Power reforms irreversible: UP govt - 31 Aug 2010 - Business Standard

http://www.business-standard.com/india/news/power-reforms-irreversiblegovt/406436/

State to add 25,000 Mw capacity by 2017.

The Uttar Pradesh government on Monday assured industry that power sector reforms in the state were irreversible and its energy sector roadmap would ensure abundant availability of electricity by 2017.

“UP plans to augment power generation capacity by 25,000 Mw in the next seven years with the help of the private sector,” Infrastructure and Industrial Development (IIDC) Commissioner Anoop Mishra said, addressing Samriddhi, a Business Standard roundtable here. The topic of the deliberations was ‘Uttar Pradesh: The Development Agenda’. Last year also, discussions were held under the same topic.

Mishra noted that improvements in transmission and distribution infrastructure were a major part of the power sector reforms undertaken by the state government.

“Till the 1990s, there had been no substantial augmentation in the state power generation capacity. Now, our priority is to add power capacity with the help of private sector through public-private partnerships (PPPs), joint ventures, memoranda of understanding and co-generation by sugar mills,” he said.

Power has been the bane of UP’s industry, with the current demand-supply gap widening to almost 3,000 Mw. The current demand in the state is estimated at 10,000 Mw.

He said the government had undertaken an input-based franchisee distribution model in cities like Agra and Kanpur for economising on power, while the process would soon be rolled out in nine other towns.

“While, the distribution system in Agra has already been handed over to a private partner, things are moving in a similar direction for Kanpur,” he said.

Mishra maintained that coal availability was a bigger challenge for UP than production, as most upcoming plants were thermal units.

Other panelists on the 90-minute roundtable included State Bank of India (SBI) Chief General Manager B V Chaubal, Indian Industries Association President Anil Gupta, K M Sugar Mill Chairman L K Jhunjhunwala, Lucknow University Professor Arvind Mohan and Jet Knitwear Managing Director Balram Narula.

IIDC also touched upon other infrastructure projects undertaken by UP, such as access control expressways, for speedier development.

Narula regretted that although the state government had undertaken several welcome initiatives, things were not moving as fast as industry had desired.

Gupta raised the topic of tax rates and demanded that UP issue a White Paper on infrastructure, detailing a time-bound plan for power sector reforms.

Chaubal observed that since UP was an agro-based economy, SBI was giving due importance to providing banking facilities in the rural pockets by opening new branches and ushering in mobile banking solutions.

“We have also simplified loan procedures for faster dispensation of credit to industry, while collateral-free loan of up to Rs 1 crore is being provided,” he said.

Mohan referred to the second-generation reforms, wherein UP, Bihar and Orissa were bound to play a major role in propping up India’s economy.

“The small and medium sector should have a continuous dialogue process with the government,” he said, while contrasting the Indian infrastructure development model with that of China, adding that the latter kept its timeline.

Knowledge Utsav- techwhack.com

http://press-releases.techwhack.com/103053-knowledge-utsav-5

Knowledge Utsav, India’s largest Research and Development conference, which concluded today, called for enhanced public-private partnership (PPP) model to promote R&D in various sectors in India. Edu.In which hosted the conference in association with Tumkur University and Jain Research Foundation (JGi) has committed itself to act as a catalyst to bring the much-desired fusion between industry and academia.

The former Union Minister of State for Planning and MLC, M.V.Rajasekharan while inaugurating the conference, underlined the importance of collaborative efforts to promote R&D in the country as it was lagging behind the western world. “The industry has to engage the universities at different levels of research and be liberal in funding R&D efforts. Universities in the western world have been the platforms for research for various industries and they have been mutually beneficial.”

Dr. R.Chenraj Jain, Chief Mentor Edu.In and Chairman Jain University, said, “We are extremely pleased to receive such an overwhelming response for this first edition of Knowledge Utsav. Such phenomenal participation and support encourages us to make Knowledge Utsav reach out to a lot more people in the coming years and give R&D the required support. Knowledge Utsav aspires to be a stable pedestal for R&D to usher in India and also create awareness amongst individuals who intend to take R&D as a serious career option and not an alternate one.”

He further said, “The conference which attracted 465 papers across 44 different disciplines was a major achievement as it saved considerable time. Typically all of these papers would have been presented over a period of five years or so. By holding 44 conferences in a day, we have effected substantial savings on logistics and cost while capitalizing on the presence of researchers from diverse fields. ”

Dr. S.C.Sharma, Vice Chancellor, Tumkur University, said, “Universities in India need the backing of the industry to further research. Only when there is a healthy co-existent relationship both research and industry grow. We have the knowledge base, but we need proper R&D structures and the conference has been an eye-opener in this regard.”

Sudha Raju, Chairperson Edu.In, said, “The conference had overwhelming response with 465 papers presented across 44 different disciplines. About 165 institutions from nine States and over 2,000 delegates including from companies such as Microsoft, Adobe, Intel, IBM, HAL, Kirloskar, Orcale etc. Participated.

She further said, “The objective of the conference was to bring together the scientists and researchers working in the various sectors such as Defence, Space, Civil Aviation, Information Technology, Engineering, Management, Humanities, Nanotechnology, Bio-technology, Robotics, Green Technology, Energy, Social Science and bring out the advances made in the country in these sectors and focus on the future Science & Technology requirements in these critical areas.”

Sandhya Chintala – Senior Director, Education Initiative Nasscom; Ms. Irina Ghose, Director Education, Microsoft India; Dr. R. N. Iyengar- Director, Centre for Disaster Mitigation, Jain University; Dr. Krishna Venkatesh, head, Centre for Emerging Technologies and Director & Chief Technology Officer of Jain University; Vice Chancellors of various universities; key people from Intel, IBM, HAL, Kirloskar, Oracle and many other eminent persons attended the one-day event.

At the inaguration funcation The EDUCATOR, a national B2B magazine for the Education Sector was also launched.

Shipping Corp to finalise consultants for shipyard soon - 29 Aug 2010 - Business Standard

http://www.business-standard.com/india/news/shipping-corp-to-finalise-consultants-for-shipyard-soon/106912/on

Government-owned Shipping Corporation may soon finalise consultants for setting up a shipyard through the public private partnership model, sources in the Shipping Ministry said. Shipping Corporation of India (SCI) is in the process of appointing a consultant for a shipbuilding venture, a shipping ministry official told PTI. "They (SCI) would finalise the consultant very soon...Which would conduct a detailed study of the project," another shipping ministry official said. The government while transferring Hindustan Shipyard to Ministry of Defence in December, 2009 decided to set up a shipyard on PPP mode.

