Kalyan could be next big business hub by 2028

B y 2028, or 13 years hence, the rapidly developing suburb of Kalyan could be transformed into a business and cultural hub and a self-sufficient township, according to a plan submitted to the city’s development authority by the South Korean government.

A South Korean government think-tank under its Ministry of Land, Infrastructure and Transport, which has suggested the creation of five growth centres in the outer Mumbai region, has recommended developing Kalyan as the first priority keeping in mind its accessibility and growth potential. 

The other four centres recommended are 

Vasai-Virar, 

Bhiwandi, 

Greater Panvel and 

Pen-Alibaug.

Based on its experience in development of new districts around its capital Seoul, it has outlined a concept plan for a Kalyan growth centre, which could be completed by 2028 with an investment of Rs 56,676. 2 crore.

U P S Madan, metropolitan commissioner at the Mumbai Metropolitan Region Development Authority, said, “The concept of creating such cities in these countries is very different from ours. There a lot of infrastructure that is first put in place by the government and then the private sector follows. However, here it looks too huge an amount to spend upfront and expect returns over a longer period of time. In that sense, it doesn’t seem to be workable. A step-by-step approach is one option. We have asked them to give a more detailed implementation plan. The team will be visiting again on December 3.”

According to the report, the growth centre in Kalyan is proposed to be created across 27 villages – 19 in Kalyan and 8 in Ambernath – for which the MMRDA is already the special planning authority. The total area would be 1,077 hectares for a planned residential population of 2,91,000 people.

The area is expected to be well connected with the existing Mumbai-Kalyan radial, the Central railway line, the proposed Virar-Alibaug Multi Modal Corridor, and two state highways. The MMRDA has also been studying the possibility of setting up a mass transit corridor connecting Thane-Bhiwandi-Kalyan.

The growth centre will be a smart city with all urban infrastructure services like private and public offices, museums, theatres, colleges, shopping malls, business hotels, convention centres, health centres, markets, libraries and so on.

Sanjay Dutt, a member of the state’s Legislative Council and a Congress leader from Kalyan West, said, “Kalyan has fallen prey to haphazard unauthorised development due to delays in implementation of infrastructure development and the notification of a development plan for these 27 villages. If the government wants to seriously act on this report and develop Kalyan as a growth centre, the basic infrastructure has to be put in place first. 

Currently, Thane has a system of basic infrastructure developed with residences, commercial areas, good roads and connectivity, but Kalyan doesn’t even have that. Secondly, the government will have to fast-track plans for a mass transit corridor connecting Kalyan and actually take it beyond to areas like Ambernath and Titwala. Also, a development plan needs to be put in place at the earliest to stop illegal constructions.”

According to the report, the region is proposed to have 67,686 houses to accommodate a population of 291,077 people. The think-tank has recommended phasing out the implementation between 2015 and 2028, with the first phase to be developed in areas around major road corridors such as the proposed Virar-Alibaug Multi Modal Corridor and state highways. The second phase will include areas along a monorail line and the third phase to develop the remaining area. The think-tank suggests either public acquisition or land pooling as the means to make the project feasible. “It is still too early to talk about financial models. 

We will need to discuss with the state government and get its views on this proposal for the growth centres,” Madan said. Under public acquisition, the government will have to spend Rs 35,062 crore on land acquisition according to the new regulation and Rs 10,518.6 crore as compensation to the project-affected. Considering all other costs, the project is estimated to cost Rs 56,676.20 crore, excluding the regional transport infrastructure such as the main highway, monorail or the Multi Modal Corridor. Under the land pooling option, assuming a 10 per cent public ownership before pooling, the plan envisages returning 53.2 per cent of land to the owners and using 41.4 per cent for public facilities such as parks, recreational spaces, roads and other facilities. About 5.4 per cent could be reserved for sale, which would help the government break even. This model is likely to require a total investment of Rs 2980.50 crore.

India Allows 100% Foreign Direct Investment In Construction

NEW DELHI – In what may prove to be a major boost for Indian economy, the Union Government today decided to relax foreign direct investment (FDI) norms in the construction sector, allowing 100 per cent of foreign funds in building projects.

The approval came at a Cabinet meeting, which was chaired by Prime Minister Narendra Modi, where the existing FDI policy on the “Construction Development Sector” was amended in line with the announcement made as part of the Union Budget earlier this year.

After the meeting, the government said “100 per cent FDI under automatic route will be permitted in the construction development sector”. The Cabinet also cleared the proposal of the Department of Industrial Policy and Promotion (DIPP), under the Commerce and Industry Ministry, to bring down the minimum built-up area requirement for FDI in construction projects from 50,000 sq metres to 20,000 sq metres.

The Cabinet further gave its approval for reducing the minimum capital requirement for projects from $10 million to $5 million.

