Chandigarh, Jun 18 (IANS): The Punjab government will seek a $210 million loan from the World Bank or the Asian Infrastructure Investment Bank (AIIB) for the canal-based water supply project for Amritsar and Ludhiana under the Punjab Municipal Service Improvement Project (PMSIP).

The decision to seek such loan was taken on Friday by the state Cabinet at a virtual meeting chaired by Chief Minister Amarinder Singh.

The cabinet authorised the Chief Minister to take any decision to meet the objectives of the project and to ensure successful and timely implementation of various activities proposed by both the lenders.

The proposed project investment is expected to cost around $300 million, of which the International Bank for Reconstruction and Development (IBRD) will finance 70 per cent and the Punjab government 30 per cent.

The cabinet was informed that the present water supply system to the residents of Ludhiana and Amritsar towns is through deep bore tubewells installed at different sites.

However, with the passage of time, the groundwater level is depleting, causing the tubewells to need frequent replacement. Also, the discharge in the tubewells gets reduced, as a result of which residents often complain of getting insufficient water for drinking purpose.

To overcome this problem, it has now been decided to shift to a canal-based water supply in these two towns by seeking a loan.

The work for the water supply for Amritsar town has already been awarded, whereas request for proposal for Ludhiana town is being floated. The implementation period for this project will be three years after award of work.