SCI had expressed its interest in participating in this shipbuilding venture.

At present, SCI owns 76 ships of 5.1 million DWT (deadweight tonnage) and has interests in all segments of shipping trade. In addition, it mans and manages 60 vessels of 0.2 million tonnes DWT -- which is the total weight of the ship including the cargo, crew and fuel.

The company is also gearing up for a follow-on public offer through which the government plans to sell 10 per cent of its stake, while SCI would raise 10 per cent fresh equity.

The government currently holds 80.12 per cent stake in the company and the remaining is with the public.

Maya govt scraps plan to expand Meerut airstrip - 28 Aug 2010 - Financial Express

http://www.financialexpress.com/news/Maya-govt-scraps-plan-to-expand-Meerut-airstrip/673405/

Lucknow: The ferocious protests and agitations against the land acquisition process for the Yamuna Expressway project at Tappal, in Aligarh, has finally started making its impact felt in other parts of the state as well. Almost two and a half years after the Uttar Pradesh government had kicked off plans for the expansion of the Dr Bhimrao Ambedkar airstrip in Meerut, the administration has pulled back from the process and has canceled the process of land acquisition for the project with immediate effect.

As a result, no further work on acquiring land for the project, nor any other work in this regard will be done.

It may be mentioned that the state government had proposed an international airport at Meerut as the present air strip is used only for unscheduled flights. The project was to be implemented through public private partnership (PPP) on a design, build, finance, operate and transfer basis. According to sources in the government, the project was high on the chief minister Mayawati's agenda.

As per a study conducted by RITES, an expansion plan for the airport was being proposed on more than 100 acre of land and for this, the government has given an order for acquiring 30 acre of land from about 30 farmers of the area in the first phase.

“Only recently, the civil aviatoin department had issued a notification to to acquire the land under the “emergency clause” and the administration had just about notified the names of the persons whose lands were to be acquired when this Aligarh incident happened. As a consequence, the civil aviation department has, without citing any reason, immediately canceled the land acquisition process for the 30 acre,” said an official on condition of anonymity.

The need for a second airport on the fringes of the national capital region has been a long standing demand of the Uttar Pradesh government, especially in view of the burgeoning air traffic at the Delhi airport. The Delhi airport is congested with virtually no possibility of extension, said the official, adding that an Airports Authority of India study shows that by 2015-16, the estimated air traffic at the IGI Airport will hit 108 million, which will add to the air congestion.

The proposed Meerut airport will not only cater to the industrial towns of western UP but would also be of immense relief to neighbouring Uttarakhand.

India Aims to Triple Port Capacity in a Decade, Easing Trade Bottlenecks - 27 Aug 2010 - Bloomberg

http://www.bloomberg.com/news/2010-08-27/india-aims-to-triple-port-capacity-in-a-decade-easing-trade-bottlenecks.html

India, Asia’s third-biggest economy, plans to triple port capacity within a decade, as it tackles infrastructure deficiencies that threaten to damp growth.

The country needs “urgent action” to ensure that it has sufficient seaport capacity, Secretary of Shipping K. Mohandas said in an Aug. 25 interview in his office in New Delhi. “Ports are very important to India’s economic growth.”

The government intends to open new harbors and sell stakes in ports to help annual capacity reach 3.2 billion tons under a 10-year plan that will be released next month, Mohandas said. The nation is also building highways, railways and airports to ease transport bottlenecks that could cost 1.1 percentage points of growth in fiscal 2017, according to McKinsey & Co.

Indian ports will likely handle more than 2.5 billion tons of cargo a year by 2020, Mohandas said. Throughput in the year ended March rose 14 percent to 844.9 million tons. Nationwide capacity is about 996 million tons, said Rakesh Srivastava, joint secretary for ports at the shipping ministry.

Contracts for 25 public-private port projects will be awarded in the year ending March, which will draw 140 billion rupees ($3 billion) of private investment, Mohandas said. The government awarded 13 projects last fiscal year. State contributions to these partnerships are usually in the form of land, dredging and connections to road and rail links, he said.

Jawaharlal Nehru Port

The government also intends to award concessions for two new terminals at Mumbai’s Jawaharlal Nehru Port this fiscal year, including one for a facility able to handle more shipments than the harbor’s three existing terminals, Mohandas said. The

The state-controlled operator of Jawaharlal Nehru, India’s busiest container harbor, will likely be turned into a corporation by the end of March, paving the way for an eventual share sale, Mohandas said.

“Jawaharlal Nehru Port is the first possible candidate for corporatization,” he said. “A final decision has not been taken but hopefully it will happen this year.”

Mohandas declined to comment on what size stake the government may sell in the port operator and on when a sale could happen. Jawaharlal Nehru Port Trust, Dubai-based DP World Ltd., and an AP Moeller-Maersk A/S-Container Corp. of India Ltd. venture currently run terminals at the port.

 

MMRDA’s east coast water transport project in limbo? - 27 Aug 2010 - DNA

http://www.dnaindia.com/mumbai/report_mmrda-s-east-coast-water-transport-project-in-limbo_1429258

The Mumbai Metropolitan Region Development Authority’s (MMRDA) plans to connect places on the eastern coast of Mumbai through water transport have gone bust.

While chief minister Ashok Chavan on Thursday was unclear whether the MMRDA was taking up the eastern coast passenger water transport project, top officials from the MMRDA confirmed that the project is facing problems.

After a meeting with MMRDA officials, Chavan still could not clearly answer questions regarding the project. “The project has been carried out by the Maharashtra State Road Development Corporation (MSRDC),” is all he had to say. When he was told that though MSRDC is going ahead with the western coast passenger water transport project, the MMRDA is yet to start with the eastern coast project, he had nothing to say.

MMRDA metropolitan commissioner Ratnakar Gaikwad confirmed that the project had run aground. “Our Roll-on-Roll-off (RoRo) project will head for a tendering process soon,” Gaikwad told reporters. He, however, refused to explain in detail why the project was stuck.

One of the most delayed suburban transport projects, and one which has the potential to reduce the burden on Mumbai’s overcrowded suburban railway service, the passenger water transport project was first conceived by the MSRDC in 2003. The process of tenders for the project ground to a halt when the awarded tender had to be cancelled due to technical glitches, in 2005.

The MMRDA came into the picture nearly a year back, when the authority made a budgetary provision of Rs100 crore for the east coast project. The approximate cost of the project was Rs800 crore.

