The demand for fresh water in India has continued to increase at a rapid pace. Continuous investment in water and wastewater improvement has created ample opportunities for water treatment equipment technology in India. This article gives an overall outlook on water and wastewater treatment business scenario in India.
In the last decade, the demand for fresh water in India has continued to increase at a rapid pace, primarily due to the growing population, increasing urbanisation and the constant economic growth. Due to over-exploitation of water resources in coastal areas, seawater is often mixed with groundwater in some cities like Chennai and Mumbai, making groundwater high in salt content. The reducing per capita availability of water and deteriorating water quality has forced the country to look for sustainable and effective water technologies to provide clean and quality water. Table 1 depicts the water demand in India till 2050.
Billion Cubic meters
Standing Committee of Ministry of Water resources
As haphazard urban development continues in India, infrastructure to support the growth is being stretched to its breaking point. Thus, nowadays, water management is becoming an inherent part of planning and development. The municipalities and industries are continuously investing substantial money in water and wastewater improvement, creating ample opportunities for water and wastewater treatment equipment technology in India. Table 2 gives the funding allocation for Water Supply and Sanitation (WSS) for state, centre and private sectors.
The 11th Five Year Plan (FYP) (2007-2012) identified a total requirement of 53,666 crore to provide 100 per cent water supply coverage to the urban population. Out of total allocation of 50,000 crore under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), 40 per cent of the funds, that is 20,000 crore, has been envisaged for water supply projects. Additional Central Assistance of 7,726 crore has been released in March 2010.
The funding allocation for WSS in the 12th FYP (2012-2017) is estimated to be 5,000 crore. Private sector and PPP-based investments, which contributed to about 30 per cent of the total investments in the 11th FYP, are expected to rise to 50 per cent in the 12th FYP. The Government of India has set up the Viability Gap Funding Scheme as a special facility to support the financial viability of those infrastructure projects that are economically justifiable, but not viable commercially in the immediate future. It involves upfront grant assistance of up to 20 per cent of the project cost for state or central Public-Private Partnership (PPP) projects that are implemented by a private sector developer selected through competitive bidding.
Current Market Scenario
Europe and North America are the largest markets for both wastewater and sludge treatment. The Asia Pacific (APAC) region has emerged as the largest regional market driven by opportunities both in the municipal and industrial sectors. The water and wastewater treatment market in India is in the growth phase and has immense untapped potential.
Frost & Sullivan estimates the total Indian water and wastewater treatment equipment market to be more than 60 billion for the year 2011. Before purchasing a water or wastewater equipment unit, purchasers should test their water to be certain that treatment is needed and that the equipment being selected is appropriate for the problem. Hence, an end user appoints a technical consultant to give recommendations to the Engineering, Procurement and Construction (EPC) contractors and equipment suppliers. Some end users appoint the equipment and component suppliers with their own technical team, while others outsource it to an EPC contractor. The preferred supplier is the one who provides a one-stop solution with good operations and maintenance support.
Wastewater treatment and water recycling or reclaiming for reuse has prevailed for quite some time in other parts of the world such as Europe and United States of America. However, with the growing demand for potable water, the rate of using reclaimed water is gaining pace in the Asia Pacific markets, especially in India. Recycling of water and wastewater treatment involves a combination of technologies to treat the water and make it reusable or attain a safe standard for disposal. Technologies such as nanotechnology, desalination and membranes have been widely used for water treatment depending upon the quantity and quality of water/ wastewater and the available funds as per the specific use. As energy-efficient processes are the need of the hour, forward osmosis, hybrid desalination and solar desalination will gain importance over the years.
In recent decades, compliance with Government wastewater quality requirements has been the primary driver of industrial wastewater treatment programs in India. There are total 46 categories (including distilleries, pulp and paper, power, refineries, etc) specific to each of the industry segments in India.
An industry should abide by the Government wastewater quality requirements for the specific concentration limits of the wastewater discharged. The Zero Liquid Discharge (ZLD) or Zero Discharge (ZD) Policy has been drafted by the Ministry of Environment and Forest (MoEF) and Central Pollution Control Board (CPCB), which urges industries to strive for ZLD status. The implementation of this Policy is the responsibility of the respective State Pollution Control Boards (SPCBs). Currently, only a few states and specific industrial end users like textile and automobile manufacturers and breweries are mandated to achieve ZLD status. It is expected to be implemented uniformly all over the country in the coming years.
The market is highly fragmented. Cost, high expertise, prior experience and brand equity are critical competitive factors in the Indian market. For huge municipal and industrial projects there is a pre-bidding process and hence high expertise and prior experiences are critical factors. Companies that offer energy-efficient solutions at competitive costs are likely to take a central position in Indian water and wastewater treatment market.
How will the Market Opportunities Pan Out
Water and wastewater treatment equipment market is in its growth phase and will gain momentum in the next five years. During this phase, water and wastewater business is anticipated to provide ample scope for services such as Operations and Maintenance (O&M), Annual Maintenance Contracts (AMC), etc. However, O&M for tenure of 3-5 years will gain prominence as more and more end users outsource the O&M of water and effluent treatment plants to focus on their core competencies. Similarly, municipal desalination can turn out to be a boon for coastal cities teeming with growing population and reducing fresh water sources. The current contracted capacity is more than 200,000 million cubic meters per day and is expected to clock double digit growth rates with appropriate action plans by local and state governments. For example, Mumbai is planning to develop two desalination plants.