Enviro Infra Engineers secured a ₹130.14 crore contract from Uttar Pradesh Jal Nigam for a 60 MLD Sewage Treatment Plant in Varanasi. The project includes a 15-year operation and maintenance period, offering long-term revenue visibility.
Enviro Infra Engineers Awarded ₹130 Crore Varanasi STP Project
Enviro Infra Engineers Ltd has received a Letter of Acceptance (LOA) for a ₹130.14 Crore project to build a 60 MLD Sewage Treatment Plant in Lohta, Varanasi, Uttar Pradesh. Reader Takeaway: Long-term revenue stream from 15-year O&M contract; Project execution under government's Namami Gange Programme. ## What just happened Enviro Infra Engineers Limited announced that the Uttar Pradesh Jal Nigam (Rural) has issued a Letter of Acceptance (LOA) for a new project. The project involves the development of a 60 MLD Sewage Treatment Plant and associated infrastructure in Lohta, Varanasi. The total order value stands at ₹ 130.14 Crore, excluding GST. ## Why this matters This order signifies a significant business development for Enviro Infra Engineers in the water and sanitation infrastructure sector. The Hybrid Annuity Model (HAM) PPP structure is designed for shared risk and reward between the developer and the government. The inclusion of a 15-year Operation and Maintenance (O&M) contract is particularly important as it provides a sustained, long-term revenue stream beyond the initial construction phase, enhancing earnings visibility. ## The backstory The project is part of the larger Namami Gange Programme, a flagship initiative by the Indian government to clean and rejuvenate the Ganges river. This government backing provides a degree of assurance regarding the project's importance and the counterparty's creditworthiness. ## What changes now The company will proceed with project execution. For this, Enviro Infra Engineers has incorporated a Special Purpose Vehicle (SPV) named 'Varanasi Lohta STP Private Limited'. The project has a defined timeline, including a 21-month construction period and a subsequent 3-month trial operations phase. Following successful trial runs, the 15-year O&M period will commence. ## Risks to watch Key risks include potential delays in the 21-month construction timeline and the financial performance and operational efficiency during the 15-year O&M phase. Investors should also monitor any future developments related to the SPV's performance. ## Peer comparison (No peer comparison data available from the filing.) ## Context metrics (time-bound) * **Order Value:** ₹ 130.14 Crore (excluding GST) * **Construction Period:** 21 months * **Trial Operations:** 3 months * **O&M Period:** 15 years ## What to track next Investors should track the commencement of the project, adherence to the construction schedule, and updates on the operational performance during the O&M period. The financial health of the SPV and the company's overall order book growth will also be crucial.
