Why Is Ahmedabad's Civic Body Selling Treated Water to Textile Industry at Loss of Rs 10 Per Kilolitre?

Ahmedabad: During today's standing committee meeting of the Ahmedabad Municipal Corporation (AMC), it was announced that AMC will construct a tertiary treatment plant at Pirana with a capacity of 160 million litres per day. The corporation plans to purchase tertiary treated water from contractors at a rate of Rs 40 per kilolitre and sell it to industries at Rs 30 per kilolitre, incurring a loss of Rs 10 per kl.

In line with this decision, AMC has notified textile units to cease groundwater usage by 2026. The water will be supplied to textile units at Rs 30 per kl, with a provision for a 10 percent adjustment in charges.

This decision comes under the controversial proposal for a Rs 829 crore sewage treatment plant and tertiary treatment plant based on the hybrid annuity model (HAM) of financing. The proposal will be put forward during the standing committee meeting of the AMC today, a TOI report said.

In Jan 2024, the city civic body had decided to provide tertiary treated water to textile industry associations in the eastern part of the city for Rs 30 per kl. And now, AMC proposes to buy this for Rs 40 per kl. As per the proposal, AMC will have to buy at least 152 MLD of tertiary treated water, accounting for 95% of the plant’s output.

The TOI report added that the AMC must supply 160MLD of sewage water to the plant. If the civic body fails to provide the sewage water, it will have to pay the contractor for operations and maintenance for 15 years.

Following the meetings in 2023 between AMC, Gujarat Pollution Control Board (GPCB) and representatives of the industrial associations, the rates for tertiary treated water were finalized in Jan 2024.

The civic body approved projects worth Rs 951 crore, including a new 240 MLD sewage treatment plant costing Rs 335 crore, a new 160 MLD tertiary treatment plant costing Rs 509 crore and a treated sewage storage tank costing RS 107 crore. All these to be developed on a public-private partnership basis.

AMC officials said that the proposed model will lead to burden of crores to the benefit of the contractor. The civic body decided to supply treated water to industrial units at subsidized rates.