The Department of Pharmaceuticals (DoP) under the Ministry of Chemicals & Fertilizers will provide financial assistance for setting up a modern common effluent treatment plant (CETP) and water recycling facility at the Alathur Pharma Estate in Tamil Nadu, under the pharma cluster scheme of the DoP, according to sources.

This financial incentive is the first one given to a state by DoP under its cluster development scheme.

Industry sources in Chennai have informed Pharmabiz that DoP has sanctioned the total project amount submitted for the purpose and 10 per cent of the amount has been already allotted. The total sanctioned amount for the project is Rs. 9.89 crore.

For the purpose of developing a pharma cluster at Alathur, the industrial units operating there had formed one Chennai Pharma Industrial Infrastructure Upgradation Company (CPIIUC), a special purpose vehicle (SPV), in 2004 as per the companies Act. According to the SPV, 70 per cent of the total expenditure will be met by the Central government. Remaining 30 per cent will have to be collected from the SPV members.

The CETP will benefit for 13 formulation companies operating from Alathur Pharma Estate. These units under the SPV approached government of India for financial assistance under cluster scheme. These formulation companies come under yellow category as per norms of the Pollution Control Board, said B Sethuraman, one of the directors of the SPV.

According to him, the effluent treatment plant will have the capacity to treat three lakh and seventy thousand litres of sewage and effluents per day. The facility will help reuse water from the plant for the industrial purpose. Currently, all the industrial units at the estate are bringing water from villages for daily operations as the area lacks water sources.

CPIIUC had sought for a financial aid of Rs. 9.89 crore from the DoP which sanctioned the total amount. In 2014, the State Small Industries Development Corporation (SIDCO) granted four acres of land for a long lease for establishing the pharma cluster.

In February this year, Supreme Court of India had passed a direction to all state pollution control boards that no industrial unit would allowed to work if they did not have functional effluent treatment plants. The direction was to curb the release of untreated waste water into water bodies.

Tamil Nadu contributes one sixth of the pharma production in the country, but the support to the industry by state government is very poor. Industrial sources said if proper support is given to the sector, it will become like the pharma sector in Gujarat. More than 450 pharma units are working in Chennai and Kancheepuram districts.