Green Light for Rs 7,360-Cr Godavari Water Project To Fill Twin Reservoirs and Rejuvenate Musi
Project aims to supply drinking water and support Musi river rejuvenation through HAM model
Hyderabad: The state government on Monday issued orders for commencement of works under the Godavari Drinking Water Supply Scheme, Phase-II & III, aimed at filling the Osmansagar and Himayatsagar reservoirs as part of the rejuvenation of the Musi river. The project, sanctioned at an estimated cost of 7,360 crore, is being implemented under the hybrid annuity mode (HAM), with the government bearing 40 per cent of the project cost and the contracting agency investing the remaining 60 per cent.
The government had floated tenders for the project in two packages. Package-I, entrusted to Megha Engineering and Infrastructure Limited (MEIL), Hyderabad, involves laying two rows of 3,000-mm diameter MS pumping mains, each designed to carry 10 tmc ft of water from the Mallannasagar to Ghanpur. It also includes construction of a pump house, electro-mechanical equipment, transformers and a substation at Mallannasagar, besides a 1,170 million litres a day (MLD) capacity water treatment plant and a 40-million litre clear water reservoir-cum-pump house at Ghanpur.
The project includes manning, operation and maintenance for 10 years. A special purpose vehicle, MEIL Mallannasagar Water Infra Private Limited, was formed by the concessionaire, and the concession agreement for Package-I was concluded on September 18, 2025.
As the process of sanctioning a bank loan was expected to take considerable time, the concessionaire sought permission to commence the works using MEIL's internal accruals. The government has permitted the SPV to execute Package-I through MEIL's internal funds until the bank loan is sanctioned, subject to the terms of the concession agreement.
The government has notified December 12, 2025, as the Date of Appointment (DOA) for Package-I with retrospective effect. HMWSSB has been directed to ensure financial closure within the stipulated 180 days from the date of the concession agreement and submit a compliance report.
In a related development, the government ratified the deviation from the escrow account requirement and notified July 15, 2026, as the DOA for construction of 22 sewage treatment plants (STPs) with a combined capacity of 471.5 MLD under Package-II of AMRUT 2.0 (Tranche-III). The `1,906.44-crore project covers urban local bodies between GHMC and ORR limits and includes operation and maintenance for 15 years. The project is being implemented under HAM, with 40 per cent investment by the agency and 60 per cent government share.
The work was entrusted to BVSR-SGS-RCPL (JV), following tender clearance and approval. The government subsequently approved Raghava Sewerage Projects Private Limited as the SPV, with the Concession Agreement concluded on October 7, 2025, providing for completion within 24 months and O&M for 15 years.
HMWS&SB informed the government that the concessionaire had submitted the required escrow, substitution and financing agreements, financial package and financial model. Union Bank of India communicated the escrow account details on July 15, 2026. The government subsequently ratified the deviation from Clause 28 of the Concession Agreement regarding establishment of the escrow account before the DOA and formally notified July 15, 2026, as the DOA, subject to compliance with other contractual conditions.