An official statement said: “The investee company will be required to bring minimum FDI of $5 million within six months of commencement of the project. The commencement of the project will be the date of approval of the building/layout plan by the relevant statutory authority. Subsequent tranches of the FDI can be brought till the period of 10 years from the commencement of the project or before the completion of the project, whichever expires earlier.”

The government, however, clarified that the FDI was not permitted in any entity that was engaged or proposes to engage in real estate business, construction of farmhouses and trading in Transferable Development Rights (TDRs).

The move was aimed at attracting more foreign investment in construction and real estate sector as investment in the construction development sector has a multiplier effect on the economy by way of infrastructure creation; substantial employment generation over the entire spectrum from unskilled workers to engineers, architects, designers as well as financial and other supporting services.

Further, it creates demand for the products of a number of related industries, including those in the manufacturing sector such as cement, steel, fittings and fixtures and others.

Officials said besides generating employment and income generation potential, greater investment in the sector would help augment the available housing stock, including affordable housing and built-up infrastructure for different purposes.

Enhancement of the affordable housing stock is an urgent need in order to stem the proliferation of slums in and around the cities. The sector witnessed steadily rising FDI from 2006-07 to 2009-10 after which the levels of inflows have been much lower. Between April 2000 and August 2014, construction development, including townships, housing and built-up infrastructure in the country, received FDI worth $23.75 billion or 10 per cent of the total FDI attracted by India during the period.

Although 100 per cent foreign direct investment is allowed in townships, housing and built-up infrastructure and construction developments, the government has imposed conditions.

Finance Minister Arun Jaitley in his maiden Budget had said projects which commit at least 30% of the total project cost for low cost affordable housing would be exempted from minimum built-up area and capitalisation requirements.

FDI in realty, tax sops for REITs to boost housing segment

New Delhi: In a slew of measures to boost slowdown hit real estate sector, the government on Thursday relaxed FDI rules, gave incentive on home loans, offered tax sops on investment trusts and provided Rs 7,060 crore for the development of 100 smart cities.

Finance Minister Arun Jaitley in his Budget 2014-15 also increased the allocation of Rural Housing Fund, run by National Housing Bank (NHB), to Rs 8,000 crore in this fiscal. Another Rs 4,000 has been earmarked for NHB to increase the flow of cheaper credit for affordable housing for urban poor.

"Our government is committed to endeavour to have housing for all by 2022. For this purpose, I intend to extend additional tax incentive on home loans to encourage people, especially the young, to own houses," Jaitley said.

Stating that housing continues to be an area of concern for middle-lower middle class due to high cost of financing, Jaitley said: "To reduce this burden, I propose to increase the deduction limit on account of interest on loan in respect of self occupied house property from Rs 1.5 lakh to Rs 2 lakh".

To deal with the problem of migration of people from rural to urban cities, Jaitley proposed development of 100 'Smart Cities' as satellite towns of larger cities and by modernising the existing mid-sized cities.

A sum of Rs 7,060 crore has been provided in this fiscal for this purpose.

For encouraging development of Smart Cities, the finance minister has relaxed the FDI norms.

The requirement of the built up area and capital conditions for FDI is being reduced from 50,000 sq metres to 20,000 sq metres and from USD 10 million to USD 5 million respectively with a three year post completion lock in.

To further encourage this, projects which commit at least 30 per cent of the total project cost for low cost affordable housing will be exempted from minimum built up area and capitalisation requirements, with condition of 3 year lock-in.

In a major fillip to the commercial realty, Jaitley announced tax sops for Real Estate Investment Trusts (REITs).

"REITS have been successfully used as instruments for pooling of investment in several countries. I intend to provide necessary incentives for REITS which will have pass through for the purpose of taxation," he said.

Industry players hailed the Budget saying these measures will help boost affordable housing as well as improve investment flows.

Market regulator Sebi had proposed draft regulations relating to REITs that has been placed in public domain for comments. Final norms are yet to be notified.

REITs would reduce the pressure on the banking system while also making available fresh equity, Jaitley said, adding that the instrument would attract long term finance from foreign and domestic sources including the NRIs.

Noting that Rural Housing Scheme has benefited a large percentage of rural population who have availed credit through Rural Housing Fund (RHF), Jaitley proposed increasing the allocations to Rs 8,000 crore for NHB.

He proposed setting up a mission on low-cost affordable housing which will be anchored by NHB. The schemes will incentivise the development of low cost affordable housing.

Finance Minister allocated Rs 4,000 crores for NHB in this fiscal with a view to increase the flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment.

Jaitley proposed to add inclusion of slum development in the list of Corporate Social Responsibility (CSR) activities to encourage the private sector to contribute more towards this activity. He said the government is willing to examine other suggestions that would spur growth in the housing sector.

