Maharashtra to clear way for new industrial cities run by public firms

The new industrial cities and regions proposed under the ambitious Delhi-Mumbai industrial corridor in Maharashtra will be set up as exclusive enclaves, out of the ambit of local authorities such as the existing municipal corporations, zilla parishads, gram panchayats as well as elections. A special purpose vehicle (SPV) will be created to develop each city.

The state government will amend the Maharashtra Regional Town Planning Act, 1966 to grant special planning authority status to these SPVs set up by the Delhi-Mumbai industrial corridor trust (DMIC) and the state’s nodal agency Maharashtra industrial development corporation (MIDC). This will ensure the industrial cities are set up with no hindrance from local authorities or existing laws.

To free up the areas from the control of the existing gram panchayat, municipality or corporation limits, the state will issue a notification under Article 243 Q of the Indian Constitution.

In phase I, two new industrial areas have been proposed – Dighi maritime city in Raigad and Shendre-Bidkin manufacturing hub in Aurangabad. The project spans 10 districts in the state, including Mumbai, Thane, Raigad, Aurangabad, Nasik, and covers 18% of the state, with 26% of the state’s population falling under its area of influence.

“This is to facilitate the creation of trunk infrastructure in the proposed industrial cities. The land will be acquired by MIDC and handed over to the SPV and the state government will provide adequate police cadre to maintain law and order. But otherwise, these areas will be controlled in perpetuity by the SPVs, headed by a government official,’’ said a senior industries department official.

The industries department government resolution issued this week has tasked various departments such as the rural development and urban development revenue department to start amending laws to grant special status to the SPVs. It also stated all development in these regions will be exempt from stamp duty, property tax etc. “The SPVs will be created to develop each industrial city or area and will have all the powers to decide land use, electricity distribution, right of way etc,” stated the government order, dated January 19.

The state cabinet had given its go-ahead to the state support agreement and the shareholding agreement between the DMIC Trust and the MIDC last year. Both the agreements lay down this procedure to plan new industrial cities. A joint committee between the SPV and the state government will be formed to iron out coordination issues. DMIC, through the SPV, will opt for transparent competitive bidding to develop the second-stage infrastructure of these cities.

The trunk infrastructure will be funded by the Centre, while the state government’s equity will be in the form of land acquired for the project.

It is learnt chief minister Devendra Fadnavis is keen to ensure both the cities are set up by the 2019 deadline set by the Centre

5 booster projects for the new government to kick-start the economy

Whatever be the political coalition that comes to power at the Centre after May 16, the new government will have five ongoing projects to kick-start a sluggish economy. These low-hanging fruits of labour of the two-term UPA government - the eastern and western Dedicated Freight Corridor (DFC) projects, the first phase of the Delhi-Mumbai Industrial Corridor (DMIC), Metro rail projects in nine cities, airport modernisation in six cities, including Chennai and Kolkata, and power projects that have signed fuel-supply agreements (FSAs) - are there for the new dispensation to pluck.

Here's a quick status check of these projects, which could help the economy beat the slowdown blues and earn brownie points for the new government

1 Dedicated Freight Corridor projects
With 94% of the land for the projects acquired, and all major statutory clearances in place, DFC is on the fast-track, backed by institutional finance from the World Bank (eastern corridor) and Japan International Cooperation Agency (western corridor). Civil contracts for 1,100 km were given out in 2013. Contracts for another 1,100 km, worth over Rs 7,000 crore, are expected to be awarded in 2014. Aimed at decongesting freight routes, this project involves setting up high-speed railway corridors with Rs 95,000-crore investmentsinvestments. It is slated for completion by FY18.

2 Delhi-Mumbai Industrial Corridor (Phase-I)
If things go as planned, the ambitious DMIC project - building manufacturing centres and townships along the 1,483-km Delhi-Mumbai freight corridor - will see two groundbreaking events in 2014. In the October-December quarter, global bids are likely to be awarded for creation of truck infrastructure at four project sites - industrial townships at Dholera (Gujarat), Vikram Udyogpuri (near Ujjain, Madhya Pradesh) and two multi-modal logistics hubs at Shendra (Maharashtra) and Greater Noida. The pre-engineering master plans for the four sites are expected to be finalised by June. This will be followed by a contractor outreach programme in July. The $90-billion project spread over eight states had to be ring-fenced from political challenges. According to Shinya Ejima, India representative of Japan International Cooperation Agency, which is funding the project, such sovereign-guaranteed projects aren't affected by change in governments at the state or Centre. But experts point out the government of the day could play a key role in accelerating the pace on the ground.

