Government Clears Rs 7,360-Crore Godavari Water Project for Twin Reservoirs

The Telangana government has issued orders for the commencement of works under the Godavari Drinking Water Supply Scheme, Phase-II and III, to fill the Osmansagar and Himayatsagar reservoirs as part of the rejuvenation of the Musi river in Hyderabad.

Sanctioned at an estimated cost of Rs 7,360 crore, the project is being executed under the hybrid annuity mode (HAM). Under this financing framework, the state government bears 40 per cent of the total project cost, while the concessionaire invests the remaining 60 per cent.

Tenders for the comprehensive water project were floated across two packages. Package-I was awarded to Hyderabad-based Megha Engineering and Infrastructure Limited (MEIL). This package entails laying two rows of 3,000-mm diameter mild steel (MS) pumping mains, designed to convey 10 tmc ft of water from Mallannasagar to Ghanpur.

Package-I also includes the construction of a pump house, electro-mechanical equipment, transformers, and an electrical substation at Mallannasagar. At Ghanpur, the scope covers a water treatment plant with a capacity of 1,170 million litres a day (MLD), alongside a 40-million litre clear water reservoir-cum-pump house. The project contract includes manning, operation, and maintenance of the infrastructure for 10 years.

To execute the works, MEIL formed a special purpose vehicle named MEIL Mallannasagar Water Infra Private Limited. The concession agreement for Package-I was concluded on September 18, 2025.

Because the sanctioning of bank loans was anticipated to take substantial time, the concessionaire requested clearance to initiate construction using MEIL's internal accruals. The government approved the SPV to proceed with Package-I using MEIL internal funds until the bank loan is formally sanctioned, subject to the conditions of the concession agreement.

The government officially notified December 12, 2025, as the Date of Appointment (DOA) for Package-I with retrospective effect. The Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB) has been instructed to ensure financial closure within 180 days of the concession agreement date and submit a compliance report.