IVRCL Infrastructures and Projects Limited was given the formal approval to build a 100-million litres a day sea water desalination plant that is meant to supply water to Chennai. The Rs 500-crore project would result in the first such desalination plant in India. | |
| A Tamil Nadu government press release said that today a Bulk Water Purchase Agreement (BWPA) was signed between IVRCL and the Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) with the aim of getting the desalination plant ready. |
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| Under the BWPA, CMWSSB is to provide 60 acres of land in Minjur near Chennai for the construction of a sea water desalination plant on a design, build, own, operate and transfer basis. CMWSSB is to purchase water from the plant for 25 years at rates stipulated in the agreement. |
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| IVRCL has to achieve financial closure and also get all the necessary statutory approvals to finish the project within 21 months, said the company's vice-chairman and managing director E Sudhir Reddy. As a first step, financial closure would have to be achieved within 180 days, he added. |
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| Spanish company Befesa Construction is to provide IVRCL with technical collaboration for the project. |
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| The equity component in the project will be Rs 125 crore of which 70 per cent will come from IVRCL and the balance from Befesa. |
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| Reddy said that a special purpose vehicle (SPV) called Chennai Water Desalination had been floated to handle the project. IVRCL and Befesa would soon hold a 70 per cent stake and a 30 per cent stake respectively in the SPV. This is IVRCL's biggest project in terms of its own investment, said Reddy. |
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| Infrastructure Development Finance Company (IDFC) has been mandated to arrange for the Rs 375 crore debt for the project. The BWPA has stipulated that the SPV is to sell water to the Tamil Nadu government at a price of Rs 48 for every kilolitre ( 1,000 litres) for the next 25 years. Once the 25-year period is over, the desalination plant will be transferred to the state government. |
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| The overall plan has envisaged that the water from the desalination plant will be sent into an underground sump in Minjur. CMWSSB will draw water from the sump and pump the same to Red Hills reservoir. Finally, the water will be released into the city grid. |
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