3 Metro rail projects (Mumbai, Delhi, Gurgaon, Bangalore, Hyderabad, Kolkata, Chennai, Kochi and Jaipur)
Metro rail projects under implementation in nine cities could be the cornerstone of any urban infrastructure development programme by the new government, says Rohit Inamdar, vice-president, Icra. Sector experts point out civil construction typically constitutes 35-50% of the project cost of a Metro system. Given the muted activity in other infrastructure sectors, construction companies have bid aggressively for work on superstructures and foundation work. A renewed thrust from the government will help improve cash flow for these companies and enhance economic activity on the ground.

4 Airport modernisation (Kolkata, Chennai, Lucknow, Ahmedabad, Guwahati, Jaipur)
The Airports Authority of India's ongoing airport modernisation programme for Kolkata and Chennai airports, at Rs 2,325 crore and Rs 2,015 crore, respectively, will be re-started only after a new government takes office. So will bids for the upgrade of airports at Guwahati, Jaipur, Ahmedabad and Lucknow, amid criticism over the drafting of the concession agreements. Several political parties and AAI employees had opposed the modernisation initiative through the public-private-partnership route. Experts expect the new Navi Mumbai airport development project to gather stream in 2014, following a global tender earlier this year. A tender for construction of the terminal building for an international airport at Kannur (Kerala) was floated in February. AAI has plans to build 50 low-cost airports, providing a boost to construction companies. With two new airlines from Tata group - AirAsia and Tata-SIA - expected to take to the skies in 2014, the new government will have its hands full when it comes to the aviation sector.

5 Power projects with FSAs in place
Over the previous 12 months, 150 fuel supply agreements were signed between Coal India and power plant promoters, creating capacity for generating 75,000 Mw by 2015. Experts point out many of these projects will start firing in 2014, creating employment and spurring growth momentum.

Dighi Port in talks with strategic, PE investors for port expansion

Mumbai: Dighi Port Ltd, which runs a port on the banks of Rajpuri creek in Maharashtra’s Raigad district, is in talks with private equity (PE) and strategic investors to raise about Rs.200 crore for the port’s expansion.

This will be aided by IL&FS Transportation Networks Ltd, an investor in Dighi Port, looking to acquire in the port company’s road connectivity project.
 
Mr Vishal V. Kalantri, Director, Dighi Port said Dighi Port has emerged as the largest port in Maharashtra. It handled more than four million tonnes of cargo in the last two years, and plans to invest about Rs.1,000 crore for developing the port, over and above the Rs. 1,800 crore already spent, Mr Kalantri added.

 “The promoters have already infused money in accordance with the restructuring plan. The firm will raise about Rs.200 crore from PE and strategic investors to fund the port’s expansion plans,” the sources said.

Dighi Port is in talks with leading port firms and PE firm Carlyle Group for fund-raising.
“IL&FS is actively participating in development of port, rail and road projects. The company (Dighi Port) has signed a memorandum of understanding with IL&FS Transportation Networks to develop rail and road network for optimum cargo evacuation,” Kalantri said, referring to the IL&FS unit picking up a stake in the port’s road connectivity project.

IL&FS Transportation Networks holds about 23% stake in Dighi Port. Dighi Port has been trying to raise funds the past two years.

“Now the pain points of the company are slowly getting over with the current debt restructuring. Once the port is connected well, there could be serious interest from several international port operators,” the consultant said, also requesting anonymity.

Dighi Port is the last and the largest node for the Delhi-Mumbai Industrial Corridor being jointly developed by the Governments of India and Japan, which could add to interest in the project.
The port area has been identified as one of the seven mega national investment and manufacturing zones under the Indian government’s new manufacturing policy.

While Dighi Port has been under financial pressure, the uniqueness of the port is likely to attract large investors.
 
Under the first phase of expansion, the port is developing five multipurpose berths and will offer an alongside depth of 14.5m.