DIPP pushes for 11-fold hike in FY15 budget for Delhi-Mumbai Industrial Corridor

In what could give a big push to urbanisation and infrastructure creation, two of the BJP’s chief electoral promises, the Narendra Modi government may increase this fiscal’s budget outlay for the prestigious Delhi-Mumbai Industrial Corridor (DMIC) manifold.

Dissatisfied with the 2014-15 interim budget estimate of just R693 crore for DMIC, the Department of Industrial Policy and Promotion (DIPP) has urged the finance ministry to raise the outlay to R7,478 crore in the forthcoming regular Budget to develop trunk infrastructure for the five smart industrial cities and six other projects planned in the initial phase of the mega public-private partnership project.

The DIPP is the nodal body for the DMIC project, principally an India-Japan venture. It is expected to generate investments of up to $90 billion.

The five cities include
Ahmedabad-Dholera Special Investment Region (SIR) in Gujarat
Shendra-Bidkin Industrial Park city near Aurangabad in Maharashtra
Global City in Gurgaon in Haryana
Integrated Industrial Township in Greater Noida
Integrated Industrial Township Vikram Udyogpuri near Ujjain in Madhya Pradesh

Official sources told FE. They said the required land for these cities has already been acquired. 
 
Interim budget 2014-15 had allocated R693 crore to the DMIC Project Implementation Trust (the nodal body for the project’s funding). This included R643 crore as grants

to the trust and R50 crore for an exhibition-cum convention centre in New Delhi as part of the project. In 2012-13, the actual plan allocation for the trust was R411.4 crore. The 2013-14 Budget had a plan allocation of R507.8 crore to the trust


The revised plan allocation to the trust in 2013-14 was Rs 303.81 crore.
Of the Rs 7,478 crore now being sought for this fiscal, Rs 3,000 crore each is to be used for development of the first phase of the Shendra-Bidkin Industrial Park and “activation area” in the Ahmedabad-Dholera SIR, the sources said. In the ‘activation area’, the plan is to build state-of-the-art infrastructure to “activate local commerce, enhance foreign investments and attain sustainable development”, they added.

Around Rs 750 crore has been sought for the Global City in Gurgaon, while Rs 617 crore will be needed for the development of Integrated Industrial Township in Greater Noida and Rs 59.5 crore for the Madhya Pradesh Vikramaditya Knowledge City, part of the project planned in Ujjain.
Elaborating on the plans, the sources said leveraging the Rs 617 crore meant for the Greater Noida township alone is estimated to help get funding of up to Rs 33,000 crore, adding that similarly the total outlay sought of Rs 7,478 crore can be leveraged to get huge finances for the townships envisaged, leading to massive employment.


The DMIC Trust, which manages the funds, already has with it Rs 621 crore, the sources said, adding that an additional Rs 7,478 crore is needed to meet the total funding requirement of Rs 8,099 crore to create the trunk infrastructure projects for a total of 11 projects including the five townships being built in the current phase of DMIC.

The six projects additional to the townships to benefit from the proposed budget outlay are:

Integrated Multi-Modal Logistic Hub (IMLH) in Rewari (Haryana) (Rs 450-crore)
Development of DMIC Development Corporation’s Neemrana Solar Power in Rajasthan (Rs 22.3-crore)
Pithampur Jal Prabandhan in Madhya Pradesh (Rs 21-crore)
Logistic Data Bank (Rs 37.2-crore)
Rail line between Bhimnath and Dholera (Rs 24-crore)
Desalination water project at Dahej in Gujarat (Rs 117-crore)


India and Japan had agreed on a $9-billion fund with equal contribution from both sides as initial investment in DMIC. The Indian government’s contribution is in the form of budgetary grant, while Japan is to give a combination of untied loans in the form of official development assistance and tied aid through special terms of economic partnership (STEP) loans.

The Japanese government, in a bid to expedite the DMIC project, is learnt to have agreed to relax the conditions for its STEP loan following the finance ministry’s concerns that the clause specifying that 30% of goods and services for DMIC projects should be from Japanese companies would result in bids being not competitive. To ensure more non-Japanese firms bid for the project, it may be specified that 30% of goods and services could also be sourced from joint ventures in India in which Japanese companies have a shareholding of 10% or more.

The DMIC is to come up on both sides of the Western Dedicated Freight Corridor. It will pass through six states — Rajasthan, Gujarat, Maharashtra, Haryana, Uttar Pradesh and Madhya Pradesh.

The corridor’s development is expected to better the lives of around 180 million people including the creation of skilled workforce and generation of gainful employment to them, besides boosting manufacturing, revenues and growth. The DMIC project is a crucial link to the National Manufacturing Policy that aims to increase the share of manufacturing in the GDP to
help get funding of up to Rs 33,000 crore, adding that similarly the total outlay sought of Rs 7,478 crore can be leveraged to get huge finances for the townships envisaged, leading to massive employment.

