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Desalination Industry in India suffers from common Infrastructure Malaise of bad planning and blame game as the India’s largest Desalination Project in Chennai Shuts Down

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Desalination & Water Treatment in India

The Indian Desalination industry is facing the woes of the larger infrastructure sector with companies fighting with the government over contractual issues even as the infrastructure goes to waste. Note the PPP model of government private sector has not really worked very well in India. The private companies are constantly fighting with the government and the fighting inevitably lands in courts. With the justice system in India known for its long delays, the infrastructure in question lies uselessly leading to general suffering. The fighting between the ADAG group and the government owned Metro Authority in Delhi is well known. Both sides are fighting while the showpiece Delhi Airport Metro line lies dormant as its tunnels develop huge leakages. The problems with the toll roads is also well known with one of the busiest toll roads on NH-8 Delhi-Gurgaon constantly seeing fighting between the concessionaire and the Government.

Now the largest desalination project in India inaugurated In 2010 with much fanfare has also shut down. The reason being the high salinity content of the sea water that is used as input by the plant. Note Chennai which is the largest city in South India suffers from a huge water shortage problem. Water Treatment and desalination plants are crucial for the growth and sustainability of the city. However the common Indian infrastructure problem has afflicted the IVRCL built desalination plant as well. IVRCL is blaming the government while the government blames the company. Rating agency Fitch is raising questions about the future of the SPV which owns this desalination plant as the revenues are not enough to cover the debt payments.


Chennai Water Desalination Ltd, which produces water through a desalination plant, is in a spot of trouble with the Chennai Metropolitan Water Supply and Sewerage Board, over what constitutes “forced shut down’’. Chennai Water Desalination Ltd is a subsidiary of the Hyderabad-based infrastructure company IVRCL. Chennai Water Desalination Ltd is 85 per cent owned by IVRCL Assets and Holdings Ltd, a subsidiary of IVRCL Infrastructure & Projects Ltd. The other 15 per cent is held by a subsidiary of Befesa Medio Ambiente S.A, of Spain. Fitch notes that the weak financial position of the board has “so far not contributed to any pressure points in the project receiving payments’’

China far ahead of India in Desalination Investment

Note China is doing astoundingly well in the area of desalination even though its plant are losing currently. The government realizes that Water is going to be a massive problem in the future and is ready to lose money in the initial projects in order to build a world ruling industry for the future. The Government has plans to build 20 massive plants by 2020 despite losing money with the first $4 billion plant.

NY Times

 Towering over the Bohai Sea shoreline on this city’s outskirts, the Beijiang Power and Desalination Plant is a 26-billion-renminbi technical marvel: an ultrahigh-temperature, coal-fired generator with state-of-the-art pollution controls, mated to advanced Israeli equipment that uses its leftover heat to distill seawater into fresh water. There is but one wrinkle in the $4 billion plant: The desalted water costs twice as much to produce as it sells for. Nevertheless, the owner of the complex, a government-run conglomerate called S.D.I.C., is moving to quadruple the plant’s desalinating capacity, making it China’s largest. The government has, and it is. At the government’s order, China is rapidly becoming one of the world’s biggest growth markets for desalted water. The latest goal is to quadruple production by 2020, from the current 680,000 cubic meters, or 180 million gallons, a day to as many as three million cubic meters, about 800 million gallons, equivalent to nearly a dozen more 200,000-ton-a-day plants like the one being expanded in Beijiang. The National Development and Reform Commission, China’s top-level state planning agency, is drafting plans to give preferential treatment to domestic companies that build desalting equipment or patent desalting technologies. There is talk of tax breaks and low-interest loans to encourage domestic production.


Tamil Nadu Chief Minister M Karunanidhi inaugurated India’s largest desalination plant in Chennai on Saturday. The facility will draw water from the Bay of Bengal, process it using the reverse osmosis technology and supply purified water to the city. The Rs. 600-crore plant at Minjur, around 35 km north of here, is the state’s first seawater desalination plant. Spread across 60 acres, the plant can process and supply 100 million litres of water per day, an amount that could cater to the needs of around 2 million people. Chennai has a population of nearly 4.5 million

Read more about Desalination in India.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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