The government's Nal Se Jal scheme for piped water supply alone may need Rs 6.3 lakh crore. For context, only 18.3 percent of rural households have piped water supply today
The Bank of America Merrill Lynch estimates that the Indian government’s water infrastructure efforts would require $270 billion (about Rs 18.5 lakh crore) of capital expenditure over the next 5-15 year period.
This estimate includes last-mile water connections, the Ganga River clean-up effort, irrigation projects, and interlinking of rivers to redirect the resource to water-scarce regions.
India’s new infrastructure frontier thus isn’t highways, airports or smart cities. It’s water.
The massive investment involved in planning and rolling out the government’s promise to deliver piped water to all rural homes by 2024, amid shortages, is the pre-eminent challenge before the country.
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.
Brokerage firm JM Financial says the government’s Nal Se Jal scheme for piped water supply alone will need Rs 6.3 lakh crore 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 percent of rural households have piped water supply today. The Budget allocation of Rs 9,150.36 crore for the National Rural Drinking Water Programme is a 69 percent 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 also started bidding for water projects.
"We are 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 expect to win the first project in about three months," Garg said.
"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. What the private sector is more keen on will be smaller projects with a lot less risk involved," he added.