The apprehensions of the banks in the backdrop of Vijay Mallya, Nirav Modi and Mehul Choksi episodes have cast its shadow on a major component of Mission Bhagiratha, to take clean water to all households.
The pending work is completing internal pipeline network in 38 municipalities of the State after the boundaries of the towns were linked to the water grid. The State government cancelled the contract at the last Cabinet meeting as the agency failed to raise funds from banks after instances of they getting defrauded came to light one after another. The government has appointed a high-level committee to study to what extent the agency could be compensated in these circumstances as not a rupee was paid to it so far.
The firm was awarded the contract in September 2017 on annuity basis which was experimented by the government for the first time. The works were given in three packages for ₹ 1,061 crore on the condition that the firm will invest 30% as equity and raise funds for the balance 70% from banks and financial institutions. The payment was to be made by government over seven years but not a rupee was paid because there was no such provision in the contract if the works remained incomplete, sources said.
Government guarantee
Having invested its 30% equity, the firm failed to raise loan from banks despite best efforts of the government to stand guarantee. On the other hand, another big company fully executed the works on annuity basis but their work was only worth ₹ 160 crore.
When contacted, Engineer-in-Chief of Public Health Dhan Singh told The Hindu that the committee will go into what could be done.
Having cancelled the contract, the government has decided to invite fresh tenders for the balance of work. It has allotted ₹ 800 crore for the purpose in the budget presented to the Assembly on Sunday.
Most work complete
Apart from rural areas of the State, the government is implementing Mission Bhagiratha in 141 municipalities and municipal corporations, excluding Greater Hyderabad Municipal Corporation. Barring 38 municipalities where the work was held up on account of this problem, the works were completed everywhere else. A small portion of work was also pending in Khammam town, sources added.
The project contractors were supposed to take care of the maintenance of the entire water network for 10 years at no additional cost to government. The project envisaged supply of 150 litres of drinking water per person per month in urban areas while the same was 100 litres in rural areas.