Based on a private-public-partnership model, the project was planned with a travel time of 45 minutes from Ferry Wharf up to Belapur, Nerul and Vashi.

The MMRDA was also in talks with the Mumbai Port Trust (MbPT) and had in-principle approval from the agency for using Ferry Wharf. The idea was to construct jetties at all four places and the private operator was to run the ships on PPP basis.

All roads in Bangalore will be paved with concrete, asserts CM Yeddyurappa - 25 Aug 2010 - DNA

http://www.dnaindia.com/bangalore/report_all-roads-in-bangalore-will-be-paved-with-concrete-asserts-cm-yeddyurappa_1428381

Chief minister BS Yeddyurappa on Tuesday said that his government would lay out concrete roads in BBMP, BDA and other local body limits.

“We will lay the concrete roads even if it costs 20% more than the bituminous roads. The treasury has enough money to fund the concrete roads,” said Yeddyurappa, who inspected the one kilometre concrete road laying work at Hosur Road being done free of cost by a cement manufacturers’ association.

“This technology will enhance the life of the road to 25- 30 years with little or no maintenance. It is also cost effective as compared to the bituminous roads which have a life span of only 2-3 years. The bituminous roads require frequent maintenance, but if white topping is done then it will cost hardly 20% more amount than the asphalting, but will it lost long,” informed Yeddyurappa.

Yeddyurappa directed the BBMP and BDA to chalk out a plan to pave all roads with concrete in their limits.

“The Mumbai municipality had implemented the concrete roads five years back. We are also planning to take up the concrete roads which will be based on a public-private-partnership (PPP) model. The public will not be required to pay toll to use these roads. But the private partners will be given advertisement rights on the stretch. We will form a special committee and discuss the pros and cons of concrete roads. A lot of companies have evinced interest in taking up the concrete road work in the city. We are discussing the matter. Hopefully, we will take a final decision soon,” announced Yeddyurappa.

After inspecting the Hosur Road concrete work, the chief minister inaugurated the pre-cast element underpass at Madiwala junction which took just two months to build. Yeddyurappa, joined by city mayor SK Nataraj, transport minister R Ashoka; deputy mayor N Dayanand and other leaders, took a walk on the underpass.

He also inaugurated a pedestrian underpass constructed in front of the Dasappa Hospital near the Town Hall. The underpass has been built at a cost of Rs237.06 lakh. Work for the underpass had started in 2007.

Speaking to reporters, Yeddyurappa said that the government is constructing flyovers and underpasses to ease traffic movement in the city. “The government is taking all necessary steps to bring down the number of road accidents in the city,” he said.

Yeddyurappa also said that the BDA will construct 10 multi-level parking complexes to solve the parking problem in the city.

“A sum of Rs1, 000 crore has been sanctioned for the project. 75% of the metro rain work is completed on the Byapanahalli- MG Road route. It will be completed by the end of this year. We are holding talks on taking up monorail and circular railway projects after the completion of the Metro project. The government will spend Rs18, 000 crore in the coming three years for the infrastructure development in the city. We are drawing up the blue print,” he said.

India invites Singapore investors - 23 Aug 2010 - Business Standard

http://www.business-standard.com/india/news/india-invites-singapore-investors/106157/on

India invites Singapore investors

Singapore-based investors have a strategic role to play in the Mumbai-Delhi Industrial Corridor development, especially the city state's experience in providing urban solutions and skill development education, Indian High Commissioner T C A Raghavan told an industry forum today.

"Singapore investors can focus on providing water treatment technologies, urban development solutions and skill manpower development," he said at the launch of a marketing forum on the 2011 Gujarat Global Investors Summit, called 'Vibrant Gujarat'.



The Delhi-Mumbai Industrial Corridor is a mega infrastructure project of around $90 billion, covering an overall length of 1,483 km between the National Capital and the business capital of India, Mumbai.

Raghavan said the key to maintaining India’s double-digit growth over the next decade would be infrastructure development, which would include ports and airports.

Infrastructure development, in various public and private partnership forms, was taking off in India compared with China where most of it has been completed, Raghavan said. "This would mean more investment opportunities in India," he added.

Meanwhile, the Gujarat state started a series marketing meetings in Singapore today to build up its summit delegate and corporation participation for the summit to be held January 12-13, 2011.

A 10-member delegation led by Industries Commissioner of Gujarat government, B B Swain is in Singapore for a three-day marketing campaign.

Swain said delegates and companies from Japan and Canada have confirmed their participation in the summit, which, for the first times, will also have participation from 12 other Indian states.

The summit was being opened to participation from other Indian states to reflect the India-wide development programmes and projects, he said.

India's new maritime plan to be ready by September - 21 Aug 2010 - sify.com

http://sify.com/finance/india-s-new-maritime-plan-to-be-ready-by-september-news-news-kivbkOhfcaj.html

India's new maritime plan, which will replace the National Maritime Development Programme (NMDP) that is due to expire in 2012, is likely to be ready in another month's time.

"We are working on a decadal action plan for the maritime sector, which should be ready in about a month. This will go beyond the NMDP that will expire in 2012," shipping secretary K Mohandas said here today.

The existing NMDP only covers projects which have been under implementation as on April 01, 2005 or those likely to start by March 31, 2012.

Therefore, the ministry of shipping is in the process of drafting a new plan that would contain year-wise projects for the next decade, covering the 12th plan and the initial period of the 13th plan.

Although Mohandas was reluctant to divulge details of the proposed blueprint, he said that areas such as port capacity expansion, port connectivity and dredging would be part of the new plan.

But earlier this year, shipping minister GK Vasan had told parliament that a sub-group and four core working groups had been constituted to draft the plan.

The core-groups would look at consolidating inputs received from various ministries, major ports and maritime states and assist in the drafting of the report.

The sub-group, simultaneously, would be responsible for reviewing the NMDP, identifying specific schemes/projects and other measures, compile and suggest the method of financing port development and provide projects, among other functions.

The resultant new plan is expected to include policy frame-work for stimulation of capacity expansion as well as growth of maritime sector. Supplementary projects for ports development from other infrastructure ministries such as National Highway Authority of India, Roads, Railways and Inland Waterways.

"We will be awarding 25 ports under PPP (public-private-partnership) this year, but our overall plan is much bigger, which will be detailed in the action plan," Mohandas added.

Indian port expansion conference - 20 Aug 2010 - portstrategy.com

http://www.portstrategy.com/news101/asia/indian-port-expansion-conference

An event is being planned to tackle some of the more specific issues thrown up by Indian port expansion plans. The region’s ports are facing high growth, but Lieve Dries, COO of Noppen, points out efficiency is lacking.

