India Inc in action mode

India is hurtling towards a parched future if a recent prediction by the International Water Management Institute (IWMI) holds water. By 2030, India will have only half the water, it needs, thanks to global warming and population explosion.

The assessment is not new. Similar doomsday predictions have often been made by other experts and organisations. To compound India?s woes, whatever water is available currently is either not potable or there are few ways of recycling the available water resources.

That?s not surprising given the fact that currently, India has a total water demand of around 700 billion cubic metres, of which almost 85% is used for producing food. IWMI states that India?s water demand is set to double by 2030 as its population is expected to go from 1.2 billion to around 1.6-1.7 billion. This would mean that the country?s requirement would be to the tune of 1,498 billion cubic metres (bcm) by 2030, whereas total water supply will only rise to 744 bcm, or barely half the total requirement.

Small wonder then that water management is attracting corporates and big money like never before. And in view of the grim prognosis, it?s not surprising that the government is going full throttle to ensure harnessing of water for holistic and sustained economic development.

That?s evident from the fact that in Budget 2013-14, finance minister P Chidambaram has raised the allocation for the water sector in line with the overall increase in allocation for the social sector. Allocation of R15,260 crore has been made towards clean drinking water and sanitation as against revised estimates of R13,000 crore, R1,400 crore has been allocated for water purification plants while R5,387 crore has been allocated for water savings plans. The allocation for integrated water programmes has been upped from R3,050 crore to R5,387 crore next year.

Further, a high-powered committee set up by Prime Minister Manmohan Singh in 2008 has indicated that the country would require investments to the tune of R8,00,000 crore over the next 20 years to provide basic infrastructure services like water, wastewater and solid waste management. This high-powered expert committee on urban infrastructure, led by economist Isher Judge Ahluwalia has also recommended a regulatory regime for urban services at state levels to address challenges of not only pricing services correctly but also ensuring delivery of services and protection of the environment besides encouraging public private participation in the service delivery. What makes the task Herculean is the fact that in India, just about 64% of urban population is covered by individual water connections compared with 91% in China, 86% in South Africa and 80% in Brazil.

It is in this arena that players including multinationals like Va Tech Wabag and Veolia and domestic names like Ion Exchange India, Triveni Engineering Industries , L&T Water Process Technology Division, Thermax?s Waste and Water Solutions Division are dipping their feet into. Says Ashit Doshi, managing director of the R750 crore Ahmedabad-based Doshion Water and Waste Water Cycle Management Group, ?When it comes to the water business, the dynamics of the Indian market are very different from other parts of the world. Here most of the money for water projects comes from the government and given the size and scope of government projects, there?s room for all of us.?

Apart from being largely government-driven, Doshi is of the opinion that water is a ?very tough business too and extremely complicated as with over 300 water treatment technologies to choose from.? That?s largely because every end use demands a different technology mix and every contamination a different solution.

It is in this complex and highly competitive market that many players have found themselves out of depth and are slowly withdrawing into the shallows or limiting their exposure. What, however, goes in favour of niche players like Doshion are their completely integrated model with forward and backward integration. Incorporated in 1977, Doshion has positioned itself as a total water management company with operations encompassing water EPC, bulk water transmission, treatment and solutions with cutting edge technologies, high purity water, BOOT and PPP models, international operations and water performance chemicals including resins and pharma polymers.

?We also strongly believe in post-project relationship with our clients which is maintained during O&M and covers the entire gamut of spares, consumables and chemicals,? Doshi explains. ?The efficiency of our model is far better than others since it?s a one-stop shop for water solutions. That?s because our recoveries are better as our overheads are common.? In a sense, Doshion is almost like an electricity company that sets up a plant, creates distribution infrastructure and then has the billing in place too. Says Doshi, ?Our company provides various services in water and waste water management areas such as water transmission, distribution and waste water management, municipal assets management, asset management for industry and GRP pipe manufacturing.?

In a smart and calculated forward integration move, Doshi also set up a pipe manufacturing plant at Sanand as a subsidiary and today Pacific Pipes has emerged as a leading manufacturer of tech savvy GRP pipes. The Doshion group has also set up a subsidiary Fabex, a fabrication unit catering to the diverse needs of the industry for equipment like pressure vessels etc. To further consolidate its existing market share as well as pitch itself as a leader in the municipal sector which has enormous potential, Doshion has recently acquired the Nagpur-based Gondwana Engineers, from the Kirloskar Brothers? stable, which is a reputed brand in the municipal water business.

And as a feather in its cap and in a bid to acquire international standing, Doshion has a joint venture with French multinational Veolia Water Solutions & Technology, the undisputed world leader in water technologies.

Among the numerous big ticket projects executed by the Doshion group are the Turnkey water management project of IOC, the BOOT based desalination plants at Nagaur in Rajasthan and Ramanathpuram in Tamil Nadu. Currently, finishing touches are being put to the group?s most ambitious project?a 24×7 water management project for the local municipality of Shivpuri in Madhya Pradesh. The project entails not only bringing water from the Chambal river 38 kilometres through a system of pipes traversing treacherous terrain and two dense forests into the locality but also distribution, metering, billing and collection from customers.

Doshi says, ?Our aim is to supply potable drinking water round the clock for as little as R90-120 per month while for 20% of the population living below the poverty line in the region, water would be supplied free of cost.? Somewhat similar though less comprehensive projects are being executed by other players in the water arena too. For instance, both Maharashtra and Karnataka are seeing activity in the area of water management. Hubli, Dharwad and Gulbarga in Karnataka have water projects being run by Jusco, a Tata group company which is planning a water project for the entire Mysore city too.

But Doshion?s Shivpuri project, set for commissioning in July this year, would be the most comprehensive project of its kind and could well be a new watershed development for the water sector in the country. That?s imperative at a time when India?s urban population is projected to increase from existing 350 million to 600 million by 2031. This population increase is expected to further put pressure in the country?s dwindling water resources and the per capita water availability is expected to come down further from about 1730 cubic metre now to about 1240 by 2030.