Hyderabad: Infrastructure Leasing and Financial Services Ltd (IL&FS) has ventured into its second private sector water supply project. IL&FS has tied up with Andhra Pradesh Industrial Infrastructure Corporation (APIIC), a state government-owned infrastructure provider, to implement the project.

The IL&FS-APIIC project, called Visakhapatnam Industrial Water Supply Project, aimed at providing reliable water supply to the industries in this region, is now in the first stage of implementation process. The project will initially benefit major proposed projects in this region, such as the special economic zone, the pharma city project and the greenfield Gangavaram port project, say IL&FS sources. This project will be the states first industrial water supply project being taken up the state government through private participation.

APIIC had recently called for expression of interest bids for equity participation in the project. The Rs 400-crore project, which will be implemented in two phases, envisages the use of the existing 153-km-long Yeleru Left Bank canal, which brings water from the Yeleru reservoir in East Godavari district to Visakhapatnam. The Yeleru project is presently supplying 182 million litres water per day to Rashtriya Ispat Nigam Ltd and 16 million litres per day to National Thermal Power Corporations 1000-mw Simhadri Thermal Power Project.

The detailed feasibility and investment banking report for the project was done by Binnie Black and Veatch of the UK, while the engineering report of certain components is now being prepared by the Germany-based Lahmeyer International.

The project development activities have been funded by APIIC and India Project Development Fund, a trust fund of leading institutions managed by IL&FS. The special purpose company that has been already established, Visakhapatnam Industrial Water Supply Company, will be executing a concession agreement with the state government for design, construction, operation and maintenance of the project facilities on a build, own, operate and transfer basis.

The IL&FS officials say the construction work on the Tirupur water project in Tamil Nadu will start soon. The Rs 1,100-crore project, which comprises both water supply and underground drainage components, is expected to give a boost to the water-intensive textile dyeing and processing units in Tirupur.