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Business Economy


EPC players may grab projects worth Rs 2 lakh crore in river linking projects, says ICRA

New Delhi, Sep 23 (UNI) Business opportunities worth Rs 2 lakh crore are expected to open up for engineering, procurement, and construction entities (EPC) players over the next decade for the completion of four priority interlinking river (ILR) projects, research and rating firm ICRA said in a report on Monday.
"Around a third of these (Rs 80,000 crore) are estimated to be awarded in the next four years for companies involved in the construction of large irrigation projects," it said.
The ICRA report said that National Water Development Agency (NWDA) has identified 30 ILR projects (16 peninsular river links and 14 Himalayan River links), to be funded by the Government of India (60%) and the balance by the state governments.
"The GoI’s thrust on the water sector has increased significantly over the past few years. This is visible in the increase in budgetary allocation to the Ministry of Jal Shakti (MoJ) to over Rs 78,000 crore in FY2025 (revised budget estimates), led by robust allocation towards the Jal Jeevan Mission, resulting in a 69% CAGR over the last six years," ICRA said.
Chintan Lakhani, Vice President and Sector Head – Corporate Ratings, ICRA said that the four priority links are just the beginning of the decade-long plan of the ILR project implementation.
"While the share of these projects as a percentage of budgetary allocation to the ministry is currently minimal, at 5% i.e. Rs 3,908 crore, it is expected to increase as more projects get approval and awarding/construction gains momentum. Being 60% funded by the Central Government, the counterparty risks and funding risks for these projects are largely mitigated, though the balance 40% exposure to state government finances could be an overhang,” Lakhani further said.
The NWDA has identified four priority projects, namely the Ken Betwa, Kosi-Mechi, Parabati Kalisindh Chambal and Godavari-Cauvery links, for early implementation. ICRA estimates these priority links to be completed at a cost of Rs 2.6 lakh crore by FY2035.
The Godavari-Cauvery project is the largest of the four (at 45% of the cumulative project cost) and the Kosi-Mechi link is the smallest at 4%. The first awarded ILR project (accounting for 21% of the cost for priority links), the Ken Betwa, is already under implementation.
The report, however, noted that consensus-building among impacted states remains the biggest roadblock for river-linking projects to gain traction.
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