Govt may float tax-free bonds to fund irrigation projects in State

The Water Resources Department is seriously considering floating tax-free bonds to raise funds for irrigation projects in the State.

The Union Budget has made provisions to float tax-free bonds for irrigation projects under the infrastructure sector and the department is looking into certain technical issues to float bonds, Water Resources Minister M B Patil told reporters here on Thursday.

The department expects massive overheads over the next three years to complete its projects in the State. As per conservative estimates, at least Rs 25,000 crore is required each year for land acquisition, reclamation and rehabilitation and project works. “This is a requirement we are looking for year-on-year. Floating tax-free bonds outside borrowing limitations will prove beneficial,” he hoped.

On the Mekedatu dam project, Patil said the State government had sanctioned Rs 11 lakh to prepare a detailed project report (DPR) to identify possibilities in the region. The DPR will suggest how much water can be captivated and whether it can be used for power generation, irrigation or only for drinking. The DPR will get over in the next eight to 10 months. The valuation of the Expression of Interest (EoI) is going on and five companies have taken part in the tender, the minister added.

“The dam project doesn’t require any permission or discussion with anyone. The water is ours. What we do with it is the sole prerogative of Karnataka,” Patil said when asked whether there will be any talks with Tamil Nadu since the Mekedatu region falls in the Cauvery basin. He said the Karnataka government had taken the necessary legal opinion and that the Mekedatu dam could be built without attracting any adverse litigation.

Replying to a question on the irrigation department’s expectations from Friday’s State Budget, Patil said it had sought an allocation of Rs 26,000 crore for the next financial year — most of the expenditure will be towards the third phase of the Upper Krishna Project (UKP).

According to the minister, expenditure on the UKP Phase III has almost doubled in the wake of the new land acquisition law. Acquiring land for the project itself would cost no less than Rs 12,000 crore. Overall, at least Rs 21,000 crore are likely needed for the UKP works, R&R (Reclamation and Rehabilitation) and land acquisition.