Speaking to The Financial Express, the minister said World Bank credit amounting to over Rs 390 crore has been lined up for the ongoing second Chennai water supply and sanitation project.

This will form around 70 per cent of the project cost estimated at Rs 560 crore which will expand the network of water supply in the city by an additional 15,000 connections.

According to the minister the rest of the outlay will be raised by the state government through loans and the internal accruals of the Metro Water Board.

Besides providing in the budget for defraying the capital expenditure of around Rs 442 crore every year for the next five years, the state government intends to tap financial institutions like the Life Insurance Corporation and Housing & Urban Development Corporation (Hudco) for meeting the ambitious capital expenditure programme.

The state government plans to access up to Rs 500 crore through a line of credit from Hudco for the urban water supply schemes. About Rs 60-70 crore is to be raised from the LIC.

The minister said the state government would be increasingly moving to designing and policy initiatives in the water supply schemes with the active participation of the private sector.

The Rs 2,000 crore programme over next five years includes also the third Chennai water supply and sanitation scheme involving an outlay of around Rs 900 crore, as also the Rs 572 crore Organisation of Economic Cooperation Fund (OECF) -aided sewerage renovation project under implementation since 1996.

The goal is to provide drinking water of 140 litres per capita per day (LPCD) by year 2001 to the urban areas in an attempt to follow the norms stipulated by the Planning Commission. This year the plan is provide 15,000 new connections.

Metrowater has also decided to move to a design, build and operate (DBO) contract for its new water treatment plant of 530 million litres per day involving a capital outlay of Rs 300 crore.

The minister pointed out that with arrival of the Krishna water, water production of Metrowater has touched a new peak of 440 MLD in 1998 from 240 MLD in 1996. This took per capita water supply from 57 to 100 lpcd.