Financial Daily from THE HINDU group of publications
Wednesday, Oct 16, 2002
RINL facing shortage in water supply
VISAKHAPATNAM, Oct. 15
WHILE Indian steel major, Rashtriya Ispat Nigam Ltd (RINL), has notched up impressive results on the sales and financial fronts in the first half of the current fiscal, the company is facing a problem from an unexpected source.
The Indian steel major is smarting under a severe water crunch, which may affect its operations in the coming months if immediate steps are not taken to improve the water supply position.
Authoritative sources told Business Line that increased outflows from the Yeleru canal, which brings water from Yeleswaram to RINL's Kanithi Balancing Reservoir, have resulted in the water crisis.
With new consumers drawing water from the Yeleru reservoir, including NTPC, which recently commissioned the 1,000 MW Simhadri Thermal Power Project near Vizag, water levels in the reservoir have been falling in the last three years. From 80.3 mts as on June 1, 1999, the water level dropped to 73 mts on June 1 this year.
According to experts, with the present levels of inflow and outflow, the water level in the reservoir is expected to fall below 65 mts (minimum level for pumping) by May next year.
"If things do not improve, water for irrigation may have to be stopped from November this year and pumping totally stopped by April next year, in which case RINL and other industrial consumers will have no water,'' an expert pointed out.
RINL sources claim that stoppage of water supply to Vizag Steel Plant would lead to "irreparable damage'' to the plant equipment like coke oven batteries and blast furnaces. "Just to restart the coke ovens it would take more than a year. The company would suffer a daily loss of Rs 3.58 crore in the event of stoppage of water supply,'' the sources say.
The company has been partly able to counter the water problem with its measures to stem water consumption. "In fact, due to the water conservation measures adopted by the company, the consumption level has come down from 35 million gallons per day (MGD) to 28 MGD. The measures include avoiding wastage, recycling of waste water, utilisation of ground water, minimising water usage in the township and diversion of storm water for plant use,'' the sources pointed out.
In the light of this trend, experts say that it is essential to augment the water supply by implementing the Rs 530-crore Godavari water scheme, which envisages pumping of Godavari water into the Yeleru canal through two 2,000 mm diameter and 52 km long pipelines. This project could meet the entire water needs of the industrial and other consumers in this region, apart from taking care of the irrigation requirements.
Experts have suggested that the State Government should appoint a consultant for carrying out detailed engineering estimates and firming up the project finance.
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