Ms Dries explains, “Indian ports nowadays realize business is growing, volume and trade figures are rising impressively, but with the current infrastructure and lacking hinterland connectivity they just cannot handle cargo through-put in an efficient way.” Mr Dries adds, “I would say the main challenges are all-round capacity planning with main focus on improved efficiency.”

Indian ports, both state owned and public-private partnerships, are busily increasing capacity on the back of the rising demand: estimated container traffic is expected to reach 21million teu by 2014. However, beyond the ports capability, there are also questions arising from the need to manage such a massive step up in growth.

The India Port Expansion and Capacity Upgrading Conference planned for October in Mumbai, hopes to tackle some of these issues with a mixture of government representatives, port authorities, industry experts and market leaders discussing options with solution providers on best practices and technology innovations that could be adopted.

Some of the topics to be addressed cover India’s role as a global player, containerisation of the market and future outlook of vessel and cargo types, aligning port growth with regulatory requirements and future trends, initiatives to tackle cargo bottlenecks, (port to road or rail connectivity), handling equipment needs and pitfalls from an Indian perspective, seismic design and India’s requirements for climatic and weather-proof solutions, plus, of course, the future of VTMS in India.

Further, a growing consensus in the port industry has lead to strengthened focus on clean solutions that help ports in reducing their footprint, including Green dredging, construction and expansion.

Airport revamp: BIAL to spend Rs.1,000 crore - 19 Aug 2010 - sify.com

http://sify.com/news/airport-revamp-bial-to-spend-rs-1-000-crore-news-default-kitsaciccbf.html

Bangalore: The Bangalore International Airport Ltd (BIAL) consortium will invest Rs.1,000 crore (Rs.10 billion) to enhance and expand its airport at Devanahalli, about 38 km from this tech hub, a top company official said on Thursday.

'The Bengaluru international airport will have a new look with enhanced capacity in terminal 1 to meet the rapidly growing passenger traffic to and from this city,' BIAL Vice-Chairman G.V. Krishna Reddy told reporters here.


The consortium board, which was reconstituted after GVK Power and Infrastructure invested 29 percent early this year, will borrow Rs.700 crore from banks as debt and raise the balance Rs.300 crore from internal accruals and other stakeholders in proportion to their equity holding in the public-private company.


'The debt-equity portion of the proposed investment will be in the ratio of 70:30 and the renovation-cum expansion project will be implemented in 18 months,' BIAL Managing Director Sanjay Reddy said.


The country's Rs.2,500-crore greenfield airport, which began commercial operations May 23, 2008 on build, own and operate (BOO) terms after protracted delays, has been under attack for its 'shoddy image' when compared to other international airports, especially its counterpart in Hyderabad.


Post-expansion, the terminal will spread over an area of 134,000 sq.m (square metres) against 72,000 sq.m presently and will have 23 boarding gates in place of 12 now, 83 counters against 53, 13 baggage reclaim belts instead of nine and 5,300 seating capacity in place of 2,300 seats.


'The expansion of the terminal has been designed to enhance the operational performance and handle the increase of passenger traffic till 2015, which is projected to be 17.6 million people, including 14 million from domestic and 3.6 million from international operations,' Sanjay Reddy pointed out.


Designed by the US-based leading architect design firm HOK in partnership with planners, urban designers and consultants, the expanded terminal will sport a new look, with a swooping and curving roof that will give a new brand image to the otherwise swanky airport.


'We are committed to make Bengaluru airport the gateway to South India and an important driver for the growth of the city and state,' Krishna Reddy asserted.


Noting that the proposed expansion of the existing terminal would mark a milestone for the airport, Sanjay Reddy said the radiant interiors and new exteriors will mirror the rich culture of Karnataka and the vibrant colours of this garden city.


Besides the Hyderabad-based GVKPI, the BIAL consortium consists of Unique Zurich Airport with Siemens Project Ventures holding 45 percent combine equity, the state-run Airport Authority of India and Karnataka State Industrial Investment Development Corporation (KSIIDC) with 13 percent each equity holding.


Larsen and Toubro (L&T) exited the consortium by offloading its 17 percent stake to GVK while Zurich diluted its stake by selling 12 percent to GVK.

Shiv Sena to oppose Navi Mumbai airport - 19 Aug 2010 - Times of India

http://timesofindia.indiatimes.com/city/mumbai/Shiv-Sena-to-oppose-Navi-Mumbai-airport/articleshow/6337498.cms

NEW DELHI: Toeing the line of environment minister Jairam Ramesh, a Shiv Sena member on Thursday said in the Rajya Sabha that his party will oppose building an airport at Navi Mumbai at the cost of environment.

Raising the issue during Zero Hour, Bharatkumar Raut said Ramesh has raised serious objections about the validity of the proposed airport.

"I congratulate the minister of environment and forests for taking the bull by horns," he said.

Raut said his party is for development of Maharashtra but not at the cost of environment. "My party will oppose it".

He said the project was being pursued for the benefit of industrialists-politicians who must have purchased huge piece of land at throwaway price and sell it at a premium for the airport project.

The project will destroy mangroves while two river flows will be altered. Besides, one hill would also be destroyed.

The Navi Mumbai airport project proposed in the public- private-partnership has been hanging fire after two years of Cabinet clearance.

PPP model to execute mono rail Phase I - 18 Aug 2010 - Times of India

http://timesofindia.indiatimes.com/city/bangalore/PPP-model-to-execute-mono-rail-Phase-I/articleshow/6327491.cms

BANGALORE: The state government is taking up the first phase of the 15.7 km mono rail project that will extend from Majestic to Agara Lake. The project will be implemented on the Swiss challenge method on a public-private partnership basis.

This was announced by chief minister B S Yeddyurappa here on Tuesday. After reviewing the Mono Rail project, which is planned to act as a feeder service to the Metro, with infrastructure development department ( IDD) officials, Yeddyurappa said the Malaysian-based M/s Geodesic Scomi Company will execute the first phase under the Swiss challenge method. He added that this company was already executing mono rail work in Mumbai.

"Our aim is to provide the city with a world class transport system. Therefore, we are giving in-principle approval to start the mono rail work," the chief minister said.

The total length of the rail, which connects 172 wards, is 60.6 km. It is estimated to carry five lakh commuters a day. Yeddyurappa said the mono rail will have a fully elevated track and hence the construction work will notaffect traffic movement in the city.

