Water Alliance India, Ion Exchange Limited, Swach Environment Private Limited, Nangloi Water Services Private Limited, industry associations and other companies dealing with water management services appealed to the Centre on Thursday to allow the inclusion of water and wastewater sectors in the Emergency Credit Guarantee Limit Scheme (ECLGS 2.0).
This is being done to seek financial support from lending institutions at a time when the water sector of the country is under severe economic stress. Due to the COVID-19 pandemic, various drinking water and sanitation projects have suffered immensely on account of restrictions imposed on activities, lack of manpower, credit crunch and shortage of raw material.
Water Alliance India has stated that failure to define the water and waste-water projects under ECLGS will spell doom for the viability of projects under financial stress. Water Alliance India is an organised group comprised of members involved across diverse fields of the water sector.
Commenting on the issue, Sourav Daspatnaik, Managing Trustee, Water Alliance India said: "It is a matter of great concern that Water, Waste Water and Sanitation sectors which have been at the forefront of the Covid-19 crisis are not considered in the eligible sectors. Just like power and electricity, Water, Waste Water management and Sanitation must be considered as an essential service and cannot be subservient to other sectors. The life line of water infrastructure development in India will tumble if such reliefs under the Government policies are not made available to Water, Waste water and Sanitation sector."
The Centre had announced ECLGS as a response to the COVID-19 pandemic. Under the scheme, the Centre guaranteed additional facilities provided by lending institutions to their existing borrowers. It later revised the scheme to include 27 sectors including the 26 sectors defined by the committee headed by KV Kamath and the health sector.
However, the water infrastructure players have not been able to avail this scheme as the water industry was not listed in the 26 sectors defined by the committee led by KV Kamath.
Discussing the issue, Ajay Popat, President, Ion Exchange said, "It is unfortunate that drinking water and waste water management sectors have not been considered to avail the benefits of ECLGS and as a result multiple projects and MSMEs involved in the sector have been affected financially, apart from being crippled with lack of manpower, severe hike in raw materials like steel, cement, electrical etc. Since most of these contracts have fixed prices, the cascading effect of all have resulted in acute credit crunch and financial distress".
While Ajay Pradhan, President, Consulting Engineering Association of India (CEAI), added that there has been a growing demand from the sector players to issue a proper clarification urgently in defining the projects as a separate sector or as sub-sectors under the infrastructure or construction sector in order to combat the financial distress. "As the apex body for consulting and technical engineers in the country, we remain hopeful and confident that a clarification would be issued soon bringing this into effect thus, enabling the lending institutions to process additional funding for the run-down water infrastructure players," Pradhan further explained
Naresh Jain, President, Delhi Jal Board Contractors Welfare Association explained that in the absence of the ECLGS being extended to the water sector, many firms may be compelled to shut their operations leaving many jobless. He added, the sector must be added to the list of sectors identified by the committee led by KC Kamath.
Commenting on the issue, Shantanu Mitra, CFO, Nangloi Water Services Private Limited said, "Since the construction sector has already been identified in the list of 26 sectors by the KV Kamath Committee, thus, it is imperative that the drinking water and waste water sectors should be considered as a part of the construction sector and subsequently be included in the list."
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