High water tariffs put off investors

Mandideep losing firms to Budni

Water scarcity and high water tariffs are likely to drive investors away from the second phase of the Mandideep industrial project, also known as the Satlapur growth centre and proposed to be developed as a textile park. The park is coming up at a cost of Rs 2,500 crore.

A number of textile firms, including Bhaskar Industries like Anant Spinning Mills, Abhishek Industries, and Vertex Textiles, had shown interest in the park. However, industry sources said, these firms were likely to give the centre a miss a due to the severe water crisis in the area.

Investment is now flowing towards Budni. The Verdhman group has proposed setting up a composite textile mill there instead of in Satlapur. Similarly, a Hong Kong firm called Pacific Textiles has also planned to set up shop at Budni. The Trident group, too, wants a plot at Budni.

"Water is available at Rs 12.50 per kilolitre in Mandideep and there is an acute shortage of water during summer," said an industry source, whose company is planning to shift its proposed project from Satlapur to Budni.

"If the state wants to attract investment in the textile sector, sites should be developed in areas contiguous to the Narmada river--the sole water supply source in the state."

The ministry of textiles has appointed Infrastructure Leasing & Financial Services (IL&FS) as consultant for the project. IL&FS is learnt to be conducting a feasibility study for the project, which will be forwarded to the Project Approval Committee (PAC) of the ministry for further approval.

The managing director of the Audyogik Kendra Vikas Nigam, Bhopal, M S Khan, denied that there was water scarcity in the area. "We have 20 million litres of water each day available for industry," he said. But the rates have already been decided upon and may go up further. "We may opt for the build-own-operate mode if industrialists get agree upon it," he said.

The state government has handed over the first private water supply project in Dewas to a Baroda-based firm, which will supply water to the arid industrial area at a much higher rate of Rs 26.75 per kilolitre. Not only water problems, but civic issues also haunt Mandideep. "Civic problems are choking growth in the area. Our requests fall on deaf ears," said D K Jain, president, Mandideep Association of Industries.

In its industrial promotion policy, 2004, the state government announced the creation of special industrial area development authorities (SIADA) to ensure water supply and address other civic issues.