Essar Seeks To Buy Narmada Water Entitlement Rights
The Sardar Sarovar Narmada Nigam, a fully-owned state government organisation, hopes to partly meet its fund requirement by selling water entitlement rights to industries being planned in the arid and coastal zones of Gujarat.
Units buying the rights can avoid setting up desalinisation plants to convert sea water into usable sweet water.
The Nigam is also negotiating with the Ahmedabad Municipal Corporation for an investment of Rs 300 crore. The usually water-starved AMC will receive an assured water supply for 7 to 10 years if it makes the investment at this juncture.
The investment will be repaid in a period of 7 to 10 years. The Nigam is in the process of structuring the investment pattern and deciding whether an interest should be offered as in the case of Narmada bonds.
Industries buying entitlement rights at this stage will be sold water at rates fixed today instead of being hit by price escalation in future, Nigam sources said.
Essar, which had earlier planned to put up a desalinisation plant at Jamnagar, has now decided to defer its plans till an agreement is stuck with the Nigam.
We are going to sell water at Rs 10 per thousand litres. The price of desalinising water works out to Rs 18 at present, Nigam managing director A K Luke said. He further said that it will be possible for the Nigam to earn Rs 1,000 crore a year by selling water as a branded product. An estimated 4.75 lakh acre-feet of water will be surplus even after meeting the irrigational requirements of Gujarat. The surplus will be several times more if Madhya Pradesh is not able to utilise its full potential of 18.25 million acre-feet of water.
The Gujarat government is banking on a strong possibility of Madhya Pradesh being unable to set up 29 major dams and 300 medium and minor dams necessary for the full utilisation of the Narmada waters. The MP government has barely been able to do the foundation work for the Narmada Sagar dam and is nowhere near taking up either the canal work or the remaining dams in the immediate future. It has also not tied up the financing of the project nor planned for the vast rehabilitation of displaced people.
The authorised share capital of the Nigam was recently raised from Rs 3,000 crore to Rs 6,000 crore. All budgetary support extended to the project will be in the form of equity capital, thus enabling the government to earn a premium through disinvestments in the future.
The total expenditure on the project so far is Rs 4,700 crore.
The amount has come in the form of the state government's equity capital which was Rs 3,000 crore