Chandigarh's 1,263-km Sewerage Network to Get Rs 1,000 Crore Overhaul

The Ministry of Housing and Urban Affairs (MoHUA) has granted in-principle approval for a comprehensive overhaul of Chandigarh's 1,263-kilometer sewerage network, much of which is five to six decades old. The Chandigarh Municipal Corporation (MC) has estimated the project cost at approximately Rs 1,000 crore.

Project Funding and Model

The project will be implemented under MoHUA's Urban Challenge Fund (UCF). A delegation of the MC, led by Commissioner Amit Kumar, presented the project before Union Housing and Urban Affairs Minister Manohar Lal Khattar on Saturday. A key focus of the discussions was to develop the project as a financially sustainable, revenue-oriented model, ensuring that earnings generated are used for long-term operation and maintenance (O&M) instead of recurring expenditure from the government exchequer. The UCF's financial structure was examined in detail with this objective.

Under the UCF framework, MoHUA will provide a grant of 25% of the total project cost, while the corporation will contribute another 25%. The remaining 50% will be arranged through a market-linked model, which could involve a public-private partnership (PPP) or a hybrid annuity model (HAM). Under this arrangement, the selected agency would execute the project and handle O&M for a long duration—typically 10 to 15 years or more—recovering its costs through revenue generated from the project.

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Current Revenue and Expenditure

According to records, the corporation currently earns around Rs 40 crore annually through sewer cess, while the public health wing of the engineering department spends approximately Rs 20–25 crore each year on maintenance. These aspects will be factored in while preparing the detailed project report (DPR).

Next Steps

With MoHUA's in-principle nod, the MC will now engage experts to prepare the DPR, with a special focus on devising a sustainable revenue model. The objective is to ensure that government entities do not end up spending beyond their stipulated 50% share, while O&M is fully managed by the private agency.

Confirming the development, MC Commissioner Amit Kumar said, "We will receive a 25% grant from MoHUA under the Urban Challenge Fund, 25% will be contributed by MC, and the remaining amount will be raised through the market. Expert agencies will now be hired to prepare the DPR."

Project Phasing

The MC has proposed executing the sewerage revamp in phases. In the first phase, trunk (main) sewer lines spanning about 125-150 km will be rehabilitated. The second phase will cover over 1,100 km of smaller sewer lines, most of which pass through inner areas of the city. Most trunk sewers are brick-lined, egg-shaped structures laid during the initial development of Chandigarh nearly five to six decades ago.

Pilot Project Underway

The MC is currently implementing a pilot project to repair around a 1-km stretch of brick sewer line leading to Diggian in Mohali. In January, the State Level Technical Committee (SLTC) of the Chandigarh administration approved the pilot and sanctioned Rs 13.5 crore under AMRUT funds through the tender process.