The state of Gujarat is taking the lead in water infrastructure investment and specifically on sea water desalination. Gujarat has the largest coastline of 1600 kms, making it prone to highly saline water. 70% of the states’s fresh water sources are concentrated in 30% of its geographical area. Overexploitation of ground water, irregular monsoons and high water contamination has made Gujarat a prime candidate for sea water desalination projects. Salinity has affected 1200 to 1500 villages and 12.9 lac hectares of land in 50 coastal talukas in Gujarat. The state has emerged as a front-runner in adopting desalination technology for water sourcing, and accounts for over 40% of the desalination plants in India. The state is working on increasing installed capacity to 300 MLD soon and to reach 1500 MLD by the year 2030.

Last week, the Gujarat Minister for Water Supply Kunwarji Bavaliya announced that the state will set up a 100 MLD desalination plant at Jodiya in Jamnagar district. Set up under public-private-partnership (PPP) over 25 years concession, the project will be set up by a SPV called Jodiya Water Desalination Ltd., which is a joint venture between India’s Essel Infra and Spain’s Abeinsa Infraestructuras Medio Ambiente. With a total initial investment of over INR 7,500 million (USD 107 million) and INR 1,000 million (USD 14.3 million) annually for recurring costs – the project will be closely watched by infrastructure investors and contractors. Having provided the land for setting up the plant, the government will purchase water at INR 70 rupees (USD 1) per cubic metre for 2 years, with a 3 percent escalation annually after that. The plant construction is expected to take 30 months. Even as the debt-laden Essel Infra struggles to meet its commitments in a fragile economic environment, Chairman Subhash Chandra has promised that he is “not running away”

7 more desalination plants with a combined capacity of 270 MLD are being planned in Mundra (50 MLD), Mandvi (50 MLD), Dwarka, Porbandar, Sutrapada (30 MLD), Rajula and Ghogha. Tenders for the same have come out under Hybrid Annuity Model (HAM).

Last week, L&T Construction also secured a contract for a 100 MLD desalination plant from Gujarat Industrial Development Corporation (GIDC), as a part of a joint venture with Tecton Engineering of UAE. An EPC order, the project will provide desalinated water to Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) in Dahej district. Perhaps the largest SWRO desalination plant awarded till date in India for industrial applications, the contract involves operation and maintenance for 10 years post-completion.

Gujarat accounts for 13% of the net value of manufacturing in India, and is one of the most industrialized states. Water demand is expected to increase from the current 35 billion cubic metres (bcm) to 57 bcm by 2050, due to increased industrialization and urbanization. At the same time, annual per capita availability of water is projected to reduce from the current 0.7 bcm to 0.6 bcm by 2025. 85% of the available water has high contamination levels. All these macro trends are creating a fundamental market for desalination and other advanced water technologies in Gujarat. Becoming the first state in India last year to come out with a formal policy for Reuse of Treated Wastewater, Gujarat can stake its claim to be the WATER AND DESALINATION CAPITAL of India