The Hindu : Andhra Pradesh / Visakhapatnam News : Delay in Godavari issue entails loss for VIWSCo

Online edition of India's National Newspaper
Friday, Dec 17, 2004

Andhra Pradesh

Andhra Pradesh - Visakhapatnam

Delay in Godavari issue entails loss for VIWSCo

By Santosh Patnaik

VISAKHAPATNAM: The decision of the State Government to review Visakhapatnam Industrial Water Supply Project (VIWSP) and the plea of the Visakhapatnam Municipal Corporation (VMC) for taking over maintenance have given rise to doubts on when Godavari waters will finally reach the city.

Though there is no dispute on bringing Godavari waters through a pipeline, the recent developments have delayed the commercial operations of Visakhapatnam Industrial Water Supply Company (VIWSCo). As per the original plan, VIWSCo was supposed to supply by November 1, 2004.

The operations of VIWSCo are linked to L&T Holdings and their partners taking over management control of VIWSCo. This has certain pre-requisites like the bulk water supply agreements, which have to be signed by Rashtriya Ispat Nigam Limited (RINL) (currently agreed in-principle, but under processing for their confirmation by the board) and National Thermal Power Corporation (NTPC). VIWSCo has to enter into an O&M agreement with L&T ECC (draft agreement can be signed after some time). After this, the canal O&M can be done by VIWSCo.

Rs. 3 crore interest

Delay in start of commercial operations is adding approximately Rs. 3 crores interest per month to the final project cost, according to the VIWSCo Director, Anand Chiplunkar. Ruling out any penalty provision if VMC fails to receive even after their preparedness to draw water, he said there was no penalty provision. "However, it is possible by VMC to draw this water (they were drawing similar quantity earlier) to meet their obligation under the bulk water supply agreement signed with it," he pointed out.

Dr. Chiplunkar also agreed that delay would affect VIWSCo's operations as the payment of loan and interest to RINL, NTPC and VMC was predicted on receiving revenues from the sale of water to these entities as consumers.

He discounted reports that the Cabinet Sub-Committee has been set up to review the project and to explore giving the Government more control and giving no role to L&T in the project. The Committee of Ministers set up by the Chief Minister were reviewing the project.

According to Dr. Chiplunkar the committee was concerned about the high interest rates charged by RINL, NTPC and VMC as interest formed almost 38 per cent of the cost of supplying water. If these rates could be reduced it would be beneficial as the lenders were also the consumers. VIWSCo wants the project continued under the current structure that was arrived at after going through a tender process approved by the Infrastructure Authority, Cabinet Sub-Committee and the Cabinet. The Government and VMC will hold 49 per cent stake in VIWSCo.

Printer friendly page
Send this article to Friends by E-Mail

Andhra Pradesh

News Update

Stories in this Section

Delay in Godavari issue entails loss for VIWSCo

Tension in hospital over boy's death

Lakhs have darshan at Kanakamahalakshmi temple

IT raids on TV channel office

Around The City

In Visakhapatnam Today