In the midst of many promising opportunities, the water sector is grappling with problems related to slow project off-take and liquidity concerns.
As we welcome the New Year, it is a good time to reflect on the developments in the water sector in 2015. Interesting and far-reaching changes are expected in this sector in 2016.
With a new notification in November 2015, all industries that draw groundwater for their operations will now have to take a no-objection certificate (NOC) from the Central Ground Water Authority (CGWA) to extract groundwater. The CGWA has revised its 2012 guidelines on ¨evaluation of proposals for groundwater extractionö recently, which if enforced could impact water-intensive industries like mineral water bottling plants or major tanker businesses operating in water-scarce or ¨over-exploitedö zones. The new guidelines can ensure that several industries dependent on groundwater in severely parched parts of UP, Haryana, Rajasthan and other states will come under CGWA scanner now. They may be asked to re-use recycled waste-water instead of groundwater depending on the groundwater table in their area. The Pollution Control Board has also asked for industries in certain categories to go for zero-liquid discharge (ZLD) systems, or else risk being asked to close down their operations. Textile industries in Haryana have been mandated to go for ZLD solutions. This is creating opportunities for solution providers in wastewater recycling, evaporation and water conservation.
Sea water desalination promises to offer solutions for water scarcity in the coastal areas. Tamil Nadu is planning to come up with large desalination plants in Chennai, as well as Ramanathapuram and Tuticorin. These plants are likely to be tendered and awarded in 2016, and be accompanied by a number of smaller industrial desalination plants in the power and metal sectors. Largely based on reverse osmosis membrane technology, these plants would reduce the dependence on scarce fresh water sources. Wastewater recycling is another major opportunity area. Currently less than 1 per cent of the total wastewater in India is recycled. But there is increasing pressure on industries like refineries, metals, chemicals, textiles and tanneries to recycle their effluents. Opportunities are being developed where municipal sewage is being treated, and supplied to industrial clusters with a public private partnership model. The Union Government has been driving a few major initiatives creating opportunities in the water sector. One of those is the Smart Cities Initiative where 100 major cities are likely to come up across India. These cities would have modern water supply and sanitation facilities, creating major opportunities for the sector. The Ganga River Cleaning Project is one of the largest environmental engineering projects in the world, and will require a number of sewage recycling, online monitoring and effluent treatment plants along the banks of the river. About 2.9 billion cubic metres of sewage goes into the river daily, and the government has announced USD 850 million spending in the next five years to prevent discharge from the 118 cities and towns into the river.
The Ministry of Drinking Water Supply and Sanitation is also looking at a large number of community drinking water plants in rural areas. These units would ensure dispensing of safe and clean drinking water in villages, thereby improving the health of those communities. Contaminants like fluoride, arsenic, iron, nitrates and salinity would need to be removed from the ground water.
In the midst of all these promising opportunities, the water sector is also grappling with problems related to slow project offtake and liquidity concerns. The sector continues to face high competition from international players and sectoral profitability levels are low. There is a shortage of well-trained and skilled manpower in engineering, project execution and operation fields.
Maharashtra is seeing an acute shortage in water resources, which is having an adverse socio-economic impact. Industrial estates are facing water scarcity, leading to reduced production. For example, Taloja Industrial Township - 40 kilometres from Mumbai û is home to about 950 industries and employs over 100,000 workers. With diminished water supply and forced cuts for atleast two days a week, all industries are badly affected and have had to cut down their production schedule.
Power plants in Maharashtra are also suffering due to the shortage of water supply. The Maharashtra government is looking at using recycled sewage water to operate the same. For example, a 60 MLD recycling plant to treat the sewage from Nanded Municipal Corporation, is being planned for the Parli Power Plant in Beed District. With a total market size of about `88,000 crore, the water sector is expected to grow at about 9 per cent this year. Funding from multilateral agencies and from the government sector has been slow. Even as the water supply and demand mismatch continues to worsen, this key element of the infrastructure puzzle needs more attention from the government, if the new year has to deliver on the promises.
This article is authored by H Subramaniam, Chief Operating Officer, Earth Water Group.