EPCs may gain Rs 2 trn in river-linking projects over next decade: ICRA | News
Engineering, procurement, and construction (EPC) companies are projected to have business opportunities worth Rs 2 trillion through the completion of four priority interlinking river (ILR) projects over the next decade, as per rating agency ICRA. Out of Rs 2 trillion, projects worth Rs 80,000 crore are estimated to be awarded in the next four years for companies involved in the construction of large irrigation projects.
The National Water Development Agency (NWDA) has identified four priority projects, namely the Ken-Betwa, Kosi-Mechi, Parbati-Kalisindh-Chambal, and Godavari-Cauvery links, for early implementation. These priority links are estimated to be completed at a cost of Rs 2.6 trillion by financial year (FY) 2035, as per ICRA.
The Godavari-Cauvery project is the largest of the four, with 45 per cent of the cumulative project cost, and the Kosi-Mechi link is the smallest, with four per cent. The first awarded ILR project, Ken-Betwa, is already under implementation, accounting for 21 per cent of the cost for priority links.
Chintan Lakhani, vice president and sector head—corporate ratings, ICRA, said, “Being 60 per cent funded by the central government, the counterparty risks and funding risks for these projects are largely mitigated, though the balance 40 per cent exposure to state government finances could be an overhang.”
Lakhani further stated that though the Parbati-Kalisindh-Chambal and the Godavari-Cauvery links are in advanced stages of finalisation of the detailed project reports, consensus building among states remains critical for timely implementation of these projects. ICRA is anticipating the two projects to start in FY28 and FY29, respectively.
However, with the announcement of the financial support of Rs 11,500 crore towards various flood control and irrigation projects for Bihar in the FY25 Union Budget, the Kosi-Mechi project is estimated to start contributing to the order book in the next 12–15 months, as per ICRA.
Additionally, NWDA has identified a total of 30 ILR projects, with 16 of them being peninsular river links and 14 being Himalayan river links.
First Published: Sep 23 2024 | 6:18 PM IST
