Biwater of Malaysia and consortium led by GVK International and Bovis India are among the seven companies that have been shortlisted for undertaking the project.

The Japanese Overseas Economic Co-operation Fund (OECF) will fund 75 per cent of the Rs 1,200 crore Phase I project which will bring 270 million litres of water to Bangalore city every day. The other financiers for the project include the Bangalore Development Authority, the state government and the water supply board.

The Rs 1,300 crore Phase II project will be funded partly by the state government, Housing and Urban Development Corporation (Hudco), Life Insurance Corporation (LIC) and other financial institutions besides the water supply board. The Bangalore Water Supply & Sewerage Board plans to raise Rs 100 crore through a bond issue to fund theproject. The project envisages bringing in an additional 500 million litres of water per day.

The Board has also drawn up plans for a Rs 760 crore project for the upgradation of the water supply and sewage system of Bangalore city. It has sought an `expression of interest' from international bidders and from Indian and international consortium for investing on rehabilitate-operate-transfer (ROT) basis. The board has said that it will invite bids for the project from the short-listed parties. The state government has acquired land for the project but has said that it will not extend any sort of guarantee to investors. The project includes conducting studies of the existing water supply and sewage system, preparing a techno-economic feasibility report and the execution of the project.

Karnataka, in a major policy initiative, has decided to rope in the private sector in providing drinking water and sewerage services throughout the state. As a first step towards this, the state owned Karnataka Urban WaterSupply and Drainage Board (KUWSDB) has entered into an MoU with the UK-based Anglian Water International (AWI) to form a new joint venture utility to handle the task.

As per the terms of the MoU, AWI will initially carry out detailed studies in Belgaum, Hubli-Dharwad, Mangalore and Mysore to evolve a joint approach to water utility management. Studies will initially be conducted in Belgaum and Hubli-Dharwad over the next four months and later extended to the other two cities.

The Karnataka government will take a final decision after examining AWI's reports in consultation with the KUWSDB and local civic authorities. The government will form separate joint sector bodies to manage the facility in the four cities after obtaining cabinet approval. Once the cabinet takes the decision to accept AWI model, the government has said that it will bring in the necessary legislation to enable the implementation of the initiative and put in place an independent regulatory structure.