The Union Cabinet has approved the proposal to complete the balance work of the North Koel Reservoir project in Jharkhand and Bihar.

The proposed project will entail an investment of Rs 1,622.27 crore to be incurred during three financial years from the start of the project.

Approval was also accorded to storage of water in a dam restricted at a lower level than envisaged earlier to decrease the submergence and to protect Betla National Park and Palamau Tiger Reserve.

With the new lowered elevation level of 341 mtr, the Mandal dam will have a storage capacity of 190 million cu mtr. The project intends to provide irrigation to 1,11,521 ha annually in backward and drought prone areas of Palamu & Garhwa districts in Jharkhand and Aurangabad, and Gaya districts in Bihar. The potential irrigation in Bihar will be 91,917 ha and that in Jharkhand will be 19,604 ha. The total expenditure of the project as assessed on date is Rs 2,391.36 crore.

 The common components worth Rs 1,013.11 crore of the balance work will be financed by the central government as a grant from PMKSY fund. It will also fund 60 percent of the cost of the balance work worth Rs 365.5 crore from Long Term Irrigation Fund (LTIF) under PMKSY as grant from the states of Bihar and Jharkhand.

The remaining 40 percent will be funded by states of Bihar and Jharkhand. The balance work worth Rs 243.66 crore (Bihar 212.43 crore and Jharkhand 31.23 crore) will be provided as loan from LTIF through NABARD at a rate which is not subsidised and is related to market borrowing cost with no interest subvention.

The cabinet also gave its nod for execution of the balance work of the project on a turnkey basis by WAPCOS, as Project Management Consultant (PMC).