Interlinking River Projects Set to Create ₹2 Lakh Crore Business Opportunities for EPC Firms

Interlinking river (ILR) projects in India are projected to unlock up to ₹2 lakh crore in business opportunities for engineering, procurement, and construction (EPC) companies over the next four years, according to a recent report by ICRA. The anticipated completion of four key ILR projects is expected to bring significant economic benefits, with ₹80,000 crore earmarked for large-scale irrigation developments.

ICRA notes that these four priority river links mark the beginning of a decade-long implementation of ILR projects, which currently receive 5% of the Ministry of Jal Shakti's budgetary allocation, totaling ₹3,908 crore. This figure is expected to rise as more projects gain approval and construction progresses.

Chintan Lakhani, Vice President and Sector Head – Corporate Ratings at ICRA, emphasized the financial structure of these initiatives: "These projects are 60% funded by the Central Government, significantly mitigating counterparty and funding risks. However, the remaining 40% exposure to state government finances could pose challenges."

The National Water Development Agency (NWDA) has identified a total of 30 ILR projects, which include 16 peninsular river links and 14 Himalayan river links. The bulk of the funding will be provided by the central government, with state governments contributing the remaining share.

The top four priority projects earmarked for early implementation include the Godavari-Cauvery, Kosi-Mechi, Parbati-Kalisindh-Chambal, and Ken-Betwa links. The estimated cost for completing these priority projects by FY35 is approximately ₹2.6 lakh crore.

Among these, the Godavari-Cauvery project stands out as the largest, accounting for 45% of the total expenditure, while the Kosi-Mechi link is the smallest, representing only 4% of the budget. The Ken-Betwa project, which is the first ILR initiative to be awarded, comprises 21% of the expenditure and is currently underway.

The Government of India's role in the water sector has seen considerable expansion in recent years, with the budgeted allocation for the Ministry of Jal Shakti increasing to around ₹78,000 crore for FY25. This reflects a strong commitment to the Jal Jeevan Mission, which has achieved a remarkable 69% compound annual growth rate over the past six years, as reported by ICRA.

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