Investor interest in India’s water sector, which has traditionally been way down in the pecking order of sectors drawing foreign investments, is seeing a sharp uptick, thanks largely to the NDA government’s two flagship schemes – the Swachh Bharat campaign and the Clean Ganga initiative. The French seem to be leading the charge, with two of the world’s biggest water utilities – the euro 29.4 billion Veolia Environnement SA and the euro 14.3 billion Suez Environnement Co – stepping up their India play.
“The Ganga Action Plan appears to be a promising campaign in terms of business opportunities. Suez Environnement will actively look at how it can participate in such government initiatives as part of our overall aspiration to provide smart utilities in waste, water distribution and waste water treatment … We look forward to not only setting up treatment plants, but long-term, sustainable Ganga clean up with professional operation and maintenance services,” Shyam J. Bhan, managing director of Gurgaon-based SEI (Suez Environnement’s India arms), told The Indian Express.
Veolia, which has made an entry into India’s urban water and sanitation sector, is evaluating fresh opportunities from the Swachh Bharat campaign and the Centre’s smart cities push. Fresh in the wake of a contract to design, build and operate a green sewage treatment plant in Delhi, Veolia is reported to be working on consolidating its urban projects in India, which include a joint venture company, Orange City Water, in Nagpur and five pilot projects and two demonstration contracts in the towns of Hubli-Dharwad, Belgaum, Gulbarga, Bijapur and a part of Bangalore in Karnataka. The company also operates water and wastewater treatment plants in Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN), Maharashtra.
Suez’s Bhan said that French firm is “closely studying all opportunities relevant to SEI’s expertise in water and waste in the country” and the opportunities that it’s eyeing include “large sewage recycling projects proposed for Chennai; potential solid waste projects across India… several unaccounted for water (UFW) and distribution improvement projects proposed across India, specifically in Karnataka, which are of interest to us”. While citing the need for faster decision-making and administrative processes in India for pushing through these projects, Bhan cited the approval accorded by the government to local bodies to issue municipal bonds as a “positive step” in the long run that will “create an eco-system of fiscal discipline and faster implementation of projects to accrue benefits and quicker revenue to meet debt servicing”.
In 2014, as against Suez’s international division revenue growth of 2.7 per cent at Euro 3,422 million, the company’s Africa, Middle East and India zone saw a 10.3 per cent growth in revenues last year, thanks largely due to “the good level of water and waste activity in Morocco and continued development in India”. In absolute terms, though, Suez’s India revenues clocked in at a modest Euro 100 million, something that is likely to grow in excess of 10 per cent, according to the company’s estimates.
Apart from the French, the Australians have also stepped in with interest on the Ganga water cleaning initiative, specifically with the intention of replicating its experience with the Murray-Darling Basin Plan. The Murray-Darling Basin Plan entailed cutting existing water allocations and increasing environmental flows to the basin, something that’s has a resonance in the Indian context. The Germans too have evinced interest in the clean Ganga initiative.