General Electric Infrastructure India and Hyderabad-based IVRCL Infrastructures & Projects Ltd are part of a consortium which is in the race for setting up a Rs800 crore water desalination project in Gujarat’s Kutch region. “We have put a prequalification bid for a 150 million litres per day (mld) desalination water plant in Kutch, which was invited by the Gujarat infrastructure development board,” said S. Ramachandran, deputy director of development and corporate strategy, IVRCL.
The other members of the consortium include Toyo Engineering Corp. of Japan and Cethar Vessels of Tamil Nadu.
“While GE and IVRCL will take care of the water desalination part of the project, Toyo will take care of the engineering, procurement and construction (EPC) component. Cethar Vessels will be responsible for setting up the 40MW power plant, which is part of the project,” Ramachandran said. The desalination project will be awarded through competitive bidding. It will be developed on a concession basis and the successful bidder will sell the product water to the Gujarat government. “There will be a water purchase agreement with the Gujarat government,” Ramachandran added.
GE will supply the water desalination plant equipment. In response to queries, a spokesperson for GE Infrastructure India said that the company could not comment on the issue “at this point.” The company has a presence in India in several infrastructure sectors such as aviation, power, oil and gas, rail, and water and process technologies.The project will be set up as a special purpose vehicle (SPV). “Substantial part of the equity in the SPV will be shared by GE and IVRCL and a nominal portion by Cethar Vessels. The project cost is estimated at about Rs800 crore,” Ramachandran said. The consortium is competing with around 8-10 Indian and overseas companies who have put in their prequalification applications for the project.
Kuljit Singh, partner at accounting firm Ernst & Young, said: “From the companies’ perspective, it is a great project. Although it is a high-cost project, it makes sense for the water-starved region. However, desalination projects are an expensive source of water and should be considered only when the other avenues are exhausted as Indian water utilities are already hard-pressed due to high amount of losses ”.
IVRCL’s revenue for 2006-07 was Rs2,518 crore and it made a net profit of Rs168.9 crore on this. “Water continues to remain between 45% and 50% of our business, power and highways are in the second rung, 15% and 20% each, and the balance is construction,” said Ramachandran.
Courtesy: Livemint - Delhi,Delhi,India