Delhi-Mumbai Industrial Corridor (DMIC) Boost for Indian Real Estate & Mumbai,Bangalore Realty

Delhi-Mumbai Industrial Corridor (DMIC) Boost for Indian Real Estate & Mumbai,Bangalore Realty

India tops the number of foreign investors and investment transactions in Dubai's real estate market

DUBAI: International Property Show (IPS) beginning here this week will have a large Indian participation under the umbrella of the National Real Estate Development Council (NAREDCO), a leading real estate body in India.

The three-day event, starting on April 8, will see India reinforce its stature not only as one of the leading investors in the Dubai realty market, but also as a country that offers diverse realty offerings to investors based in the Middle East, organisers of the show said.

India tops the number of foreign investors and investment transactions in Dubai's real estate market, according to a statement released here.

Quoting figures from the Dubai Land Department (DLD), it said that more than 8,092 investors from India invested in Dubai real estate during 2013, surpassing all foreigner investors in the Emirate's property sector.

NAREDCO, a leading real estate body which works under the aegis of Ministry of Housing & Urban Poverty Alleviation (MHUPA) in India, has announced that the Indian pavilion will include properties from developers in Mumbai, Delhi, Bangalore, Goa, Noida and Gurgaon.

"Indian investors are very active in Dubai property sector. Investing nearly USD 4.9 billion in Dubai reflects the huge interest from Indian investors in the Dubai market and their confidence in the lucrative returns.

"It is obvious that the Gulf region has presented itself as a key investments player in the world. The well developed infrastructure and strategic location of Dubai will drive this sector to greater success," said Sultan Butti Bin Mejren, Director General of the Dubai Land Department.

Pointing out that for Indians in the Gulf, investing in India is a "sentimental decision" as it is driven by a need to remain connected to their roots, President NAREDCO Sunil Mantri said investment in properties in India would be a lucrative Investment option at a time when the GDP has improved and inflation has moderated.

"With definitive pick up in the economy, as the GDP has improved, inflation has moderated, growth in industrial production is seen with other positive triggers, that has driven the stock markets to the current levels, investment in properties in India would be an lucrative Investment option," he said.

International Property Show was first organised in 2001, and has since grown to become Middle East's foremost property marketplace to meet and to do business with top-tier investors and property professionals from across the globe.

India’s foreign policy agenda 2014

As India gears up for the 2014 parliamentary elections, Gateway House recommends a priority economic agenda for the next government – an agenda which puts economics at the heart of our foreign policy
 
Among the many priorities of the new government in Delhi is setting a new Foreign Policy agenda for India – an urgent initiative that can help revive our economy and place us at a geopolitical advantage in a world that has changed almost beyond recognition over the last five years.

Foreign policy as an instrument for benefit has lain almost unused since 2008, when the India-U.S. Civil Nuclear Cooperation was signed, and right through the massive upheavals and peoples’ movements from Brazil to Bahrain and Ukraine. Its management has also been lax, judging from the neglect of our neighbourhood, the Chinese incursions and the Khobragade affair.

How then, can India gain ground most immediately, and in the next five years? By actively pursuing economic diplomacy.

Gateway House recommends a priority economic agenda, comprising external and internal strategic spheres, in which the various tools of our foreign policy – our diplomatic corps, our business, our media and our diaspora – are pressed into optimum service. The Corridors of Development and the Circles of Influence accommodate non-alignment, multi-alignment, mis-alignment, and all that is in between. The key difference from past policy is to use economics to resolve issues, be ambitious and ratchet up activity levels.

Internally, we must attract foreign and domestic investment in the development of corridors of activity – industrial, riverine and coastal. Externally, we must build circles of economic influence – first in our neighbourhood, then in the Indian Ocean and with ASEAN, further out to include the BRICS grouping, and separately, build strong ties with the U.S., Japan and Taiwan by jointly developing new technologies.

There are four Circles of Economic Influence:

1. South Asia: Critical in importance as the U.S. troops withdraw from Afghanistan, and extremist elements in Pakistan activate. We must protect our existing $2 billion of assets in Afghanistan, and press Pakistan to include India in the Afghanistan-Pakistan Transit Trade Agreement which will open up trade with our western neighbour especially through the respective private sectors. To our east, we must develop the border posts with Myanmar, enhancing trade with that country and our north eastern states.

2. ASEAN: Deepening trade linkages with this prosperous region is critical for Indian business, which already has billions invested in ASEAN nations. In 2014, we must work on simplifying and codifying the web of bilateral FTAs and PTAs already signed with several ASEAN countries, as a precursor to a business take-off.

3. BRICS: Creating a full-fledged alternate financial architecture within the BRICS to counter the western-dominated structures that have the ability to strangle our economies by the imposition of sanctions. Already a BRICS Development Bank is being created. India can also lead the intellectual effort for an alternate framework for pricing commodities, trading in non-dollar currencies and providing insurance for maritime trade.

