvements in Malkajgiri under the Greater Hyderabad Municipal Corporation (Rs 1.4 billion), the Pulakurthy Lift Irrigation Scheme in a joint venture at Kurnool in Andhra Pradesh (Rs 886.3 million), comprehensive water supply service improvements for the Badvel municipality in Andhra Pradesh (Rs 880.7 million) and the Guna water supply project in Madhya Pradesh (Rs 765.5 million).
In March 2019, IHP bagged two contracts aggregating Rs 2.5 billion from the Raipur Municipal Corporation. The project cost for the two packages under the Augmentation of Water Supply Scheme for Raipur, Phase II, Packages IV and V, is Rs 1.2 billion and Rs 1.3 billion respectively. With regard to its financial performance, the company earned total revenues of Rs 8.35 billion during the first six months of 2019-20 (till September 2019). During the same time period, IHP recorded a net profit of Rs 351.5 million, a decline of about 25 per cent from the Rs 467.8 million earned during the corresponding period in 2018-19.
Larsen & Toubro
Larsen & Toubro (L&T) is ranked among the largest private sector companies in the water and waste sector. Its water and effluent treatment business offers a wide range of facilities such as creating world-class water infrastructure across every area of the water and wastewater spectrum.
The company has completed a large number of key projects across the country. These include construction of a sewerage network and WWTP at Gayespur in West Bengal, implementation of the Gadag Water Supply Scheme in Karnataka and the Rampur Sewerage Scheme in Uttar Pradesh, construction of a common effluent treatment plant at Narol in Gujarat, and implementation of the Bisalpur Jaipur Water Supply Project in Rajasthan.
In January 2020, the company bagged a contract from the Bangalore Water Supply and Sewerage Board for providing water from the Cauvery river to 110 villages within Bruhat Bangalore Mahanagara Palike limits and bulk water supply of 775 million litres per day (mld). It also won an engineering, procurement and construction contract from the Public Health Engineering Department, West Bengal, for various civil works of the 24×7 Nandigram Water Supply Scheme.
In 2019, the company’s water and effluent treatment business secured the contract for implementation of the Augmentation of Dhanbad Water Supply Scheme, Phase II. It also won a contract from the Delhi Jal Board (DJB) for setting up a WTP in Chandrawal under the Delhi Water Supply Improvement Project.
In terms of financial performance, the infrastructure segment of the company, which comprises water and effluent treatment projects, among others, earned a net revenue of Rs 477 billion during April-December 2019 (stand-alone figures), an increase of 4.7 per cent from the Rs 455.6 billion earned during the corresponding period in 2018-19. Besides, the infrastructure segment reported gross earnings of Rs 28.51 billion during April-December 2019.
Hindustan Construction Company Limited
Established in 1926, Hindustan Construction Company [HCC] Limited offers a wide range of facilities in the water treatment and transmission segments.
The major projects completed 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 in Mumbai, and the Bhandup Water Treatment Complex in Mumbai.
During April-December 2019, the company’s income from operations stood at Rs 28.94 billion, a decline of over 4 per cent from the Rs 30.19 billion income during the same period in 2018-19. Further, HCC’s profits of Rs 531.7 million during April-December 2019 registered a great improvement from the loss of Rs 15.35 billion in the corresponding period of 2018-19.
VA Tech WABAG Limited
Founded in 1924, Chennai-based VA Tech WABAG Limited serves both the municipal and industrial sectors through the development of WTPs, WWTPs, desalination plants and sludge treatment plants. So far, it has successfully completed over 6,000 municipal and industrial projects globally. The company has set up a 45 mld tertiary treatment reverse osmosis plant at Koyambedu in Chennai.
Recently, in January 2020, VA Tech won two contracts for the development of water supply projects in Bhagalpur and Coimbatore at a cost of Rs 2.78 billion and Rs 940 million respectively. The scope of work involves the development of a 90 mld capacity WTP in Bhagalpur and a 178 mld capacity WTP at Coimbatore. In July 2019, the company secured a contract worth Rs 11.87 billion from Bihar Urban Infrastructure Development Corporation Limited for the development of sewage treatment plants (STPs) in the Digha and Kankarbagh zones and sewerage networks of over 450 km under the Namami Gange programme. The company has also bagged a project worth Rs 5.75 billion, under the National Mission for Clean Ganga in West Bengal. The scope of the project comprises the designing, building, rehabilitation and operation of STPs at Howrah, Bally, Baranagar and Kamarhati in West Bengal. The project is being implemented on a hybrid annuity basis (HAM) through the public-private partnership (PPP) model.
Besides, VA Tech has also signed a contract worth Rs 14.77 billion with the Uttar Pradesh government for taking up the operation and maintenance (O&M) of STPs in Agra and Ghaziabad. The project is based on the one city, one operator model, under which the company will operate, maintain and manage the system in both the cities for a period of 10 years, extendable for an additional period of five years.
On the financial front, VA Tech registered a profit of Rs 605 million during April-December 2019 (consolidated figures). This is a decline of about 6 per cent in profits from the Rs 643 million earned during the corresponding period in 2018-19. The company’s operating revenues stood at Rs 17.72 billion during April-December 2019, as against Rs 21.02 billion during the corresponding period in 2018-19.
