Government should look at ways to reduce the taxation burden on water treatement and waste water management and how even subsidies can be given in terms of tax sops, says Rajneesh Chopra, Global Head– Business Development, VA Tech Wabag. Excerpts from interview with ETNOW.With Prime Minister Modi stressing a lot about the water conservation in his maiden Mann ki baat as well as the launch of the Jal Shakti Abhiyan, what are your expectations from the budget when it comes to the water conservation sector?
It is highly stressed sector as far as water availability is concerned. There have been various reports from the government and various institutes where it has been highlighted. Now with the Prime Ministers focus on water, in the last few days, we have seen almost everybody talking about it and action plans being drawn by the various government departments, municipalities and state governments. We have also given our inputs through various bodies on how to do it because the problem is not about the availability of water, it is how well we manage that water and water conservation is a key to that.
What does the government need to do now and where do you see the size of the business over the next couple of years if these steps are actually taken?
My individual guesstimate is that probably market should grow at over 15% in the country as far as water treatment and waste water management are concerned. With the current push, we have to see how soon can a lot of existing policies in the central as well as the state level get implemented.
In recent times, we have seen a lot of traction happening in the Namami Gange project, where again the focus was given by the Prime Minister and we have seen a lot of traction happening. A couple of years from now, we can expect excellent results there.
Similarly, there are policies for conservation. The ministry of power has an excellent policy that if in a 50-km radius, there is a waste water treatment plant, the treated water has to be recycled and reused by the thermal power plants. The question is how fast we can implement it and if we do that, it will take care of one of the major water guzzlers in the country and leave a lot of fresh water for human consumption.
Similarly, we have a huge coastline, Today desalinated water is acceptable across the world and within India also. Today the cost of desalinated water can be substantially brought down provided we start using a renewable energy along with the desalination technology and if we do that, it can be a big resource. Third and the most important which the Prime Minister also emphasised is about rain water harvesting. All major urban areas should be statutorily and mandatorily made to harvest rain water.
Tell us a little bit about the R&D at VA Tech. Where do you source your technology form? Is it developed in house? What kind of capex do you have for R&D?
As far as R&D is concerned VA Tech has over 100 patents and based on the current scenario, a few patents would be very relevant. We have technologies where we can treat the waste water up to direct potable reused water. That is something which can be really utilised in the current scenario.
On desalination we have all possible technologies which are there and we continue to do our R&D at three centres — Chennai, Vienna in Austria, and the third one is in Switzerland. Going forward, we have developed a lot of technologies which will come into play as far as market like India is concerned five or 10 years down the line.
Help us understand what sets VA Tech Wabag apart from other players within the sector? What is your core competency that gives you an edge over others?
We are a pure play technology company. Most of our projects will have the latest and advanced technologies and we have the ability to integrate the technologies to optimise the results. It is the process knowledge which VA Tech possesses is something that makes us stand out. The integration of technologies will give optimum result and a lot of technologies which are developed in house or which are licensed from the global players.
The experience of companies, which are directly or indirectly dealing with the state governments has not been great. What has been your experience here?
Most of our projects in the states are funded either under AMRUT where the assistance comes from the central government and the other projects which are funded by multilateral agencies. So we have not encountered any issues as far as the states are concerned with respect to water sector. The opex is paid by the municipalities or the water boards in the states and our model with respect to waste water treatment is quite sustainable and we have not encountered any major issues there.
Definitely, the cash flows and payment cycles can be improved with respect to the state governments and our continuous endeavour is to impress upon our clients the need to get our payments faster.
How much of your business relationship with municipal bodies is EPC based and how much is IP based where you keep on getting annuity and servicing contracts?
As far as EPC is concerned, most of our projects with municipalities and water boards where the funding is already tied up as far as EPC is concerned. Most of these projects have an O&M contract under a design build operate which varies from five years to 11 years.
So as far as EPC is concerned we do not have any issue and that contrRead More – Source