The Hindu : Work begins on Tirupur water, sanitation project

Online edition of India's National Newspaper
Tuesday, May 20, 2003

Southern States

Southern States - Tamil Nadu

Work begins on Tirupur water, sanitation project

By M. Soundariya Preetha

COIMBATORE May 19. Work on the long-awaited water and sanitation project for Tirupur has begun, raising hopes of a final solution to the scarcity faced by hundreds of processing units in the knitwear town.

For these units, water is one of the main raw materials. Receiving treated water on their doorstep could well become a reality as the Tirupur Water Supply and Sanitation Project, implemented by the New Tirupur Area Development Corporation Limited (NTADCL), is expected to be commissioned by 2005.

About 700 processing units in the region consume, on an average, 100 million litres of water-120 mld a day, say industry sources. Of this, they buy around 70 mld. The units are now buying water at around Rs. 30 per 1,000 litres and are incurring huge expenses on treating it.

The special-purpose NTADCL has been established with the primary objective of implementing the Tirupur Water Supply and Sanitation Project.

It envisages supply to dyeing and bleaching units, and to domestic consumers in Tirupur Local Planning Area (TLPA), comprising the municipality, 15 village panchayats and three town panchayats.

It is proposed to supply water to five wayside unions also.

Under the project, it is proposed to draw 185 mld, and about two-thirds of the total supply would be for industrial consumption (processing units).

Sources in the NTADCL said the construction work for the project, taken up under a "lumpsum turnkey contract", included building of an intake well, a water treatment plant, a master balancing reservoir and water distribution stations, laying of pipelines and provision of low-cost sanitation, a sewerage pumping station and a sewerage treatment plant.

Work on river intake well and for some of the water distribution stations was on. Excavation for laying of pipelines was also under way in some areas.

Sameer Vyas, managing director, NTADCL, told The Hindu that the company had completed financial closure for a project cost of Rs. 1,023 crores. It expected 20 per cent returns per annum on the "unleveraged project investment" (total project cost minus the interest during construction).

The construction contract had been finalised for around Rs. 650 crores, said Mr. Vyas. The equity component was Rs. 322.7 crores and subordinate debt, Rs. 86.5 crores. The debt component was Rs. 613.8 crores.

The Tamil Nadu Water Investment Company, promoted by the Government of Tamil Nadu and the IL & FS, was one of the main equity holders (Rs. 105 crores). The others included the Tirupur Exporters' Association, the AIDEC Fund, the Wilbursmith Associates/Mahindra and Mahindra/United Utilities consortium, the Life Insurance Corporation and the General Insurance Corporation.

The senior lenders included the Industrial Development Bank of India, the Small Industries Development Bank of India, the Life Insurance Corporation, the State Bank of India and the Indian Overseas Bank.

Mr. Vyas said there was no guarantee from the State or Central Government for the project. However, the State Government would contribute towards creation of a "debt service reserve fund" and a "water shortage period fund", which would be used only in case of necessity.

Water charges were the main source of revenue for the company.

While the processing units would purchase water at Rs. 45 per 1,000 litres, the municipality would get the same quantity for Rs. 5.

Asked whether the processing units could make the purchase at such a cost, A. Sakthivel, president, Tirupur Exporters Association, pointed out that water was their main requirement. "As of now we are starved of water and the availability of water on their doorstep will benefit the units to a great extent."

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