AMC’s Decision To Sell Treated Water To Textile Industry At A Loss Sparks Controversy

In a recent standing committee meeting, the Ahmedabad Municipal Corporation (AMC) announced its plan to construct a tertiary treatment plant at Pirana with a capacity of 160 million litres per day. The AMC has decided to purchase tertiary treated water from contractors at Rs 40 per kilolitre and sell it to industries at Rs 30 per kilolitre, resulting in a loss of Rs 10 per kilolitre.

As part of this initiative, AMC has issued a directive to textile units to cease groundwater usage by 2026. The treated water will be provided to these units at Rs 30 per kilolitre, with a provision for a 10 percent adjustment in charges.

This decision is part of a larger, contentious proposal for a Rs 829 crore sewage treatment plant and tertiary treatment plant, funded through the hybrid annuity model (HAM) of financing. The proposal is set to be discussed further in the standing committee meeting of the AMC today, according to a report by Times of India (TOI).

In January 2024, AMC had decided to provide tertiary treated water to textile industry associations in the eastern part of the city for Rs 30 per kilolitre. Now, the corporation proposes to buy this treated water at Rs 40 per kilolitre. As per the proposal, AMC will be obligated to purchase at least 152 MLD of tertiary treated water, which accounts for 95% of the plant’s output.

The TOI report also mentioned that the AMC is required to supply 160 MLD of sewage water to the plant. Failure to provide the required sewage water will result in the civic body having to compensate the contractor for operations and maintenance for a period of 15 years.

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

The civic body has approved projects worth Rs 951 crore, which include 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 projects will be developed on a public-private partnership basis.

AMC officials have expressed concerns that the proposed model will impose a financial burden on the civic body while benefiting the contractor. Despite these concerns, the AMC has decided to supply treated water to industrial units at subsidized rates.

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