VIJAYAWADA: The State government has accorded permission for formation of a special purpose vehicle (SPV) for mobilising about Rs 40,000 crore for executing 27 irrigation schemes, as part of Rayalaseema Drought Mitigation Project.
The project, which also consists of the Rayalaseema Pumping Scheme and upgradation of the Pothireddy padu canals that triggered water wars between Andhra Pradesh and Telangana, is proposed to enhance the existing canal capacities servicing the region and, to add new schemes to draw water from the Srisailam foreshore to tap the required water for the parched Rayalaseema within a period of 30 to 40 days as against the earlier 120 days.
Special Chief Secretary (Water Resources) Adityanath Das has issued an order on Friday according permission to incorporate a 100 per cent Stateowned SPV under the department, proposed to be named Andhra Pradesh Rayalaseema Drought Mitigation Projects Development Corporation Limited” or such other name as approved by the Registrar of Companies (ROC), Union Ministry of Corporate Affairs.
The SPV will be incorporated with an initial paid-up capital of Rs 5 crore to be met from the water resources department’s budget.
These Rayalaseema drought irrigation projects are not only limited to 27 projects and more can be added in future based on the requirement, which may also increase the overall capital outlay. With formation of a separate SPV, any financial difficulties/ constraints of the new projects cannot spill over into any other government project and viceversa, officials said.
The special purpose vehicle can also arrange financing through loans from financial institutions and even has the option to tap into public markets. It may be recalled that the government has been working on formation of SPVs for major irrigation projects such as Rayalaseema Drought Mitigation Project, Polavaram project, Uttarandhra Sujala Sravanti and others, expected to cost between Rs 70,000 crore and Rs 80,000 crore. The officials said the proposals to form SPVs for the other projects were pending with the finance department and would be formed after getting financial concurrence.
Water for 120 days
The project is proposed to enhance canal capacities and to add new schemes to draw water from Srisailam to tap the required water for the parched Rayalaseema within a period of 30 to 40 days as against the earlier 120 days