Chhattisgarh Chief Minister Ajit Jogi has asked the state's Advocate General and water resources department to examine how best to terminate the agreement with Radius Water Industry. The official reason: adverse media reports on the project.

Signed in 1998 between Radius Water and Chhattisgarh State Industrial Development Corporation (CSIDC), the agreement allowed the company to supply water to the Borai industrial area along a 23-km stretch of Sheonath river.

R C Sinha, CSIDC's managing director, concedes "the projects working well, and the contract is going by the book." But he confirms that they are now looking at ways to end the contract. Radius Water supplies 4 mld (million litres daily) of water at the rate of Rs 12.60 per litre to industries, the railway station and a railway colony. The catch is that CSIDC continues to pay for this assured amount of water irrespective of whether they collect this amount from the industries. They have already paid Rs 1.9 crore to the company.

One of the reasons for dissatisfaction over the project is that the number of water-intensive industries, which were expected to move, didn't. The largest consumer HEG, courtesy a stay order, is paying half its water bill. The others are LNG Bhilwara and Khoday Distilleries.

"We have written a letter to the Chief Minister explaining our situation. Jogi is an engineer and will understand that the project is not just about building a dam," Kailash Soni, CEO of Radius Water Industry, told The Sunday Express. He says he has also spoken to companies running similar projects in Tirupati and Vishakhapatnam and they have decided to file a joint PIL in case the government cancels the contract arbitrarily.

The project has invited a lot of attention and activists like Rajendra Singh and Medha Patkar have criticised Chhattisgarh for "privatising" the river. They ask why local residents weren't consulted before deciding the project. Moreover, the river, they say, has become inaccessible there's water but they are not allowed to fish and bathe.

Local residents admit the project has definitely improved the water-supply. The company has built an integrated water supply system building a dam on Sheonath river, setting-up pumping stations, distribution lines and effluent treatment plants. The company has spent nearly Rs 25 crore in creating the infrastructure and the total cost is expected to be Rs 256 crore. In fact, they have just completed talks with a foreign funding agency. The dam is built in 200 metres with 3 metre gates that operate automatically with a flood regulating barrier system. The water spreads over 3 km, forming a reservoir. "The project was given clearance only because of the advanced technology involved," says Soni. "The fact that people are not being allowed access is untrue. It's only because of safety reasons that the reservoir has been kept out of bounds."