US Supported Public Private Partnership Improves Tirupur Area Water Supply and Sanitation

Chennai | February 7, 2006

The United States Agency for International Development (USAID) and a consortium of companies have launched a unique project that is helping thousands of people receive improved water supply in Tamil Nadu. Ms Jayalalitha, the Chief Minister of Tamil Nadu, inaugurated a plaque commemorating this project, in Chennai today. David Hopper, US Consul General, Chennai, was present at the event.

Mr. Hopper said: “The project is the first public-private partnership in the water and sanitation sector in South Asia to be implemented on a Build-Own-Operate-Transfer (BOOT) basis. It represents a new approach to providing the much needed environmental infrastructure in South Asia.”

The project, developed by the Government of TamilNadu, Infrastructure Leasing & Financial Services (ILFS) Ltd. and Tirupur Exporters Association (TEA) with USAID assistance has improved living standards of about 800,000 residents in Tirupur town and its surrounding areas, which includes 80,000 residents of slums. It has met the growing demand of industrial users, increased the supply of water to domestic consumers and provided the town with its first sewerage system. The project is providing 185 million liters of potable water per day, obtained from Cauvery river, to Tirupur and its environs and more than 600 textile firms in and around the town. Water intake infrastructure, a water treatment plant, water transmission and distribution pipelines, a new sewage treatment system and low cost sanitation for slum areas have been built as part of the project.

While IDBI is the lead lender, USAID’s loan guarantee to ILFS for $25 million in long-term (30-year) financing allowed ILFS to borrow the same from US financial markets and helped ensure the undertaking’s financial viability. USAID has also provided technical assistance for the project under its Financial Institutions Reform and Expansion program.

Tirupur, which is approximately 50 km east of Coimbatore, has earned international recognition as India's leading knitwear exports center and accounts for about one billion U.S. dollars in earnings for the country.
 

Photo Credit: M.C. Shrikant, New Tirupur Area Development Corporation Ltd.

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