4. Indian Ocean Region:  The new geo-strategic playground for great and emerging powers is now the Indian Ocean – stretching from the Malacca Straits in the east to the Bay of Bengal and the Arabian Sea in the west. This is where China is executing its string of pearls strategy – critical for its trade routes and access to natural resources. India must strengthen its own ports to accelerate trade, and deepen its cooperation on disaster management planning and patrolling, already in place with the U.S., Japan and Australia. Indian public sector investment in Africa, especially in natural resources, is picking up, but so should popular government programmes like Indian Technical and Economic Cooperation (ITEC), which are currently quite small.

Within India, we must accelerate and expand the buildout of the Corridors of Economic Development, productively activating existing FDI and attracting new foreign investments.
These are our versions of China’s Special Economic Zones, which accommodate the compulsions of our diverse democracy where major issues like land acquisition and securing of resources like power and minerals are not controlled by the state alone. Local cooperation and consent is essential.
The first corridor was initiated by Japan to create a conducive environment for the small and medium enterprises which support the major Japanese companies. The resultant Delhi-Mumbai Industrial Corridor has now become the template for similar corridors across India.

Gateway House recommends five major corridors, each of which partner with a country with appropriate experience, and investment and financing expertise, through the deadline-driven build-out.

The Corridors are five:

Delhi-Mumbai Industrial Corridor (with Japan), Seven Sisters Corridor of the North East, Bangalore-Mumbai Economic Corridor (with the UK), Amritsar-Kolkata Rail and Riverine corridor (Gangetic Corridor) and East Coast Corridor, from Kolkata to Tuticorin
1. The Delhi-Mumbai Industrial Corridor: The pioneering, $90 billion, 10-year industrial corridor developed jointly between India and Japan, has run into the usual hurdles of land acquisition and financing. We recommend fasttracking the recently signed Phase I of the Maharashtra section of the corridor (building out Aurangabad and Karnad as part of the Shendra Bidkin Industrial City – the Maharashtra Government signed the relevant agreements for it in early March) for this year, accelerating the rollout and making it the template for foreign investors looking for meaningful projects in India.

2. The Seven Sisters Corridor, connecting the capitals of north east India to Myanmar and Thailand, and developing agri-business and resources along the corridor. The project partner can be Thailand, which has expertise in both construction and the food industry, and has direct access to ASEAN.

3. Bengaluru-Mumbai Economic Corridor: Inspired by DMIC, in 2013 the UK government proposed to link India’s financial centre of Mumbai with its IT capital, Bengaluru. En route, will be new urban centres and new transport links. The new government can activate this by immediately signing the agreement and assigning the feasibility study this year.
4. The Gangetic Corridor (Amritsar-Delhi-Kolkata Industrial Corridor): A three-year old, Rs.100 crore government plan is already in place to build a rail freight corridor from Amritsar to Kolkata. The Agreement was signed on January 20 this year. Gateway House recommends adding a riverine freight corridor along the Ganges, helping to develop agri-business along the fertile plain. For the rail corridor, we recommend partnering with China for building a high-speed railway network, and with Germany for a riverine transport. In 2014, the new government can assign and begin the feasibility study and identify foreign partners for the project.

5. The East Coast Corridor: With the Bay of Bengal in strategic play and Myanmar opening up for business, India will do well to develop a coastal corridor of ports along our eastern coast from Kolkata to Tutikorin. Existing ports must first be upgraded, and later, new ones can be built. The ideal partner can be Korea, with its huge ship-building capacity and experience, and its efficient ports like Busan. Gateway House recommends empowering the Port Authority of India to create the blueprint for such a coastal corridor, with inputs from the Indian Navy which is already securing the Bay.

In addition to these, Gateway House recommends two more corridors, to secure two critical bilaterals. An India-U.S. Technology Corridor, will help rebuild the bridges from Bengaluru to Silicon Valley through a robust private-sector engagement. Already, Indian IT firms are plugged into the guts of U.S. corporations – enhancing this will correct the imbalance created by soured government-to-government relations. A second technology corridor to our east will marry the software prowess of India with the hardware manufacturing of Taiwan – an ideal partnership that can create creative, affordable products and services for emerging as also developed markets – and send a signal to China.

Developing these Corridors and Circles will help revive the Indian economy and entrepreneurship. The sinews of this strategy will come from expanding the lending of our Exim Bank from the current $10 billion to $30 billion and augmenting the talent of the  Indian Foreign Service with a commercial corp drawn from the public and private sector, with its vast foreign experience and expertise in challenging conditions.

India seeks Qatar investment for industrial corridor

MoS (commerce) E.M.S. Natchiappan lists Amritsar-Kolkata, Kochi-Chennai and Kolkata-Chennai corridors as investment avenues for Qatar 

 

New Delhi : India on Tuesday urged cash-rich Qatar to invest in India’s flagship $90 billion Delhi-Mumbai industrial corridor and other similar projects in the country. 

