If the Sonia Vihar plant does not become operational in time, DJB would have to divert water from other areas so that private companies can provide 24x7 supply for South Delhi. Worse, the contract between French company Degremont and the DJB for the treatment plant has a clause that states that "in the event of non-availability of raw water to the facility, the responsibilities of the contractor shall stand suspended. During such period of suspension, the board shall be liable to pay to the contractor the base service charge and contribution towards reserve fund... the board shall be liable to pay inventory holding charges of chemicals and consumables". All this could come to around Rs 3 crore a year. Degremont hasn't claimed penalty yet, but that's probably only because it is one of the shortlisted bidders for the more lucrative South Delhi's water supply.
Apart from Degremont, another French company, Sour, and the Bechtel-backed Manila Water are also reportedly bidding for the contract. Bechtel currently is locked in arbitration with the Maharashtra State Electricity Board over its unpaid dues and lost profits in Enron's Dabhol project. Sources in DJB assert that Vivendi Water is a contender too. Vivendi's joint venture partner, the Tata subsidiary TCE Consultancy Engineers Ltd, was involved along with PWC in setting down the agenda for privatisation.
With another one-sided deal about to be inked with a foreign operator, DJB could well go the Dabhol way. Unless the fine print is put to debate and the proposed hike in water prices duly considered.
