Coimbatore Corporation proposes revised estimate for 24x7 water supply project
Coimbatore Corporation has proposed a revised administrative sanction of ₹829.27 crore for the ongoing 24x7 drinking water supply project, which is being implemented by Suez India Pvt. Ltd. in the 60 wards that were part of the city prior to its 2011 expansion.
Approximately 80% of the work has been completed. The project was initially sanctioned at ₹646.71 crore under the Centre's AMRUT scheme in 2015.
According to the Corporation data, the contract includes construction, operation, and maintenance for 25 years, with an Engineering, Procurement and Construction (EPC) cost of ₹646.71 crore and an Operation and Maintenance (O&M) cost of ₹2,328.45 crore.
Following the introduction of the Goods and Services Tax (GST) in July 2017, a 12% GST was applied to the project, adding ₹77.61 crore to the cost and increasing the EPC component to ₹724.32 crore. This revised estimate was approved by the council in July 2021 and submitted to the Directorate of Municipal Administration.
In July 2022, the GST rate on construction services was increased to 18%, resulting in further cost escalation. The cumulative GST liability now stands at ₹109.94 crore.
The Corporation also encountered delays in obtaining permissions from the National Highways Authority of India (NHAI) for pipeline-laying works. As a temporary arrangement, with the consent of the NHAI divisional engineer, trenching was allowed on the condition that road restoration would be carried out to national highway standards. The estimated cost of restoring these stretches is ₹35.50 crore.
Additional restoration and permission-related payments include ₹1.81 crore to the Railways and ₹35.31 crore to the State Highways Department. Together with the NHAI-related works, the total expenditure for inter-agency coordination stands at ₹72.62 crore.
In the light of these additional expenses, the Corporation is seeking a further grant of ₹182.56 crore over the original sanctioned amount, bringing the total revised administrative sanction request to ₹829.27 crore.
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