 

Speaking at an event organized by Confederation of Indian Industry (CII) in New Delhi, minister of state for commerce E.M.S. Natchiappan listed the Amritsar-Kolkata corridor, the proposed Kochi-Chennai and Kolkata-Chennai corridors as projects that could be attractive investment opportunities for Qatar. 

 

“For all these we will need huge investment,” the minister said. 

 

According to Indian officials, India has handed over a list of projects, specially in the oil and gas sector for possible investment to the Qatari side. They, however, declined to give further details. “We have sought investment in this area. Let’s see how the talks progress,” one of the officials said.

India is looking at attracting up to $1 trillion in investments from countries with surplus funds like Qatar and Saudi Arabia into various areas of infrastructure such as roads, ports and railways between 2012 and 2017.

 

Smart City Technology Investment in Asia Pacific to Total $63 Billion from 2014 through 2023, Forecasts Navigant Research

Smart city innovations are critical to meeting the challenges of rapid urbanization and driving national competitiveness, report finds

BOULDER, Colo. — The list of problems facing contemporary city dwellers and officials in Asia Pacific includes rapid urbanization, stressed city finances, inadequate infrastructure, rising energy costs, congested transportation, climate change, and competition for global investment and skilled labor, all of which place unprecedented demands on cities. Emerging intelligent systems, however, promise solutions, and cities across the region are starting to implement them. According to a new report from Navigant Research, cumulative investment in smart city technology in Asia Pacific will total $63.4 billion during the period from 2014 to 2023.

“Asia Pacific is home to most of the world’s largest and fastest-growing urban areas, and smart city technology is becoming a crucial element of their future development,” says Eric Woods, research director with Navigant Research. “Working with an evolving mix of international and regional smart city technology firms, governments in the region are piloting a variety of technologies to solve urban problems, reduce urban energy and resource use, and prepare for future growth.”
 
With its large number of densely populated megacities and rapidly growing economies, the Asia Pacific region is a primary driver of global urban development trends. It is also the home of some of the most ambitious attempts to direct and channel those trends to national development goals, such as India’s immense Delhi-Mumbai Industrial Corridor, China’s 104 nationally selected smart city demonstration projects, and South Korea’s pioneering Songdo smart city development. According to the report, these will form the laboratories for future smart city development worldwide.

The report, “Smart Cities: Asia Pacific”, provides an overview of the Asia Pacific market for smart city solutions at a crucial point in development. The study examines the demand drivers, policies, implementation challenges, and technology issues related to smart cities in Asia Pacific. Market size projections, segmented by region (Australia/New Zealand, Greater China, India, Japan, Southeast Asia, and South Korea) and sector (smart energy, smart transportation, smart water, smart buildings, and smart government), extend through 2023. The report also provides a comprehensive assessment of smart city initiatives in Asia Pacific and profiles the key industry players in the region.

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

MTHL (Mumbai Trans Harbour Link) gets moving again, all hopes on Japanese loan

The stalled Mumbai Trans Harbour Link project is beginning to gain momentum once again, with the city’s development authority expecting the Japan International Cooperation Agency to formally sanction a loan for the Rs 9,630-crore project during its project appraisal cycle in September.

Ashwini Bhide, additional metropolitan commissioner at Mumbai Metropolitan Region Development Authority (MMRDA), said the state government had sent a formal proposal to the Union Finance Ministry’s department of economic affairs for its approval to get funds from JICA.

“JICA loan sanctions are done two times a year, either in April or September. We are targeting this September for the loan to be formally sanctioned,” Bhide said.

“We are expecting a loan of between 60 and 80 percent of the project cost from JICA. If the loan is on the higher side, the tolling period and the toll can be lesser,” she said.

Bhide added that as per procedure, there should be a nominating ministry in order to apply for the loan. The documentation to appoint the Union Ministry of Road Transport and Highways as the nominating ministry was under way, she said.

However, even if JICA sanctions the loan in September, work on the project, which has been on the drawing board for more than three decades now, may not start until at least a year, Bhide said.
As per the original plan, construction of the 22-km Worli-Sewri link was to start late last year or early this year on public-private partnership (PPP) model. There were six international consortia that had responded to the MMRDA’s request for qualification and five were shortlisted for bidding. However, not a single company responded to the development authority’s request for proposals despite several deadline extensions in what was the third failed round of tendering out the project.

In August last year, the MMRDA decided to scrap the PPP model for the project and execute it instead on a cash-contract basis. Subsequently, JICA expressed interest in providing funds for the project.

The Japanese agency has sanctioned a loan for one other Mumbai project – the fully-underground Colaba-Bandra-Seepz Metro. JICA is providing a loan at an interest rate of 1.4 percent to fund 57.2 percent of the total project cost of Rs 23,136 crore

Cabinet approves Amritsar-Kolkata Industrial Corridor project

The government today approved the Amritsar-Kolkata Industrial Corridor (AKIC) project, which seeks to boost the manufacturing sector in the country.