The design would keep in view Majestic, Yeshwantpur and Cantonment railway stations as central points for connectivity. The rail will focus on connecting schools, colleges, markets, hospitals, bus stands and railway stations that fall under 172 wards.

Reviving Indian Railways - 18 Aug 2010 - moneycontrol.com

http://www.moneycontrol.com/news/features/reviving-indian-railways_478988.html

Global experience has shown privatising helps turn around unwieldy national railroads. India must follow suit

Between 2004 and 2008, Indian Railways has not been able to perform to its potential. Normally, Railways’ revenue grows by two percentage points higher than the growth of Indian economy. According to Railways’ own statistics, its revenues growth rate was two percentage points lower than the growth rate of Indian GDP in each of these four years.

The main problem is a severe capacity constraint that does not allow the Railways to carry more freight even when there is demand. Freight traffic has grown by an average of over 9 percent in the last four years but in order to grow further the railways have to concentrate on infrastructure development.

The central government recently set up the National Transport Development Policy Committee to suggest measures to promote greater commercial orientation of transport services in the country. The committee is chaired by Dr. Rakesh Mohan, former deputy governor, Reserve Bank of India, who earlier headed the expert group on Railways that recommended corporatisation of the railway administration in 2002.

This might be the right time for the government to consider taking a second look at railway reforms. A senior officer concerned with transport infrastructure planning in the country said that the committee was likely to recommend a few measures in the direction of railway reforms and that there would soon be consultations in this regard with policy-makers and experts.

This would not be a moment too soon. Railways badly needs to grow its revenues because its expenses have shot up. Its ordinary working expenses grew by 7.3 percent in the years between 2004-05 and 2007-08, but jumped by 32 percent in the next year on account of the pay commission. A newspaper report pointed out that the railway surplus too has dwindled to Rs. 1 crore from over Rs 4,400 crore the last fiscal.

“Railways are at a crossroad where business as usual is not sustainable in the long run. If Railways has to be protected as the country’s growth wagon, transformation of the governance structure and augmentation of the accountability levels for delivery and performance is a must,” says infrastructure expert Akhileshwar Sahay who has studied railway reforms across the world.

So what can Railways do? Experts on railway restructuring around the world say that a mix of reforms done in Japan and Argentina could solve key problems. There are four problem areas that need attention right away (see graphic). Some of these can be solved through Japanese style reforms (for administration) while the others will need the Argentinean method (exit non core businesses).

Japanese National Railways was losing $50 million a day before it went in for restructuring and privatisation in 1987. JNR was prone to political pressure, had no discretionary powers and had lost autonomy like Indian Railways today.

As part of its railway reforms, Japan split up its nation-wide services into joint stock companies by region and division. The passenger services were split into six companies and freight services were handed over to a dedicated unit. Bullet trains would be run by another corporation while yet another body would clear JNR’s historical debt. In the years since it restructured its operations, JNR has turned profitable with the three main companies earning profits in the range of $600 million to $2 billion. Accidents have also decreased by over 50 percent.

Indian Railways has 17 administrative zones and a six member Railway Board oversees the functioning of the organisation. It has over 13 lakh employees, runs 15,000 trains and manages over 8,000 railway stations. “If the Railways in India were to stitch together three or four administrative zones into a joint stock company each, they would be able to plan and execute projects at a faster pace. And they can easily unlock a value upwards of Rs. 1 lakh crore if they were to launch IPOs,” says Akhileshwar Sahay.

Argentina, after incurring losses of over $1.4 billion annually, decided to set railway privatisation in motion in 1990. The privatisation strategy adopted by Argentina was to break up the rail network into franchises and hand over their operations and maintenance after putting up these contracts for bidding. This helped Argentina cut down on its subsidies to commuter services from $1 billion to $100 million annually.

Indian Railways is already tinkering with the idea of constructing new rail lines through concessions, having recently proposed building 25 lines in the public private partnership mode. Railways sources say that the ministry spends close to 10 percent of its expenditure on non-core activities such as manufacturing units, schools and hospitals for its employees.

The Railways has tried this to a limited extent by going in for budget hotels under PPPs where private players are invited to build and operate hotels under a lease.

An expert on railway financing in Indian Railways says he was for more concessions being awarded and bringing in private sector efficiencies. “Housing, hospitals and production units are some areas that can be given out on concessions.”

However, all these initiatives will have to be done very carefully. Former financial commissioner with the Railway Board, R. Sivadasan, warns that the railways will have to be very careful if it plans to implement any reforms. “If the Railways operations are turned into joint stock companies then they would have to set tariffs on a commercial basis and may not be in a position to subsidise the poor passengers. Will the poor be able to afford a higher slab?” he asks. Clearly, the Rakesh Mohan committee will have provide a way for passenger traffic to be still subsidised as too many people benefit from this service. But if one were to leave that untouched, Railways has to fix all other things. Passenger traffic should be viewed as a constraint rather than a Holy Cow that can be used to scuttle reforms.

PPPs: High-cost solutions to low-cost problems - 18 Aug 2010 - Business Line

http://www.thehindubusinessline.com/2010/08/18/stories/2010081851920600.htm

PPPs-short for public-private partnerships. Many in decision-making positions in Government believe it's the magic solution to the inefficiencies of Government institutions in infrastructure – power, roads, ports, airports, etc.

‘We just don't have money for the huge investments', is a common refrain. Fair enough. Finding it in the budget is impossible. A different model is needed. Hence PPPs.

In between, the performing arms of Government have been quietly forgotten. These are the ‘mahanavaratnas', ‘navaratnas' and ‘mininavaratnas' in the public sector. Organisations such as BHEL, NTPC, SAIL, GAIL, ONGC – it can go on. Unbelievably, one could even add some State Government-owned companies such as GSFC and GNFC in Gujarat and TNPL in Tamil Nadu. And who makes the best cars in India? Maruti, started as an entirely Government entity.

So it's not axiomatic that Government ownership causes inefficiency. Public sector managers are as competent as those in private sector. In fact, one's guess is it's more – compare the scale of investment and technology in processes and products and the average private sector company is nowhere near.

Take the power sector. Even the unbundling of generation and transmission in electricity boards hasn't made much difference to their operating performance, capacity additions and viability. Free and subsidised power are the culprits.

Is PPP the solution? The only difference - and it's a major one - is that State Governments, in whose domain power falls, must featherbed the tariffs of private power producers, who will not invest without returns in the high teens and upwards. Even the advantage of the lower cost of electricity board power generation is gone. So the burden on the fisc only increases.