“Two multipurpose berths having a single quay length of 650m (the longest such in Maharashtra) have been developed and are operational on the south bank. The north bank will offer three multipurpose berths having a total quay length of 1,100m,” Mr  Kalantri said

Cabinet approves state support, shareholder agreement for DMIC

Maharashtra cabinet today approved the state support and shareholder agreement for the 1483-km Delhi-Mumbai Industrial Corridor (DMIC), which will run through six states.

Addressing a press conference after the weekly cabinet meeting, Chief Minister Prithviraj Chavan said 18 per cent of the land (about 400 kms) in Maharashtra will come under the corridor.

Capital will be raised by the Centre while land acquisition will be done by the state government, he said.

Logistic parks, road tunnels, port connectivity were some of the activities that would be taken up under this ambitious project.

Shendra-Bidkin, Dighi, Igatpuri, Sinnar and Dhule-Nardana areas will be developed under DMIC.

In Shendra-Bidkin, 3,200 hectare land has been made available while in Dighi efforts are on for acquiring land.

In the first phase, projects worth Rs 71,451 crore have started, Chavan said.

Also Aurangabad-Nashik expressway, Karad-Sangameshwar tunnel, Shendra-Bidkin water supply scheme, exhibition centre at Shendra-Bidkin and logistics parks will be set up under this mega infrastructure project which aims to develop "smart cities".

The state government also plans to develop state corridors like Mumbai-Nagpur, Mumbai-Aurangabad, Mumbai-Solapur, he added.

The DMIC corridor spans across Maharashtra, Gujarat, Rajasthan, Madhya Pradesh, Haryana and Uttar Pradesh.

Mumbai-Bangalore corridor: A roadmap to boost India’s economic prosperity

The government's plan to boost the economic corridor from Mumbai to Bangalore is a great opportunity to connect India's two most globally relevant cities for business. It could create a highly-productive economic zone, similar to the Northeastern US or China's Hong Kong-Guangdong corridor. But to achieve the lofty goals it has set for itself, cities and regions of the corridor have to go beyond their traditional thinking around economic development and focus on the burgeoning entrepreneurial ventures and unique opportunities that exist in the region.

The government hopes to create 25 lakh jobs, and drive 12% of the country's GDP from the corridor. The estimated investment is about Rs3 crore by government and private investors.
And the infrastructure will include rail lines, a better national highway system, one million homes and manufacturing facilities.

I believe the government is grossly underestimating the impact of this corridor. It can create up to one crore jobs and have a sustainable, long-term impact on the Indian economy for two reasons. First, Mumbai and Bangalore continue to work with local community groups to implement smart growth strategies to ease their outward expansion and population growth. But we cannot call the corridor a success just because its two end points continue to grow and are better connected by infrastructure. It will come from development of the middle region — south Maharashtra and north/central Karnataka — as an economically vibrant, entrepreneurial region with quality schools, infrastructure and leadership.

Economic development strategies in the US have moved beyond hard infrastructure to focus on soft infrastructure: people, capital and opportunity.

The US built infrastructure in a similar way and it had the intended effect of connecting the country and boosting economic fortunes of the southern and western US. However, while the cities of the East and West Coasts of the US are driving the global economy, the rest of the country struggles to adjust to globalisation. So, now our strategies are focused on building their ability to innovate, become entrepreneurial and compete in a global economy. India faces similar challenges in the Mumbai-Bangalore corridor.

Fortunately, this unique region has some underutilised assets that can be leveraged. Foremost, there has been a deep philanthropic commitment to the region. North Karnataka has been the recipient of philanthropic support for entrepreneurship, education and innovation from the Deshpande Foundation, the Infosys Foundation, Nandan and Rohini Nilekani, the Tata Trusts and the Gates Foundation. Philanthropic leaders as Sudha Murthy hail from the region and are committed to its economic development. They are investing resources to train entrepreneurs, build the capacity of NGOs and local government to provide better services, and educate young people to join the global economy.

Secondly, the region has a large network of colleges and universities that churns out quality graduates, who are currently finding opportunities in Mumbai and Bangalore.

This provides an opportunity for Indian companies looking at tier-II cities to set up facilities, and for entrepreneurs looking for a low-cost alternative to Bangalore and Mumbai.

Thirdly, the region is home to tourist attractions, including the ruins at Hampi and the Western Ghats. Any plan to develop this corridor should have a focus on global tourism.

