The Maharashtra state government plans to implement a hybrid annuity model (HAM) for major water diversion projects aimed at alleviating drought conditions in north Maharashtra and Marathwada. Tenders are likely to be floated within the next four months, according to Water Resources Department Minister Radhakrishna Vikhe Patil, who made the announcement on Friday.
Project Scope and Revised Estimates
The proposed projects will divert water from west-flowing rivers to irrigation-deficient regions in eastern Maharashtra. Initially, the quantum of water that could be diverted was estimated at 55 TMC (thousand million cubic feet). However, a fresh survey has revised this figure to 78 TMC. The minister stated that the government is finalizing the hybrid annuity model with the involvement of private players for investment in the schemes.
Cost and Implementation Timeline
The overall cost of the water diversion projects is estimated at around Rs 90,000 crore. Vikhe Patil said, 'We have the pre-feasibility reports for the projects ready. We will make some changes and even finish with the detailed project report that will enable us to find the exact cost required for the project and the benefit of the schemes.' The government is currently in discussions with potential investors and may invite tenders within four months once the process is finalized.
Understanding the Hybrid Annuity Model
Explaining HAM, Vikhe Patil said the government will contribute 40% of the project cost during construction, while private investors will fund the remaining amount. The private investment will be recovered through fixed, periodic payments over a mutually agreed period. This model is expected to attract private capital while ensuring that the government retains control over water taxation and recovery.
Government Retains Control Over Water Taxation
Addressing concerns over water taxation, a senior WRD official clarified that private entities will be involved only in construction. 'Tax collection and water recovery will remain with the government. Investment in drought mitigation infrastructure will help the state save substantially on emergency water supply expenditure in the future,' the official said. The hybrid annuity model is seen as a strategic approach to leverage private investment while maintaining public ownership of water resources.
