Three years after the inking of a mega alliance between the Gujarat government and a clutch of Singaporean and Japanese companies, including Hyflux, Itochu and Hitachi, to develop Asia’s largest seawater desalination plant in the Dahej SEZ, the $600-million (Rs 4,000-crore), 336 million-litre-per-day project seems on the verge of being given a quiet burial.
Touted as the lifeline for the industries of the Dahej SEZ region — which are so far relying solely on the rapidly depleting potable water from the Narmada river for their needs — the desalination project that was expected to achieve financial closure by 2014-end and start operations by 2017, has made virtually no progress so far.
When contacted, Dahej SEZ CEO S N Patil told FE, “I am not sure whether the Dahej desalination plant will take off or not. From our side, we have allotted them the land, but from their side there is no response. The construction has not started yet and also, they have not given us any inputs regarding when they will begin work or whether the project will kick off or not. So, as of now, I cannot say if the plant will come.”
Also speaking to FE, president of Dahej Industries Association M A Hania, when asked about the status of the project, said that following the announcement in 2013, made by then CM and now PM Narendra Modi amidst much fanfare, “No headway of any sort has been made on the ground towards development of the project.”
Prior to the big-ticket announcement, the Gujarat government had informed the state assembly in 2013 that “a major consortium will be signing up an agreement with the state government on March 22 to set up the biggest desalination plant of Asia. To be set up in the Dahej special economic zone, it will also provide water to the whole of the industrial area of the region”.
The initiative to put up a world-scale water desalination at Dahej had come after the state government found that it would not be possible to provide enough water to industry from the Narmada river. Following the inking of an MoU between the Gujarat government and the Hyflux-led consortium, the Singaporean company had publicly expressed intent to achieve financial closure by 2013.
Blaming the tardy progress of the Dahej project on a drop in its net profits — from Sing$61 million ($ 48.2 million) at the end of 2012 to Sing$44 million ($ 34.8 million) on 31 December 2013 — Hyflux, in its full-year report released on 20 February 2014, had pushed the deadline further, stating, “The group expects a slower first half in FY14 due to the timing of projects. The group aims to achieve the financial close for its Dahej project in India in the first half of FY14, which will signal the start of engineering, procurement and construction works on the desalination plant.”
The group, in a consortium with Hitachi, was to build the 336,000 m³/d Dahej desalination plant.