Desalination in India

The Desalination Industry in India is in a bad state, with India’s first big desalination plant in the southern state of Tamil Nadu shutting down after just 2 years of operation. The first plant built on a PPP basis remains mired in conflict between the owners IVRCL and the Government. While China is strongly pushing ahead with desalination despite huge losses, India remains far behind. Desalination technology is still in its infancy and has a long way to go before becoming a mainstream technology.

Using the PPP model in such an industry is foolhardy given the immaturity of the technology. Even as the first plant remains shut, Chennai is going to see the opening of a second huge 100 million liter a day plant. This plant is being built by another top infrastructure company VA Tech Wabag in collaboration with Israeli company IDE. It remains to be seen whether this plant can be successful as it is coming in the same location Chennai. Note Chennai is one of the most water distressed big cities in India suffering from chronic water supply problems.

First Indian Desalination Plant Shuts Down

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.

Hindu

VA Tech Wabag will commission the Rs 1,033-crore seawater desalination plant it is building for Chennai Metrowater by the month end, according to an authorised source. The 100-million-litre-a-day project nearing completion on the East Coast Road about 35 km to the South of Chennai VA Tech Wabag, the Chennai-based multinational water treatment company, is setting up the project jointly with IDE Technologies of Israel for the water utility. The desalination plant is funded by a grant from the Central Government. The company will also handle the operation and maintenance of the plant for seven years. The project is among the largest of its kind and the second in Chennai. The first desalination project set up in the private sector is at Minjur in North Chennai and has a long-term concession to supply water to the utility.