Vizag water supply project under govt's lens

The Rs-450 crore Visakhapatnam Industrial Water Supply Project executed by Larsen & Toubro's ECC group has come under scanner of the state government, during the ongoing review of major projects being implemented under the public-private participation.

The project which was designed to supply 264 million litres of water per day (MLD) from the Godavari river to the Vizag steel factory and Simhadri power project besides Vizag municipal corporation is almost completed.

According to reliable sources, the political leadership has taken a very critical view about the equity spending by the L&T Group.

According to them, L&T has spent only Rs 13 crore out of the Rs 26 crore equity committed by it.

The sources said that in case of a change in the government's decision, the Andhra Pradesh Industrial Infrastructure Corporation (APIIC), which has 33 per cent stake in the company, may possibly be asked to run the company.

The project is domiciled in a special purpose vehicle (SPV) in the name of Visakhapatnam Industrial Water Supply Company Limited (VIWSCo).

The project was mainly funded by the public sector, though it was decided to transfer the majority equity in VIWSCo to the L&T consortium on build own, operate and transfer (BOOT) basis.

Rashtriya Ispath Nigam Limited (RINL) has, the main beneficiary of the project, committed to invest Rs 240 crore in the project.

The Vizag municipal corporation and NTPC are providing Rs 50 crore each. These advances are expected to be adjusted in water charges against the utilisation of water.

After reviewing the specifics of the project execution and the future arrangement, major industries minister Botsa Satyanarayana is learnt to have discussed the possible ways of delinking the execution of the project from the operations of the water supply company.

It is learnt that the state government has reservations about handing over the water supply project to a private company after it has been executed almost totally by public funding.

The major irrigation minister, who visited APIIC premises today, reviewed several other projects being implemented through the Andhra Pradesh Industrial Infrastructure Corporation like Pharma City, Andhra Pradesh Special Economic Zone and others.

Official sources told Business Standard that the minister would soon visit all the major industrial estates in a bid to know the various impediments coming in the way of industrial growth in the state.