The project was proposed to be developed in a band of 150- 200 km on either side of Eastern Dedicated Freight Corridor in a phased manner.

The project is the second of its kind on the lines of the Delhi-Mumbai Industrial Corridor. It will be spread across 20 cities in seven states -- Punjab, Haryana, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand and West Bengal.

A financial indicative commitment of about Rs 5,600 crore, spread over 15 years, by way of budgetary support from the central government has been estimated in the first pilot phase for setting up seven IMCs in the AKIC, it said.

"Phase-1 will be in the nature of a pilot project, during which at least one Integrated Manufacturing Cluster (IMC) of 10 square km each, in each of the seven states would be set up, as identified by state governments," an official statement said, adding, the Cabinet also approved setting up of AKIC Development Corporation (AKICDC).

The states would however, it said, be free to set up more than one IMC, if they choose to do so.

"Uttarakhand, being a hill state would be given flexibility with regard to the size of the cluster. Both brownfield as well as greenfield IMCs can be set up," it said.

About 40 per cent of the land in each cluster will be permanently earmarked for manufacturing and agro-processing, considering that substantial part of the area in these states, except Jharkhand, is under agriculture.

The clusters envisaged under the project would be entitled to all the benefits available under the National Manufacturing Policy (NMP) 2011.

It also said that for infrastructure development, a PPP mode would be encouraged.

"While viability gap funding would be available for infrastructure amenable to PPP, trunk infrastructure not amenable to PPP will be developed through grant-in-aid from the central government," the statement said.

Further, the government will provide interest subsidy to states for land acquisition, grant-in-aid for project development and master planning of clusters, set up AKICDC, provide external connectivity and all benefits under NMP.

The Cabinet also approved that AKICDC will be set up immediately with a total equity base of Rs 100 crore, with 49 per cent stake of the central government, with balance equity to be taken by stakeholder state Governments as per option and willingness, and HUDCO.

The central government will also provide Rs 100 crore as project development fund to AKICDC.

Clearances major challenge for large infra projects: DMIC

Taking approvals for the private sector is quite a nightmare.

Amitabh Kant CEO & MD DMIC

He is hopeful that this infrastructure programme will bring a paradigm shift in India’s infrastructure development and process of urbanisation.

However, he adds that there is need for large industrial projects to be well-structured and the government should obtain requisite approvals for big ticket projects before bidding them. Speaking to CNBC-TV18, Kant said, by May 2014, two large townships and two multi- modal axles are likely to begin by May.

Below is the edited transcript of Amitabh Kant’s interview with CNBC-TV18

Q: How much of the industrial corridor investments have been tendered at all?

A: In Delhi Mumbai Industrial Corridor Development Corporation, one of the key lessons is that projects must be well structured. When we put out the projects into bidding all approvals must be in place before any bidding is done. We must clearly understand that the DMIC is about making completely new Greenfield cities in India and Greenfield cities require very detailed planning. These plans need to be notified, these cities need to be ring fenced so that the land monetization values come back to the city and therefore state acts were to be amended, which have been done. When cities were made in India, Gurgaon, Noida, we have seen upsides of land values being captured by political parties and by real estate players and not coming back to the city. Therefore a lot of work had to be done. All this has been done. The DMICDC Trust has approved substantial number of projects. We are going to break ground with Dhulera in Gujarat for the first 24 sq kilometer, Maharashtra and with two new cities in Uttar Pradesh (UP), the Greenfield township in UP and one in Madhya Pradesh (MP) between Ujjain and Indore. My view is that DMIC is going to be a long-term play; we should not rush up with it. This is a project which is going to make a paradigm shift in India, infrastructure development and its process of urbanisation. It is very important that we don’t make the kind of mistakes we have done in other infrastructure sector.

Q: How much is ready to be tendered, has anything been tendered at all or how much will be tendered in 2014 first half or second half?

A: In 2014, we will have close to about almost four new cities taking off in India. We have finalised the development plan and with all approvals in Maharashtra, Gujarat, UP, MP and two large multimodal logistic hubs. This w   ill be nothing less than very substantial movement on ground forward. This will really push urbanisation in a very big way. The important thing is that this would have been done after a lot of detailed homework, detailed engineering work; environmental clearance would have been taken by the end of this year. We will see by about May of next year in 2014 for two large cities and two large townships and two large multimodal logistic hubs taking off in 2014 with implementation on ground.

Q: It is important to bring out that there is a consorted move to make investment a lot friendlier on the ground and surely this will not happen in three-four years but directionally this is what we needed to do? If you put out your tenders in May, will India Inc bite?