Myth

Private sector investment is also a myth. Even a cursory analysis of every private sector power project financing would prove most of the debt funding is from public sector banks and equity is from the market. What we seem to be paying for is the ‘managerial' expertise of a businessmen with the right connections who is ‘packaging' a project that can be done more cheaply in the public sector.

The same arguments apply to PPPs in roads and airports. In every case, Government and the public are paying prices and returns way above what's justified for costs and risks. (The climax is surely ‘airport user charges' to fund promoters' equity! One wonders why the paying passengers shouldn't be given those shares).

 

'Bureaucratic efficiency must for PPP success in infra financing' - 17 Aug 2010 - Business Standard

http://www.business-standard.com/india/news/%5Cbureaucratic-efficiency-must-for-ppp-success-in-infra-financing%5C/105557/on

Bureaucratic efficiency and adequacy of returns have been identified as the major factors for the success of a PPP model of infrastructure financing, as per a study conducted by some Reserve Bank of India's (RBI) officials.

Concluding that the private sector has to complement the government's efforts in funding infrastructure development in India, the study said the flow of private investments into the sector depends on a host of factors

"The success of such (PPP) models would require facilitating factors such as bureaucratic efficiency, adequacy of returns, efficient market mechanisms, information access, to name a few," the study noted.

The RBI staff study, titled, 'Infrastructure Financing: Global Pattern and the Indian Experience', which examined practices in infrastructure financing in some select countries, vouched for the Public Private Partnership (PPP) model.

"The PPP mode of infrastructure financing comes out as the most viable and desirable model... The model is likely to be a success, provided a transparent risk and revenue sharing approach is followed," it added.

China spends 20 per cent of its GDP on infrastructure development and this is substantially higher in comparison to India, which spends just about 6 per cent of its GDP on provision of physical infrastructure.

"Although there is a robust growth in the PPP investments in the road sector, the forthcoming investments in other sectors such as power, irrigation and ports are relatively meagre," the study highlighted.

For the 11th Plan (2007-12), the government has estimated the expenditure requirement on infrastructure at $514 billion in order to maintain the GDP growth rate of 9 per cent annually.

For the 12th Plan ending 2017, the funding need for infrastructure has been estimated at $1 trillion.

"Infrastructure financing needs cannot be met by the government alone and hence, the case for private sector participation is strong for meeting the challenge," it said.

Further, the study said banks must keep track of asset- liability mismatches arising due to infrastructure financing, adding that appraisal and monitoring mechanisms for the financed projects need to be tightened.

It also suggested finding innovative means to channelise resources of post-office deposits and pension funds into infrastructure financing and introducing land reforms for paving the way for success of these projects.

Shipping ministry to award 25 port projects under PPP this fiscal - 16 Aug 2010 - Economic Times

http://economictimes.indiatimes.com/news/news-by-industry/transportation/shipping-/-transport/Shipping-ministry-to-award-25-port-projects-under-PPP-this-fiscal/articleshow/6320010.cms

MUMBAI: The Shipping Ministry will award 25 port projects under the Public Private Partnership (PPP) scheme during the current financial year, a senior government official said.

The ministry is also expecting investments from Singapore, Dubai and other Gulf countries, he said.

"We would award 25 PPP port projects in the current fiscal. The collective value of these contracts would be around Rs 20,000-crore. So far, five projects have been awarded to the developers," Shipping Secretary, K Mohandas, said in Mumbau without divulging any financial details of the contracts.

Besides, the ministry is also expecting investments from countries like Singapore, Dubai and other Gulf countries. Two of these projects at Paradip and Ennore near Chennai have already been awarded to Sterlite-Leighton and Eredene Capital consortium respectively.

These projects also include creation of mega container terminal or bulk transhipment at Chennai Port, New Mangalore Port and conversion of berth for container terminal at Tuticorin port.

These 25 PPP projects also include development and operation of two berths at Indira dock as dry bulk cargo terminal in Mumbai Port and development and operation of a dry commercial cargo at Mumbai Port.

According to Mohandas, these projects are expected to enhance capacity at the centrally-regulated 12 ports by 46 per cent.

** India's most misunderstood sector - 16 Aug 2010 - Business Line

http://www.thehindubusinessline.com/2010/08/16/stories/2010081650240700.htm

India doesn't have transport economists, only transport managers and transport bureaucrats. No wonder the sector is so misunderstood.

T.C.A. Srinivasa-Raghavan

Almost unnoticed, over the last 20 years, the transport business has been globalised and liberalised almost to the extent of finance. It is now broadly called logistics and comprises not just the means of moving goods and people, but also of their storage — including indeed of people, as seen from the facilities now available in airports and railway stations. Huge amounts of capital have been invested in the business, which has gone from being mostly a state-financed sector to one with large dollops of private capital. While this has led, overall, to greater efficiency in moving and storing, it has also thrown up some interesting issues for domestic transport providers.

Stripped to its essentials, the problem to be solved is this: how can state subsidies be substituted by intra-firm cross subsidisation of products. That it has happened and is happening is not in question. But investors haven't been very happy with this practice because, by its very nature, intra-firm cross subsidisation of products is an opaque accounting phenomenon that permits creative accounting to be taken to new heights.

The problem has become especially acute when large firms have merged to create even larger firms, which have then proceeded to buy out smaller firms in order to increase market share. Some of these smaller have been highly profitable and have been used to cross-subsidise the larger ones. The reverse has also been true. A complicating factor is the fact that transport has acquired aspects of a public good which is why governments have created regulators.

Right pricing

This, in turn, has created a new problem for firms: how to fully reflect costs in the prices charged for a service when it is viewed as a quasi public good or, as they are called in India, “essential commodities”.

The consequence is a thorny problem of political economy, especially in developing countries that have to strike a fine but dynamic balance between efficiency and equity.

Emphasising efficiency may mean that millions can't use the service, so have to use their own traction — walk or cycle over long distances. Emphasising equity could mean bankrupt firms, like our State transport providers.

The issue eventually boils down to deciding whether costs should be fully reflected at all levels of the service or only partially; and, if the latter, how to fund the gaps.

This is where State subsidies, or in their absence, intra-firm cross-subsidisation comes in.

Even where a subsidy (or cross-subsidisation) is deemed appropriate, the question remains: should it come to the fixed infrastructure, or to the service itself, or both.

Intra-firm subsidies can also result in huge arbitrage opportunities for firms, when they milk one service, the demand for which is inelastic, to fund another for which demand is less inelastic, and thus make huge profits. The Indian Railways is a classic example of this.

