24X7 water supply through PPP mode.

The Coimbatore Corporation will implement the 24X7 drinking water supply through the public-private partnership mode.

The financial feasibility report submitted for the project had recommended that the civic body bring down its contribution in the Rs. 450 crore project to 10 per cent from 30 per cent. The corporation has approved the change in its share.

The reduction in corporation’s contribution would come from concessionaire through the public private partnership.

The civic body sources said that the Tamil Nadu Infrastructure Development Board had recommended the change based on the financial feasibility report, prepared by a transaction adviser.

The reason proffered: the increase in cost of materials and labour during project implementation period was often met with resources from the Corporation General Fund, which created a stress on its regular functioning.

To overcome the same, the State Government planned to rope in a concessionaire, who would meet any escalation in cost. And, the board would join in as 13.20 per cent had been earmarked as non allocated expenses.

The revised funding pattern and introduction of new players had resulted in the cost of the 24X7 drinking water supply project going up from Rs. 451.66 crore to Rs. 556.57 crore.

The sources said that the civic body would repay the concessionaire with support from the State Government at regular intervals based on the progress in completion of the project, and thereafter based on the details that were yet to be worked out.

At present the civic body has not identified any concessionaire. It was too early to talk of the revised arrangement impacting user charges, according to the sources.

The Hindu