Omen of Future Glimpsed in 25 Kilometer Pipe to Indian Seacoast

With pipes running into the sea, the copper smelter on the arid coastal plain is a glimpse of India’s future.

Vedanta Ltd. needed to be sure of a consistent water source to expand its plant 25 kilometers (15 miles) from the shore in the southern state of Tamil Nadu. Like more than half of the country, the city of Thoothukudi lacks adequate supplies. So India’s biggest producer of the red metal hired Larsen & Toubro Ltd. to build a desalination plant to convert ocean water to meet its needs.

“Going forward, Indian companies will have to consider setting up more desalination plants considering the water availability problems in our country,” said P. Ramnath, who runs Vedanta’s Indian copper operations.

More than half of India is facing high water stress caused by overuse of groundwater that supplies 85 percent of India’s drinking water and irrigates 60 percent of its farms, according to the World Bank. With 590 million Indians expected to live in cities by 2030, increasing competition for water is likely to drive companies and municipalities to turn to desalination.

That’s even as it’s more costly and energy intensive than strategies such as water recycling and rainwater harvesting.

“Indian industry will find it more difficult to access clean water as cities compete with agriculture for groundwater,” said M.S. Unnikrishnan, managing director of Thermax Ltd., which built one of India’s first desalination plants for a company in the late ’90s for Nirma Ltd. Desalination is “an option more coastal Indian cities and companies will have to look at seriously.”

0.1 Percent

Prime Minister Narendra Modi’s government estimates the world’s second-most populous nation will need to spend $125 billion on urban water, sewage and drains by 2030.

Still, cost and the absence of a national water strategy mean desalination’s appeal is likely to remain mainly for corporate projects. Reliance Industries Ltd. and Tata Power Co. are among companies with existing facilities.

India currently has desalination capacity of 1,990 cubic meters a day across 180 industrial and municipal plants, according to consultants TechSci Research. That’s less than 0.1 percent of the country’s daily supply. Saudi Arabia, the biggest user of desalinated water, produces 3 million cubic meters a day.

Only about $250 million worth of desalination capacity was added in India in 2014, according to TechSci. Based on announced projects, the figure may almost double to $470 million by 2020, it says.


Cost is the main reason. The price to produce a cubic meter of desalinated water at a municipal plant is as much as 48 rupees (73 cents), according to ICRIER, an Indian research organization that advises the government. By contrast, the Delhi water authority charges households 2.93 rupees per cubic meter.

“India’s water utilities barely manage to recover their operating costs,” said Romit Sen, deputy director at Columbia University’s Delhi-based Centers for International Projects Trust. “In a country where energy charges are tough to recover, it will be so much tougher for utilities be able to charge more for water from desalination plants.”

Chennai, previously known as Madras, is the only major Indian city to run a desalination program for household supplies. The federal government provided much of the funding for its creation.

“At the end of the day, metering, charging the right costs for water and strong, accountable city governments will decide if India needs and can set up more desalination plants,” said Jaijit Bhattacharya, a partner at KPMG India’s infrastructure division in New Delhi.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE