Just ten days after Salem City Municipal Corporation Mayor A. Ramachandran announced the cancellation of a tender awarded to a private company to supply drinking water to the city’s residents round the clock, the State government clarified that the corporation and the company signed an agreement on June 19 to revamp the city’s water supply infrastructure.
It was in February this year that the corporation awarded the tender, worth ₹4,315 crore, to the private company to supply drinking water for a period of 25 years. The move had drawn much opposition from various political parties at that time.
During a council meeting on June 29, the Mayor announced the cancellation of the tender, but corporation officials did not provide any detail in this regard, creating confusion among the public.
It was against this backdrop that the State government issued a release, dated July 8, 2026, saying that the Department of Municipal Administration and Water Supply, on March 6, 2024, gave administrative sanction for ₹758.13 crore to revamp and create water supply infrastructure in Salem Corporation. Based on the administrative sanction, a letter of award (LoA) was issued to a private company following a resolution passed on February 9 this year.
Chief Minister C. Joseph Vijay revised the administrative sanction amount to ₹1,035.61 crore in a government order (G.O.) issued on June 4, 2026. This included the Union government's share of ₹227.44 crore under the Amrut 2.0 scheme, the Tamil Nadu government's share of ₹393.92 crore and the private company share of ₹414.25 crore. Based on the G.O., an agreement was signed between the private company and Salem Corporation Commissioner on June 19, the release added.
The release said that the company, during the first year, will assess the drinking water infrastructure for 24/7 supply and, over the next four years, will improve the existing infrastructure and create new facilities. The company will maintain the scheme for the next 25 years at a cost of ₹3,259.73 crore.
Mayor A. Ramachandran told The Hindu that the government signed the agreement with the private company based on an earlier resolution. "Though we announced the tender’s cancellation, the government has now given its consent to the private company, which has begun the work; we cannot do anything on this issue."
Published - July 10, 2026 09:16 pm IST