Chennai: The $2 billion diversified business conglomerate, Murugappa Group, and its joint venture partner, Mitsui Sumitomo Insurance Group, plan to launch technologies that will clean up contaminated soil and groundwater to make it safe to develop industrial land that might be polluted.
Many developed countries such as Japan, the US, Netherlands and Canada have developed soil quality standards because of which industries use remediation methods to clean up their environment.
In India, which lacks such environment quality standards, the demand will be first from property owners in industrial areas who want to convert their land for non-industrial use.
“Real growth will happen only when there is government regulation on soil quality,” said Makoto Haraguchi, a senior consultant with InterRisk Research Institute and Consulting Inc, a division of Mitsui Sumitomo. “We believe property developers will be the first to use our services in India.”
The boom in real estate that has led to near paucity of land in the cities is creating suburbs from what was previously industrial land.
Firms are constantly cashing in on the rising land values by giving up land that has housed factories for residential and office space. For instance, the Delhi suburb of Ghaziabad was once dominated by factories.
Murugappa Group and InterRisk have not yet estimated the market potential for remediation services in India, but are hopeful that increasing environmental awareness among the companies would translate into increased demand.
Ramesh Nair, local director, corporate solutions at Jones Lang LaSalle Meghraj, Chennai, said IT and BPO (business process outsourcing) companies have sites vetted by an EHS (environmental, health and safety) team before they decide on where their offices should be based.
He added that with increased awareness about environmental protection, “real estate developers need to make environmental initiatives an integral part of their corporate culture”.
In Japan, which has tough regulations on soil quality, the market for soil and water remediation is estimated in excess of yen 100 billion (Rs3,535 crore).
On an average, it costs between yen 20,000 and yen 50,000 (between Rs7,070 and Rs17,675) per cu.m for soil remediation in large factories; however, the actual amount depends on the level of contamination.
Typical soil contaminants include heavy metals (like cadmium, copper and zinc— which produce toxic effects), harmful organic compounds, pesticides and oil.
Different contaminants are treated in different ways. For example, soil washing, a process that scrubs the polluted part of the soil, removes heavy metals. Thereafter, the removed metals are recycled.
Companies are embracing environmental protection as part of their corporate social responsibility, and Aniruddha Agnihotri of Cholamandalam MS Risk Services, a Murugappa unit, said the group expected demand for its services to come from chemicals, oil and power companies in India.
However, if the government enacts soil quality standards as part of its environmental protection Act, the market potential for remediation services would increase exponentially, he added.
In the case of abandoned land sites, which have been contaminated, local government bodies need to be convinced of the benefits in spending towards remediation, InterRisk Research Institute and Consulting’s Haraguchi said.