M'shtra irrigation gets first FDI plan

Malaysian firm proposes to invest Rs 1,700 crore in seven Krishna valley projects

The Maharashtra government has received the first-ever proposal for foreign direct investment in irrigation from a Malaysian infrastructure company, T J Harmoni Worldwide Sdn Bhd.

The company has shown interest in completing seven major projects in the Krishna valley by investing around Rs 1,700 crore, in exchange for rights to develop hydro power projects and 1 lakh hectare of land.

The proposal was submitted by the company in response to the worldwide advertisement given by the state government seeking public-private partnership in the irrigation.

However, government does not seem enthused by the conditions laid down by the company. The proposal says that Harmoni will invest Rs 1,676.20 crore and complete seven projects""Bhama-Askhed, Gunjwani, Neera-Deoghar, Urmodi, Dhom, Jambre and Ghatprabha "" over a period of four years.

In exchange for completing these projects, the company has asked for rights over the water in dams for 15 years and for contract farming in the area. The company will supply water to farmers free of cost but farmers will have to cultivate crops which the company wants and it will also buy entire produce of the farmers.

The alternative suggested by the company says the state government provide 1 lakh hectare of land on a 99-year lease for palm tree plantations.

The company has also asked for rights to develop 700 Mega watt (Mw) hydro power station at Hiranyakeshi and 80 Mw station on Koyna left bank canal. Besides this company has also asked for rights to develop mini hydro electricity plants at 43 other dams which will generate 448 Mw. Besides this company has asked for exclusive rights to develop and operate tourist spots in dam area.

The proposal also says that, company will spend another Rs 4,663 crore to develop these power stations and it will require another Rs 1,000 crore for debt servicing. Thus company has submitted a proposal of investment of around Rs 7,000 crore in Krishna valley area.

A senior official from the water resource ministry said, "The first impression of the project among both political and administrative executive is not very positive as this proposal is going to have a major impact on socio-economic structure of the area."

"Secondly, the amount of land which the company is asking is simply not ava ilable in this area and then according to our estimates company has overestimated the hydro-power potential of the area," he added.

"But these are early days, we have received the proposal a few days ago and only after going through the fine print, we can come to any conclusion on whether to go ahead and start negotiations with the company," he said.