The 24x7 water supply project in the city will now cost an additional 151 crore. The ambitious project, which in 2019 was pegged to cost 440 crore, will now cost 591 crore.

A major chunk of the additional cost, 98 crore, will be financed through a European Union grant which was approved in December last year. But, the rest will have to be borne by the municipal corporation, in the form of additional loan repayments and direct costs, which ultimately, are likely to be passed on to residents as water tariff.

As per the estimates approved by the MC general House in 2019, the French firm Agence Française de Development (AFD) was to give a loan of 380 crore for the project. This has been increased to 413 crore now. The original commitment of 60 crore by the Chandigarh Smart City Limited (CSCL) stands. But, the MC will now have to bear an additional 22 crore in direct costs.

“We have additional components to the project, because of which the cost estimates have been revised. It includes upgrading the Kajauli water works, replacement of a total of 2-km length pipelines in different areas (in chunks) and upgrading the Sector-39 water works. In total, around 54 crore has been added to the total project costs,” said CSCL chief general manager NP Sharma.

Notably, the AFD loan is to be repaid in 15 years with six years moratorium period. For loan repayment, as per the MC House resolution, the water tariff will have to be increased.

With the loan amount increasing now, and MC to pay additional costs, there is a concern that city residents will have to shell out much higher water tariff than earlier envisaged.

Residents anticipate hiked water tariff

Vinod Vashisht, convener of the City Forum of Resident Welfare Organisations, said, “This will only increase the financial burden on residents. They should have first implemented the pilot project in Manimajra before starting the pan-city project. The loan will have to be ultimately be repaid by the city’s residents.”

Allaying such tariff hike apprehensions, Sharma, said, “There will be no water tariff hike because of the additional costs. The hike will be as per the resolution passed by the MC House.”

Source: 26 April, 2021, Hindustan Times