They are ripping off the freight customers to subsidise passengers whose demand is not all that inelastic.

And, although pricing plays an important role in investment allocation, the Indian Railways is not doing even that, so that the excess profit from freight operations is not being used to enhance freight carrying capacity, at least not in the degree possible. Instead, politicians are milking the system for votes.

There is perhaps a sensible way out of the problem: the State should invest in fixed infrastructure alone and leave the services to the private sector. This would give real meaning to public-private partnerships, rather than the crony-ism it has come to involve now. The airline business is a good example of this.

TAX ISSUES

It would, even more importantly, take care of the related tax issues as well. At present, tax benefits are available only for fixed infrastructure, which is not fair because even moveable assets require huge investments.

This does not mean that ship, airline, bus, truck and rail operators should enjoy tax benefits; it only means that if the State develops the fixed infrastructure such as roads, ports, airports, railway stations and so on, the investment will not get tax breaks as they will be financed by tax revenues, not risk capital, either debt or equity.

I doubt, however, if the Planning Commission will pay heed. It is on its own trip, as they say, and as always, behind the curve.

** Vinayak Chatterjee: Transport us, Dr Mohan - 16Aug 2010 - Business Standard

http://www.business-standard.com/india/news/vinayak-chatterjee-transport-us-dr-mohan/404626/

Ten priorities for the High-level National Transport Development Policy Committee

It was when Dr Manmohan Singh was the member-secretary of the Planning Commission (from April 1980 to September 1982) that India last had a serious look at Transport Policy. In 1980, a National Transport Policy Committee, under the chairmanship of the late B D Pande, a former Cabinet secretary, submitted its report. Thirty years later, as prime minister, Dr Singh probably remembered this when he requested Dr Rakesh Mohan to head a High-level National Transport Development Policy Committee in February 2010.


one of the foremost thinkers in India’s infrastructure domain. His passion for infrastructure policy goes back a long way to his PhD thesis in urban economics from Princeton University. In recent times, he is better known as the former secretary of the Department of Economic Affairs and former deputy governor of the Reserve Bank of India. He has also chaired the Expert Group on Commercialisation of Infrastructure which issued the famous Indian Infrastructure Report in 1997. He also steered the Expert Group on Railways which issued the Indian Railways Report in 2002. As chairman of this new High-level Committee, he has been conferred the rank of minister of state.

Even before the B D Pande Committee (1980), India did have some strategic thinking. In the roads and highways sector, for example, recognising the need to develop arterial routes to link the Union capital with state capitals, major seaports and other highways, the National Highways Act, 1956, was enacted. In 1957, chief-engineers (road and bridges department) of the central and state governments met in Bombay. The engineers presented a 20-year Road Development Plan (1961-81) in 1958 which is popularly known as the Bombay Plan.

The terms of reference of this latest High-level Committee are sufficiently broad to allow Dr Mohan to focus on whatever he thinks is relevant. But the task now is far more complex than what Mr Pande had to contend with in 1980. India, growing at over 9 per cent, and poised and ambitious to hit double-digit growth rates, sees “infrastructure bottlenecks” as the single-largest impediment to achieve this target. At a Fund-Bank meeting in Washington a few years ago, Mr Chidambaram, then finance minister, had remarked: “Infrastructure logjams are likely to impact loss of GDP to the extent of 2 per cent.” While economic units cope with energy shortages with individual remedies (high cost and inefficient as they may be), in the area of transportation there is very little play for “private solutions”. Thus, much of what Dr Mohan’s Committee postulates will play a crucial role in the nation’s economic destiny from now till 2050.

In the 11th Plan, the share of transportation (roads, railways, ports and airports) is Rs 6,95,000 crore, which is 33 per cent of total infrastructure spend projected. The 12th Plan infrastructure spend, the prime minister has said, is expected to be double that of the 11th Plan, i.e. $1,000 billion, against $500 billion. Assuming the 33 per cent share of transportation remains broadly the same, Dr Mohan’s recommendations are certain to impact the nature and direction of $330 billion, or roughly Rs 14,00,000 crore in the immediate, and much more over the next few decades. It is indeed an onerous responsibility.

While there is a maze of issues that the Committee will have to navigate through, here is a suggested list of ten priority areas:

Road-Rail mix: Compared to other sub-continental nations, India’s road-rail mix is getting far too skewed towards road with all the consequential downsides. The surgeon’s knife will have to cut deep into existing turf, structures and practices to shift the balance back to rail movement on trunk routes. Dr Mohan became hugely unpopular with the Railways establishment when he announced radical reform measures for railways in his 2002 report.

Energy sustainability: The link between transport and energy is crucial in the 21st century. The sustainability of current patterns, use of technologies and resultant carbon footprints require refashioning. Specifically, minimisation of dependence on petroleum fuels and maximisation of environmental soundness are the key desirables.

Coastal shipping: This has to be quickly encouraged and facilitated. Concrete steps are awaited.

Regulatory environment: The Planning Commission, in its draft legislation for a new architecture for independent regulators in infrastructure, has suggested setting up of a Transport Regulatory Authority. The Committee has to take a view on this matter.

Urban transportation: This has, historically, been caught in the cross hair of the urban ministry, railways and urban local bodies. A hierarchy of urban transport choices and institutions needs to be formulated and adopted to drive far higher levels of public transportation as compared to the situation today.

Methods of financing: Figuring out a financing plan for the Rs 14,00,000-crore requirement for transportation in the 12th Plan is not an easy task. Crucial to the solution is the extent of usage of PPP (public private partnership) interventions to leverage public expenditure, while continuing to provide “access with affordability” to the “aam aadmi”.

Integration and multi-modalism: The favourite topic at all transport seminars, the seamless integration of transport modes, has eluded India. A “logistics-cum-network” view of transport and related institutional solutions to achieve this will be eagerly awaited as an output of the Committee.

Global and regional hubbing: India has clear ambitions to emerge as one of the major hubs for Asia. Like a seat on the Security Council, absence of this status is a source of discomfort and resentment. Today, maritime cargo gets trans-shipped at Colombo or Dubai or Singapore. Even the grand opening of the T3 terminal at Delhi airport begs the question whether major airlines will be sufficiently motivated to adopt it for hub operations in and out of Asia.

Safety and quality of service: India has the dubious distinction of having the worst safety record on its roads. Indian Railways’ quality of service to its many million passengers is also well-known. So is the story of roadways corporations. Can the nation expect some clear “service-delivery standards”, or “service-level-agreements” that the transporters provide, and be held accountable for?