Suez
French utility company Suez is a leading player in developing water and wastewater treatment services for both municipal and industrial use. It has designed and built more than 250 drinking water and sanitation plants across India. Suez treats over 1,000 mld of sewage through its facilities in the country, of which about 300 mld is fit to be used for various non-potable purposes.
Key projects completed by Suez include the development of WTPs at Kengeri, Chikkabanavara and Kadugodi in Bengaluru at a cost of €11 million and the 68 mld Delhi Gate Nalla STP in New Delhi. It has also executed India’s first STP based on the membrane bioreactor technology in Cubbon Park, Bengaluru.
In July 2019, Suez bagged a contract from DJB to build and operate an STP at Okhla. The plant, estimated to cost €145 million, will have a treatment capacity of 564,000 cubic metres per day. Later, in October 2019, Suez won the contract to manage the entire sewer network and all the WWTPs in Lucknow, Uttar Pradesh. Worth €98.3 million, the contract includes the 10-year O&M of 1.6 km of sewer network, three WTPs and eight sewage pumping stations. Further, in December 2019, Suez received a contract worth €72 million for the extension, rehabilitation and operation of the drinking water distribution system in Mangaluru under the 24×7 Water Supply Project. In terms of financial performance, the company’s revenue from its business in Asia stood at €392 million during January-September 2019. This is an increase of over 24 per cent from the €315 million in the corresponding period in 2018.
Veolia Water India Private Limited
Veolia Water India Private Limited, a subsidiary of France-based Veolia Water, has been providing services pertaining to designing, building, maintaining and upgrading water and wastewater treatment facilities since its incorporation in the year 2000. The company has been working along with urban local bodies to construct and operate WTPs, STPs and desalination plants as well as provide services for water supply.
In July 2019, Veolia won a contract from the Greater Mohali Area Development Authority for setting up a WTP in Sinhpur, Punjab. The plant will be constructed on 33 acres of land at an estimated cost of Rs 1.15 billion for augmentation of supply of treated canal water from the Bhakhra main line. The project is expected to be commissioned by December 2020.
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. The acquisition was at an aggregate value of €43 million. Besides, the company has successfully commissioned two projects for the Pune Municipal Corporation at a cost of Rs 387 million, involving the construction of a sewerage pumping station at Topkhana and a 30 mld STP at Baner. Besides, it has also undertaken the Nangloi 24×7 water supply project for DJB on a PPP basis. The project consisted of improving and revamping the existing water supply, transmission and distribution network under the command area of the Nangloi WTP. The company has also executed the Nilothi WWTP project in Delhi.
Essel Infraprojects Limited
The Essel Group entered the infrastructure segment through its venture, Essel Infraprojects Limited (EIL), in 2007.
In 2016, the company signed an MoU with the West Bengal government to invest Rs 40 billion in the execution of various water supply and waste projects in the state. The MoU is a part of Essel Infra’s plans to invest Rs 100 billion in West Bengal on projects including sanitation and water treatment projects worth Rs 20 billion, an over 500 tonne per day municipal solid waste project to convert waste to energy at an investment of Rs 20 billion, among others.
In 2017, the company won a project to build India’s first STP under the HAM-based PPP mode at Varanasi. The 50 mld STP was awarded by the Uttar Pradesh Jal Nigam under the Namami Gange programme. Under the contract, the O&M facilities will be provided by the company for a period of 15 years.
Later, in 2018, EIL signed an agreement with Gujarat Water Infrastructure Limited to set up a 100 mld seawater desalination plant at Jodiya in Jamnagar district through a special purpose vehicle (SPV), Jodiya Water Desalination Limited. The SPV will invest around Rs 7.5 billion as capital investment and Rs 1 billion annually as recurring expenditure. In return, the state government has agreed to purchase water at 70 paise per litre for two years, and this will rise by 3 per cent annually.
Tata Projects Limited
Founded in 1979, Tata Projects Limited (TPL) was established as an engineering, procurement and construction company in the engineering sector of the Tata Group. In the water and wastewater segment, the company is involved in the construction of industrial and municipal water treatment facilities, with expertise in filtration, desalination, effluent treatment and seawater intake.
In October, TPL commissioned the 47.5 km riverfront under the Dravyavati River Rejuvenation Project, which entailed an investment of Rs 16.76 billion. It aims to treat 170 mld of wastewater, create green spaces and social spaces, and reduce pollution. The implementing agency for the project is the Jaipur Development Authority.
Over the years, TPL’s turnover has increased – from Rs 34.44 billion in 2014-15 to Rs 1.3 trillion in 2018-19 (provisional). Besides, the profit before tax of the company was estimated at Rs 39 billion in 2018-19.
The way ahead
From the development of water and wastewater treatment facilities on the HAM-based PPP model to the introduction of the one city, one operator model, the water and wastewater market in India has experienced a paradigm shift in the past few years. However, the government should lend a helping hand to sector development by systematically dealing with constraints faced by private players.