GST INFLATES COST OF CITY WATER PLAN

The cost of projects relating to drinking water supply to 190 villages outside GHMC limits but within the ORR has increased by more than `100 crore, primarily due to the GST burden and the increase reservoir capacities. The HMWSSB has submitted a report to the state government requesting it to approve the revised cost estimates.

The state government has transferred villages located beyond GHMC limits and within the Outer Ring Road (ORR) to Hyderabad Metropolitan Water Supply and sewerage Board (HMWSSB), and asked it to submit plans of providing drinking water supply to these 190 villages.

Accordingly, HMWSSB engaged National Consultancy for Planning and Engineering (NCPE) to draw up a Detail Project Report (DPR) for providing water supply to the villages. The NCPE consultants prepared the DPR proposals keeping in mind the population data furnished to it.

As was asked of it, the NCPE has made projections for reservoirs up till year 2033 and distribution network projections till 2048. The state government has sanctioned the project at a cost of `628 crore, all project components included; and wants it to be taken up under the annuity mode of contract.

The project contract was awarded to Megha Engineering and Infrastructure Company (MEIL) at a cost of `628 crore after calling in for bids to execute the work on PPP basis.

Later, the state government instructed the HMWSSB to consider the increased population and provide water supply to surrounding village also. Consequently, HMWSSB collected the latest population count from local bodies through field survey in villages and habitations. It then asked NCPE to consider the increased population and work out a revised reservoir capacity projection as per the population study for the ‘horizon year’ of 2033. The proposals of revised capacities of reservoirs have been examined by the technical committee of HMWSSB. In accordance with that the total storage capacity has been increased from 41ML to 72 ML and the number of reservoirs has reduced from 414 to 180.

The revised estimates jacked up the total project cost to Rs 738.26 crore, from `628 crore earlier. Implementation of GST at 12 per cent instead of VAT at five per cent led to an increase in cost by `47.73 crore, officials said.