Corporates come forward for irrigation projects

The retail sector boom is driving corporate giants like Reliance, L&T, ITC, Jain Irrigation and others to make a beeline for irrigation projects in Western Maharashtra as these companies want to have a secure supply chain for agro-products.

It is a win-win situation for the state government which is finding iit hard to raise money for various incomplete irrigation projects.

A senior state government official from the irrigation department said, "All these big corporates have given proposals to the state government to invest between Rs 500 crore and Rs 1,000 crore in the irrigation sector and complete the irrigation project in lieu of securing the rights to distribute water. On the land in the command areas of the irrigation project, they want to grow, vegetables, fruits and grains for their retail chains or food processing business."

However, the talks with these companies are in their nascent stages and nothing has been finalised yet but the state government is serious about privatising the irrigation sector and we might come out with a policy in a month or two on privatising the irrigation projects, he added.

The state government is seriously considering the proposals of these corporate giants but there is a hitch as these companies want a few thousand hectares and it will not be possible for the government to give such vast amounts of land to these corporates, he added.

Instead, we are looking at options like giving companies the rights to do contract farming in the command area which will ensure that the farmer remains the owner of the land and he does not oppose such projects.

Besides, the government can also think of providing a viability gap funding (VGF) to these companies as it is not possible for companies to recover their investments through the recovery of water charges alone.

While providing VGF, the government need not have to shell out cash also as it can be done through providing tax concessions to these companies for their other industrial or commercial projects in the state, the official suggested.