AIIB sends $105 mn for 24x7 drinking water supply project in Ludhiana, Amritsar

Nitin Jain

Tribune News Service

Ludhiana, July 8

Another financial support of $105 million has arrived for the much-awaited 24x7 canal-based surface drinking water supply project in Ludhiana and Amritsar, the government has confirmed.

The Asian Infrastructure Investment Bank (AIIB) has approved the financial aid after an equal amount of $105 million was sanctioned by the World Bank (WB) recently.

Both the international banks have approved their 35 per cent share each for the Punjab Municipal Services Improvement Project (PMSIP) to strengthen urban services in Ludhiana and Amritsar, the two largest cities in Punjab, while the state government will bear the rest $90 million, which accounted for 30 per cent, a senior government functionary told The Tribune on Thursday.

The PMSIP is expected to cost US $300 million, of which the WB and AIIB share is 70 per cent, under which they have approved $210-million, while Punjab’s share is 30 per cent, amounting to $90-million.

The project has been approved by the Union Ministry of Finance’s Department of Economic Affairs and posed to the WB and the AIIB for external financing.

The Punjab Municipal Infrastructure Development Corporation (PMIDC) under the Local Government Department has initiated the PMSIP aimed at improving service delivery in Ludhiana and Amritsar by strengthening municipal governance finance and service delivery systems and capacities for this project with technical and financial support of the WB and AIIB.

A major focus of the project will be on providing efficient water supply and sanitation services in Ludhiana and Amritsar, cities that are the engines of economic growth for the state. The improvement in the water supply will benefit more than three million people in 2025 and an estimated five million projected population in 2055. Industrial and commercial users would also benefit from the good quality reliable water supply.

In Ludhiana, the project will cost Rs 1,942 crore, which will be spent for water treatment plant, transmission and storage, including Rs 700 crore for 10 years of operation and maintenance.

The land for water treatment plant and other ancillaries is under acquisition and the same is also being reviewed at the level of the World Bank for conducting social and environmental studies.

The site selection committee, headed by Deputy Commissioner Varinder Kumar Sharma, has approved 54 acres of land at Bilga village in Ludhiana.

The request for proposal (RFP) to engage contractors on design, build, operate and transfer (DBOT) basis has also been forwarded to the World Bank for approval, following which the tenders will be floated.

In Amritsar, the project will cost Rs 1,156.2 crore, including Rs 686.2 crore for water treatment plant, transmission and storage, besides Rs 470 crore for operation and maintenance services.

The land for the water treatment plant and other ancillaries has already been acquired.

The work has been awarded for execution of a bulk water supply project, which will be completed in three years.

Present status

Presently, Ludhiana and Amritsar draw their water by pumping out groundwater from hundreds of bore-wells dug up across the two cities. Pumping groundwater directly from these bore-wells leads to significant water loss and wastage as households are not incentivised to save. Studies have also revealed that Ludhiana’s groundwater is contaminated with nitrates and other heavy metals, while Amritsar district’s with arsenic.

Future plan

The project will shift water supply from rapidly depleting and highly contaminated groundwater sources, to a centralised treatment plant drawing water from local canals (surface water sources). This shift is likely to have significant health benefits, studies have shown.

Funding pattern

The project will finance all new raw water systems, water treatment plants, transmission systems, and reservoirs to supply clean water to cover entire cities under the DBOT contract. The DBOT operator will manage the operations and maintenance of these water supply systems under the direct supervision of the Municipal Corporations in the two cities through city-level water utilities.

The project will also provide sub-grants to all the Municipal Corporations in Punjab to finance critical non-medical interventions that address impacts of the Covid crisis, and to improve their readiness to tackle disasters.

Join Whatsapp Channel of The Tribune for latest updates.