A: When you do new cities, it is very important that you create the backbone of the city, the drainage, the information and communication technology (ICT) network on the back of it and that is the kind of detailed engineering that we have done. So that India makes a quantum jump in quality of engineering. This backbone of these new cities is being created with government funding with long-term lending coming in from Japan. Therefore, once the backbone of cities is created then it becomes far easier for private sector to come in. You cannot have situations like we have had in our existing cities where we bring in private players and then we start doing retrofitting of trunk infrastructure much later. My view is that once the backbone of these cities has been created and many of these contracts in the initial phases will be EPC contracts. To our mind, this would enable the private sector to come into the subsequent phases much quicker, much faster because all approvals would have been in place. Taking approvals for the private sector is quite a nightmare. We have struggled with this, we have taken about 44-45 clearances. That is a big challenge that we have met. We are extremely confident that once the EPC contract to global scale and sizes cracked on ground, the private sector will come in an extremely big way and that will provide the momentum to India’s manufacturing to India’s urbanisation.

Q: Like Mr Kant said that to create this entire infrastructure backbone, you have direct and indirect beneficiaries and all of these sectors, power, auto etc, can you just put together some stocks or some pockets that would benefit from this?

A: I just wanted to conceptualize it this way. When you created one port in Gujarat with Adani, it has gone from nowhere to the largest port in India effectively today, it is a USD 5 billion marketcap in these depressed times. What they are doing is creating seven manufacturing enclaves across India. It is much beyond the port, you will get the power and the water and the roads and everything built up, so you can go and plug and play. It also solves things, which we don’t have on the export side. We don’t have scale in India because you don’t have these zones, which allow manufacturing because today our special economic zones (SEZs) are all 50 sq miles - suiting a developer or a particular industrial house or a particular party and so on. If this is indeed implemented, this changes the landscape of manufacturing in India and these new townships effectively are a new Mumbai or a new Aurangabad or a new Nasik and so on. It is a bit like the internet. When the internet came, it is the content providers who just completely lifted off. This can lead to a big revival of manufacturing in India. Manufacturing is 15 percent of gross domestic product (GDP). Our exports are some 7-8 percent net of GDP today. We clearly need that to lift off. I would just like to put this in a perspective because goods produced in the northern part of India, today take about 13-14 days to reach the ports to the Western coasts of India. Once the Dedicated Freight Corridor comes in by the end of 2017, you will have goods reaching the ports within 14 hours and that is to my mind is a radical shift. It will make a paradigm shift. This would bring in a huge amount of efficiency in India’s exports and when you have these new large manufacturing cities on either side of these dedicated freight corridors, India will make a quantum jump in manufacturing. Dhulera, the city which we are doing in Gujarat is size of almost 920 sq kilometer. This was the size and scale of dimension of the planning process, the detailed engineering that we have undertaken. That is larger than Singapore. So we need to take a long-term perspective on this.

Govt indicates further relaxation in FDI policy

Expressing optimism over the economy in 2014, Commerce and Industry Minister Anand Sharma said the coming months will see a greater push for development of industrial corridors across the country and work will commence for establishment of the first few cities along the Delhi-Mumbai Industrial Corridor.

The government today indicated further liberalisation of the FDI policy in the coming weeks to attract foreign investments into the country. "The government will continue its endeavour for liberalising the FDI Policy further in the coming weeks to ensure that India retains its leadership position for attracting foreign investments," Commerce and Industry Minister Anand Sharma said in a statement. Last year, the government has relaxed foreign direct investment (FDI) norms in several sectors such as telecom, defence, PSU oil refineries, commodity bourses, power exchanges and stock exchanges.

In 2013, India was rated as the most favoured investment destination globally, he said, adding "the decisions of the government have resonated with the global community and we have seen results in the last few months". The ministry is now working to relax FDI norms in railways and construction activities. During April-October this fiscal, India attracted FDI worth USD 12.6 billion, a decline of 15 percent over the same period last year. Expressing optimism over the economy in 2014, he said the coming months will see a greater push for development of industrial corridors across the country and work will commence for establishment of the first few cities along the Delhi-Mumbai Industrial Corridor (DMIC).

The USD 90 billion DMIC project is aimed at creating mega industrial infrastructure along the Delhi-Mumbai Rail Freight Corridor, which is under implementation. Japan is providing financial and technical aid for the project, which will cover seven states totalling 1,483 km. "I expect that with greater foreign investment and technology collaborations, Indian manufacturing will also move up the value chain and acquire greater competitiveness globally," he added. On India's exports, Sharma said that despite weak demand in traditional markets, shipments have done reasonably well during the first eight months of the current fiscal. "I am sure that in the remaining period of this financial year, exports will show a strong and dynamic growth," he said. In April-November 2013, exports grew by 6.27 percent to USD 204 billion while imports aggregated at USD 304 billion. Trade deficit for the period stood at USD 100 billion. Further, the Minister said the steps taken by the government both on the fiscal and current account front have yielded positive results.