Giant Indian desalination scheme set to be ditched

A proposed US$ 600-million, 336 Ml/d seawater desalination project in Gurarat state, India, that was to be Asia’s largest, is reportedly set to be axed.

The Gujarat government and a consortium of Singaporean and Japanese companies, including Hyflux, Itochu and Hitachi, signed an agreement for the contraction of the plant in the Dahej special economic zone (SEZ). The desalination project that was expected to achieve financial closure by 2014-end and start operations by 2017, has made virtually no progress.

The plant was held up as the lifeline for the industries of the region — which is relying solely on a rapidly depleting supply from the Narmada river.

Dahej SEZ chief executive officer S N Patil told local financial newspaper Financial Express, “I am not sure whether the Dahej desalination plant will take off or not. From our side, we have allotted them the land, but from their side there is no response. The construction has not started yet and also, they have not given us any inputs regarding when they will begin work or whether the project will kick off or not. So, as of now, I cannot say if the plant will come.”

The proposal to build a giant water desalination plant at Dahej followed the state government’s discovery that it would not be possible to provide enough water to industry from the Narmada river. After Gujarat government signed a memorandum of understanding with the Hyflux-led consortium, the Singaporean company had publicly expressed intent to achieve financial closure by 2013.

Hyflux said the delay in the Dahej project was a result of an 28% fall the company’s to US$ 34.8 million for the year to 31 December 2013. In its full-year report Hyflux said “The group aims to achieve the financial close for its Dahej project in India in the first half of FY14, which will signal the start of engineering, procurement and construction works on the desalination plant.”