Finally, cities in the corridor such as Hubli, Dharwad and Belgaum have tremendous connectivity potential. Goa, Pune and Hyderabad are all within proximity.

Japan offers $1.5 bn aid for DMIC project

New Delhi  December 15, 2013


The special term loan include certain conditions such as preference to a Japanese company for goods, services and consulting contracts.

The Japanese government has offered a special loan of $1.5 billion for Delhi-Mumbai Industrial Corridor (DMIC) project for a period of 40 years.

"Government of Japan has offered a special facility of $1.5 billion official development assistance (ODA) for DMICDC projects over and above the regular ODA," Minister of State for Finance Namo Narain Meena has informed Parliament.

The special term loan by the Japanese government include certain conditions such as preference to a Japanese company for goods, services and consulting contracts.

Also, as per the conditions, not less than 30 per cent of the total prices of contracts (excluding consulting services) shall be accounted for by either goods from Japan and services provided by a Japanese company or goods from Japan only, depending on the nature of the project.

"Four projects of DMICDC having a project cost of Rs 6,459.37 crore (about $1.04 billion) have already been included in the Special Rolling Plan for the $1.5 billion ODA facility and shared with government of Japan," the Minister has said in a written reply to Lok Sabha.

The government of Japan offers both untied and tied loans under its ODA.

DMIDC is a Dedicated Freight Corridor between Delhi and Mumbai, covering an overall length of 1,483 kilometre and passing through the states of Uttar Pradesh, National Capital Region (NCR) of Delhi; Haryana, Rajasthan, Gujarat and Maharashtra, with end terminals at Dadri in the NCR of Delhi and Jawaharlal Nehru Port near Mumbai.

This Dedicated Freight Corridor offers high-speed connectivity for high axle load wagons (25 tonne) of double stacked container trains supported by high power locomotives.

MEMORANDUM OF UNDERSTANDING (MOU) SIGNED BETWEEN DIGHI PORT LIMITED AND PORT OF FERROL, SPAIN.

December 12, 2013
 
Dighi Port Limited has signed a Memorandum of Understanding (MoU) with the Spanish Port of Ferrol in Mumbai on 27th November 2013. The MoU enables sharing of technical know-how and expertise between the two port developers. Dighi Port Limited will now collaborate with the Spanish port to explore joint business opportunities between the two ports along with other areas of trade, shipping, railway and support infrastructure across India and Europe.
 
The Memorandum of Understanding (MoU) was signed by Mr. Vijay Kalantri (Chairman & Managing Director – Dighi Port Limited) and Mr. Jose Manuel Vilarino Anca (President Autridad Port de Ferrol). Earlier in the day, the team from Port of Ferrol along with few other delegates from various industries of Spain as well as a senior delegate from the Spanish Chamber of Commerce visited Dighi Port and was very impressed with the development work and the potential that the port has to offer.

This is the second Memorandum of Understanding that Dighi Port Limited has entered into with a European Port. Dighi Port Limited has also signed a similar Memorandum of Understanding (MoU) with Port of Venice.

Dighi Port is being developed by Balaji Infra Projects Ltd (BIPL) and is the first and the largest Greenfield port of Maharashtra. It is being developed as a multipurpose, multi-cargo, all-weather port with deep draught, direct berthing facilities and modern cargo handling equipments with adequate stack yards and warehousing facilities, back up areas with an ample land bank of approximately 1600 acres.

The port is located on the banks of the Rajpuri Creek, in the Raigad District of Maharashtra.  It is at a distance of 42 nautical miles (NM) from Mumbai Port and 170kms south of Mumbai by road.
The port is being developed on the 2 banks of the Rajpuri Creek. The South Bank will have 2 berths offering a total quay length of 650m and will be used for handling all dry bulk, break-bulk, liquid cargo. The 3 berths on the north bank are under construction and will offer a total quay length of 1100m will be used for handling containers and all other clean cargo. The port has commenced operations on the first berth and has been regularly handling export as well as import cargo in the form of Bauxite and Steel and has handled approximately 4 million MTs of cargo till date.
Dighi Port is also part of the prestigious Delhi Mumbai Industrial Corridor (DMIC) and the Dighi Port area has been included in the Government of India’s new Manufacturing Policy as one of the 7 mega manufacturing as a National Investment and Manufacturing Zone (NIMZ).