While Bechtel and Mahindra are jointly acting as the EPC contractor for the project, Mahindra has tied up with the other consortium partner United Utilities of the UK to float a joint venture to operate the O&M part of the project which has a concession period of 30 years.

Mahindra executive director Arun Nanda said the project will supply 60 per cent of the total 185 MLD of water to industrial units at a higher cost which will help cross subsidise supplies to domestic users in the Tirupur municipality areas.

In the second phase, the project also aims at recycling domestic water and supplying the same to industry for its uses when the demand for water is also expected to go up considerably.

The newjoint venture for O&M will have a capital base of a few million dollars. The Tirupur water supply project is targeting to get an internal rate of return in excess of 20 per cent that is mentioned in the concession agreement.