₹2 Lakh Cr EPC Opportunities to Arise from River Linking Projects: ICRA
A study by ICRA estimates that ₹2.0 lakh crore worth of business opportunities will open up for engineering, procurement, and construction (EPC) companies over the next decade, driven by the development of four priority interlinking river (ILR) projects. Of this, ₹80,000 crore in contracts is expected to be awarded within the next four years, especially for companies involved in large irrigation projects.
The National Water Development Agency (NWDA) has identified 30 ILR projects (16 in peninsular India and 14 in the Himalayan region), with 60% funding from the Government of India and the remaining from state governments. The government’s emphasis on the water sector has notably increased, as seen in the budget allocation of ₹78,000 crore to the Ministry of Jal Shakti (MoJ) for FY2025, largely driven by the Jal Jeevan Mission, reflecting a 69% CAGR over the last six years.
Chintan Lakhani, Vice President and Sector Head – Corporate Ratings, ICRA said, “The four-priority links are just the beginning of the decade-long plan of the ILR project implementation. While the share of these projects as a percentage of budgetary allocation to the ministry is currently minimal, at ~5% i.e. Rs. 3,908 crore, it is expected to increase as more projects get approval and awarding/construction gains momentum. Being 60% funded by the Central Government, the counterparty risks and funding risks for these projects are largely mitigated, though the balance 40% exposure to state government finances could be an overhang”.
The NWDA has identified four priority projects, namely the Ken Betwa, Kosi-Mechi, Parabati Kalisindh Chambal and Godavari-Cauvery links, for early implementation. ICRA estimates these priority links to be completed at a cost of ₹2.6 lakh crore by FY2035. The Godavari-Cauvery project is the largest of the four (at 45% of the cumulative project cost) and the Kosi-Mechi link is the smallest at 4%. The first awarded ILR project (accounting for 21% of the cost for priority links), the Ken Betwa, is already under implementation.
Speaking on the issue, Lakhani further added, “While the Parbati Kalisindh Chambal and the Godavari-Cauvery links are in advance stages of finalisation of the detailed project reports, consensus building among states remains critical for timely implementation of these projects. ICRA anticipates the Parbati Kalisindh and Godavari-Cauvery projects to start from FY2028 and FY2029, respectively, based on the current status of the projects. The Ken Betwa and Kosi Mechi projects are expected to lay the foundation for the implementation of these larger and more complex projects. With the announcement of the financial support of ₹11,500 crore towards various flood control and irrigation projects for Bihar in the FY2025 Union Budget, ICRA expects the Kosi Mechi to start contributing to the order book in the next 12-15 months”.
