Interlinking river (ILR) projects in India could provide up to Rs 2 lakh crore in business opportunities for engineering, procurement, and construction (EPC) companies over the next four years, according to a report by ICRA. The completion of four key ILR projects is expected to generate substantial economic benefits, with Rs 80,000 crore allocated for large-scale irrigation developments.
Four priority projects mark the beginning of a decade-long ILR plan According to ICRA, the four-priority river links are the start of a decade-long ILR project implementation. These projects currently account for 5% of the Ministry of Jal Shakti’s budgetary allocation, amounting to Rs 3,908 crore. However, this percentage is expected to rise as more projects receive approval and construction accelerates.
Chintan Lakhani, Vice President and Sector Head – Corporate Ratings at ICRA, highlighted the financial structure: “These projects are 60% funded by the Central Government, which largely mitigates counterparty and funding risks. However, the remaining 40% exposure to state government finances could pose challenges.”
30 ILR Projects Identified by NWDAThe National Water Development Agency (NWDA) has identified 30 ILR projects, consisting of 16 peninsular river links and 14 Himalayan river links. The government will provide the bulk of the funding, with state governments contributing the balance.
The top four priority projects identified by NWDA for early implementation are the Godavari-Cauvery, Kosi-Mechi, Parbati-Kalisindh-Chambal, and Ken-Betwa links. The estimated cost for completing these priority links by FY35 is Rs 2.6 lakh crore.
Godavari-Cauvery project largest among the four priority links The Godavari-Cauvery project, accounting for 45% of the total expenditure, is the largest of the four, while the Kosi-Mechi link is the smallest, representing just 4% of the budget. The Ken-Betwa project, the first ILR project to be awarded, accounts for 21% of the expenditure and is currently being implemented.
Consensus among states crucial for timely project execution Lakhani further stated, “While the Parbati-Kalisindh-Chambal and Godavari-Cauvery projects are in advanced stages of finalising their detailed project reports, consensus building among states is critical for timely implementation.” Based on the current status, ICRA anticipates that the Parbati-Kalisindh-Chambal and Godavari-Cauvery projects will commence in FY28 and FY29, respectively.
The Ken-Betwa and Kosi-Mechi projects are expected to lay the foundation for the execution of these more complex projects. With the announcement of Rs 11,500 crore in financial support for flood control and irrigation projects in Bihar in the FY2025 Union Budget, ICRA expects the Kosi-Mechi project to contribute to the order book within the next 12 to 15 months.
Increased focus on the water sector by the government The Government of India’s influence in the water sector has grown significantly in recent years. The budgeted allocation for the Ministry of Jal Shakti has increased to approximately Rs 78,000 crore for FY25, with a strong commitment to the Jal Jeevan Mission. This initiative has seen a 69% compound annual growth rate over the last six years, according to ICRA.
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