Privatisation of irrigation project draws interest

Maharashtra's experiment with privatising its irrigation project has received an overwhelming response from the corporate sector as 12 major corporates including Reliance, Mahindra, Godrej, ITC, IL&FS and other industrial majors have expressed interest in completing the Neera-Deoghar Dam in Pune district in lieu of rights over the water distribution, rights for contract farming in the command area and developing a mini hydroelectric project.

However, differences in the state cabinet over privatising the irrigation project is likely to hamper the chances of an experiment turning into reality.

The first pre-bid meeting of senior state government officials from the water resources ministry will be held on October 27 to finalise the terms and conditions in the bid document.

Speaking to Business Standard, a senior official from the water resource ministry of the state government said, "As this is a first of its kind experiment, both of us would like to discuss this before finalising the terms and conditions of the bid document."

We will like to know what concessions and rights these companies will like to have from us and they would be interested in knowing what we can offer in return for investing in the project, he added.

The Neera-Deoghar project in Pune district is a irrigation project with the storage capacity of 10 thousand million cubic feet (TMC) with an assured rainfall in the catchment area.

The Maharashtra government has already spent around Rs 700 crore and has built the dam and it will require another Rs 600 crore to Rs 700 crore to develop the distribution channels.

But as the state government lacks the fund to develop the distribution channels, water stored in the dam is wasted and that is why proposal for privatising the irrigation project came forward, he pointed out.

If we have to complete all the irrigation projects in the state, then we will require at least around Rs 40,000 crore over the next 10 years and we hope that nearly Rs 10,000 crore can be raised through privatisation of dams, he added.

However, the biggest hurdle for the proposal for privatisation is facing is the difference between the two ministers for water resources. Maharashtra has divided water resource ministry into two.

The Nationalist Congress Party MLA Ramraje Naik-Nimbalkar is the minister for water resources in Krishna Valley and for the rest of the state NCP president Sharad Pawar's nephew Ajit Pawar is the minister.

While Naik-Nimbalkar is in favour of privatisation, Pawar is opposing the proposal. Though the project is part of Naik-Nimbalkar's ministry, it is Pawar Jr, whose words carry more weight both in the cabinet and the party.

But, an official from the water resources ministry said, "There is nothing to worry as Pawar also supports the concept in-principle. But due to some constraints of local politics (Pawar comes from Pune district) he is opposing the proposal to privatise the Neera-Deoghar project. But we are confident that he will eventually give his nod to the privatisation."