L&T sees growth in desalination projects

L&T’s water and effluent treatment business is eyeing a slew of desalination and water treatment projects worth $1 billion in the country.

The business, which is undertaken by L&T Construction in partnership with UAE-based Tecton Engineering and Construction, is seeing significant demand mostly from coastal regions. “Coastal regions in India from the South, the East and the North-West are looking at desalination plants as an option to reduce the stress on municipal corporations,” S Rajavel, Head of the Water and Effluent Treatment business, L&T, told BusinessLine . He, however, did not specify the time-frame of these expected projects.

L&T is particularly upbeat about this business as it has been seeing some momentum recently. In the past couple of months, the firm has bagged two such orders. It bagged a contract for a desalination plant from the Gujarat Industrial Development Corporation (GIDC). While it did not disclose the value of the contract, it said the order falls under the “significant” category which ranges between ₹1,000 crore and ₹2,500 crore as per the firm’s classification of contracts.

Similarly, in June, L&T Construction bagged an EPC (engineering procurement construction) order from the Delhi Jal Board for the design, construction, installation, automation, testing, commissioning and O&M (operation and maintenance) of a 477 MLD (million litres per day) water treatment plant (WTP), a 105 ML clear-water reservoir, and a pump house for the Chandrawal command area. The project is part of the Delhi Water Supply Improvement Project and is funded by the Japan International Cooperation Agency.

Rajavel believes that many factors are contributing to this upsurge in water-treatment initiatives, which is a $2-billion business for the company at present. “Rising shortage of ground water, rapid urbanisation and expansion of industrial activities have all put a strain on municipal corporations’ ability to meet the water demand,” he said.

With conventional surface-water sources drying up or disappearing over time and borewells getting deeper by the year, sourcing and supplying water have become uphill tasks for corporations and panchayats, he added. Also, L&T considers water resource management projects as one of its key growth areas, something which Chairman AM Naik outlined in the company’s recent annual report.

Some State governments such as Tamil Nadu, Odisha and Gujarat have opted for setting up desalination plants to address water shortage. “From our interactions, States are exploring desalination plants on western coasts,” said Rajavel. Odisha has signed an MoU with Paradip Port Trust (PPT) and the National Institute of Ocean Technology for its first desalination plant with a capacity of 10 MLD.

According to the International Desalination Association (IDA), there are around 18,426 desalination plants spread across 150 countries, touching around 300 million people.

States are also looking at L&T as it has done similar projects abroad, particularly in West Asian countries such as the UAE, Oman and Qatar. As an example, Rajavel points to the completion of a Sewage Treatment Plant (STP) in the UAE along with its JV partner BESIX. The 375,000-cubic meters per day STP in Jebel Ali (Phase 2) claims to be the biggest in the UAE.

However, some industry watchers have questioned the economic viability of desalination plants, terming it as expensive and not environmentally sustainable, as they are energy intensive.

COMMENT NOW