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HUDCO has funded a large number of water supply projects in the country which include augmentation, rehabilitation, extension as well as new schemes for un-serviced areas. The funding covers various components of water supply schemes such as development of source-weir/barrage/river intake, transmission lines, conventional treatment plants, storage facilities - sumps, Over Head Tank, distribution network, pumping stations, energy saving devices, leakage detection systems, metering, aquifer recharge, etc.

HUDCO has funded these projects to state level parastatals like Water Supply & Sewerage Boards of the States, ULBs, PHE departments, Jeevan Pradhikaran, etc. State governments are also taking up Viability Gap Funding for water supply schemes in small and medium towns, with minimum burden on the state exchequer under the Jal Jeevan Mission.

Some states have initiated water supply projects based on innovative funding mechanism. In Madhya Pradesh, HUDCO is providing assistance for improving water supply in a large number of urban local bodies under the State Action Plan Schemes of Mukhyamantri Shehari Peyjal Yojana. Some other important projects include financial assistance to Hyderabad Metropolitan Water Supply & Sewerage Board for implementation of water supply distribution networks in the peripheral circles of Greater Hyderabad Municipal Corporation, Telangana Drinking Water Supply for providing a comprehensive water supply project to cater to the needs of rural, urban, institutional, commercial and industrial areas of 3 district of Telangana, Tamil Nadu Water Supply and Drainage Board for water supply projects at Arrupakottai and Coimbatore in Tamil Nadu. HUDCO has provided a big boost to Jal Jeevan Mission Programme of Govt. of India in the State of Rajasthan by providing Viability Gap Funding wherein piped water supply is planed for every rural household. This project is to cover eight regions of Rajasthan. HUDCO has also cotributed in AMRUT programme for augmentation of water supply in seven municipalities and their adjoining areas in Kerala. HUDCO's contribution has helped the nation in increasing the coverage of population with water supply of desirable quality and quantity.

HUDCO's approach to sustainable habitat development is translated into a policy by integrating water supply, sewerage and drainage projects into a holistic development. HUDCO insists on sewerage and drainage schemes simultaneously wherever water supply projects are sanctioned. HUDCO has funded wide gamut of sanitation projects with low-cost sanitation and tertiary treatment plants of waste water for industrial usage in the country benefitting individual and community. The projects include on-site facility like 2-pit pour flush units, septic tanks, biogas digesters; or off-site facility such as oxidation ponds, sewerage system, including conventional sewage treatment plants, in addition to earlier specified technologies, to achieve the permissible discharge standards of the effluent.

HUDCO has actively participated in implementation of sanitation related National Action Plan schemes of Basic Sanitation, Integrated Low-Cost Sanitation, Valmiki Ambedkar Awas Yojana (VAMBAY), Shelter and Sanitation facilities for Foot Path Dwellers, Night Shelter Schemes etc. HUDCO evolved its own subsidy programme for providing public / community toilets using innovative funding mechanism of utilizing MPLAD funds and involving NGOs and ULBs for its construction and up-keep. HUDCO also funded mobile toilets at Khumb Mela with complete treatment and material recovery mechanism in association with premier technical institute, under Corporate Social Responsibility (CSR) funds.

To avoid delay in project completion due to financial shortfall, HUDCO has provided viability gap funding for implementation of sanitation related projects under Government of India's flagship schemes such as Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Atal Mission for Rejuvenation and Urban Transformation (AMRUT), etc. Recently HUDCO has provided the financial assistance to underground sewerage schemes in Villupuram and Tindivanam Municipalities in Tamil Nadu, Sewerage facilities in ULBS of Punjab and Rajasthan, Viability Gap Funding under AMRUT to the State of Rajasthan etc.

Rapid urbanization has resulted in construction of office complexes, road pavements and high-rise apartment buildings, which increases the paved surfaces. The increased in paved surface results in the increase the surface runoff during rains and therefore requires an efficient urban drainage system to avoid the flash floods in cities. The urban drainage projects are generally implemented with sewerage system projects. However, HUDCO has been promoting exclusive urban drainage projects as one of the important components of the basic services to combat flooding in urban areas.

HUDCO has extended its financial assistance to project covering storm water drain in five towns of Odisha namely Bhubaneswar, Cuttack, Berhampur, Rourkela and Sambalpur.In addition, financial assistance has also been provided to the drainage for flood affected districts of West Bengal, strengthening drainage networks in Jaipur and Lucknow etc. Drainage projects are often integrated with the road restoration, construction and maintenance of nallahas, canals etc. HUDCO has been funding such schemes in Madhya Pradesh (Mukhya Mantri Shahri Adhosanrachana Yojana), Storm Water Drainage works in Bharatpur (Rajasthan), Infrastructure works in various ULBs of Punjab etc. The implementing agencies for these projects are state PSUs, Centre PSUs, state level nodal department such as Public Health Engineering Department, Irrigation department etc.