The developmental agenda: From rural connectivity to North-East and hill-area linkages, to poorly developed “Naxal” tracts, can transportation herald a new India? What is going to be the balance between outlays for existing as well as remunerative economic corridors versus long-term development of neglected areas? This will be one of the hardest nuts to crack for Dr Mohan and his Committee.

Transport us, Dr Mohan!

The author is the chairman of Feedback Ventures. Views expressed are personal

 

** Karnataka looks at PPP route to infrastructure development - 16 Aug 2010 - sify.com

http://sify.com/finance/karnataka-looks-at-ppp-route-to-infrastructure-development-news-news-kiqbkMdfaga.html

The Karnataka government is keen to partner private sector for infrastructure development including rail, roads, energy, airports, rapid mass transit and ports under public-private partnership model.

"The state government will develop minor airports and also a Rs 800 crore mega food park with backward and forward linkages in the state in PPP mode," V Madhu, principal secretary, Infrastructure development department of Government of Karnataka, said at "Suminfra’ summit organised by Confederation of Indian Industry (CII) here. He also said that state would focus on financial viability of a project while ensuring environmental sustainability and social inclusiveness.

The state government, which has undertaken an ambitious plan for infrastructure development, will focus on logistics, energy, industrial infrastructure and tourism under the PPP mode. "Karnataka is keen to increase the port handling capacity to 114 million tonne by 2026 from 34 million tonnes with active private participation," Madhu added.

Referring to port development, J L Jere, Executive Director, KSIIDC said, " Tadri port will be a multi-cargo, all-weather port that will go a long way in promoting the economy of north coastal belt." In the road sector , the state also has some fine blue print to develop road network in the state.

"KRDCL is taking up the construction of 275 km road on Build Operate Transfer mode at the cost of Rs 722 crores. It will also take up another 1,300 km of mega road development project covering many parts of the State," Anil Kumar, managing director of Karnataka Road Development Corporation Ltd said.

He also said that with funding from World Bank, the state would construct four road projects — for which the tenders would be issued in October, 2010.

The government,which is also creating transport hubs covering various road stretches of about 3411 kms, is likely to receive funding from the Asian Development Bank for road sector in near future, he added.

In the food sector, the state is setting up food parks in the state with assistance in viability gap funding.

"The state government has embarked on developing food parks in the state using PPP route in Malur in Kolar District, Hiriyur in Chitradurga district, Navangar in Bagalkot district and Jewargi in Gulbarga district," Vanditha Sharma, managing director of Karnataka State Industrial Investment and Development Corporation Ltd (KSIIDC) said.

Apart from these four areas, the government has also identified seven more locations for setting up food parks, he added. In the transport sector, the state is promoting Subhash Nagar transport hub at Rs 1,400 crore.

"This inter-modal transit centre would link the bus terminals with the proposed Bangalore Metro and will come up in 31 acres. The government is also promoting transport hubs in Mangalore and Hassan at the cost of Rs 20 crore and Rs 32 crore respectively, besides promoting transport hubs at Puttur and Chitradurga for Rs 7 and Rs 36 crores," Gourav Gupta, managing director of Karnataka State Road Transport Corporation said.

Similarly, Sayed Zameer Pasha, managing director of Bangalore Metro Transport Corporation said that government was setting up transport hubs at Hebbal on PPP basis at Rs 300 crore, while promoting transport hubs at Jayanagar and Katriguppe at Rs 306 crores and Rs 144 crore.

US Locomotive maker EMD plans to set up india plant - 16 Aug 2010 - Hindustan Times

http://www.hindustantimes.com/US-Locomotive-maker-EMD-plans-to-set-up-india-plant/Article1-587668.aspx

The world's second-largest diesel locomotive manufacturer, Electro-Motive Diesel (EMD), said that its revenues in India have grown faster than it had anticipated and it will overtake China a year ahead of schedule. India is now EMD's largest market outside of the US. "Our revenues in India have almost doubled from $70 million to $125 million in the last two years, at a time when our overall business declined," said John S Hamilton, president and chief executive officer, EMD Inc. "Our worldwide revenues declined in the last two years but we seem to be recovering from the trough and should grow henceforth."

The company is part of a competitive bidding process along with bitter rivals GE for a public private partnership (PPP) project to set up a locomotive manufacturing project in Bihar, but Hamilton said it would now set up a manufacturing unit irrespective of whether it wins the bid or not.

"We have been contemplating on setting up a manufacturing base in India for quite sometime and now we are very clear that we have to do it," he said. "The PPP project in Bihar should hopefully drive us to establish a base in India but if it does not then we will look to put our own facilities."

The company has been a technology provider to Indian Railways for over half a century and with its revenues stagnating elsewhere in the world, it is looking to change its strategies in tune with those of the Indian Railways.

For example, the latter has aggressive plans of electrification, an area that is not EMD's forte. But while the US firm will not be drawn into a debate on whether electric locomotives are better, it is looking at renewing its interest in electrical engines.

"We have thought about this debate a lot and while electric engines are not exactly better than diesel from the environment point of view, we recognised that electrification does exist," Hamilton said.

Total investment in infra projects higher at 53%: RBI study - 15 Aug 2010 - newsystocks.com

http://newsystocks.com/news/3645348

Total investment in infrastructure projects was higher at 53 per cent of the cost of all projects in FY10 as against 45 per cent in FY09, according to a study on corporate investments by the Reserve Bank of India.

At Rs 2,95,805 crore, the total investment in the infrastructure sector, including power and telecom, represented more than half of the cost of all projects.

In FY09, total investment in the infrastructure sector was 45 per cent (or Rs 1,49,940 crore).

Led by rise in large-sized projects, the total envisaged cost of projects sanctioned assistance by banks/ financial institutions in 2009-10 at Rs 5,56,011 crore surpassed the previous high of Rs 3,33,039 crore in 2008-09.

Referring to the recent improvement in business sentiments on the back of improved outlook on demand conditions, the study said this indicates that investment in 2010-11 can be maintained around previous year's level given the continued thrust on infrastructure by the government.

Revival in demand

“Outlook for demand continues to be a significant factor driving investment intentions….With industrial output exhibiting strong acceleration, particularly in recent months, there has been a significant revival in credit demand. With inventory cycle turning and order books picking up, the business sentiments have also improved,” said the study.

In FY10, the top five sectors that attracted robust investments include power (Rs 1,68,326 crore), telecom (Rs 1,17,689 crore), metal and metal products (Rs 1,12,732 crore), construction (Rs 47,636 crore) and mining and quarrying (Rs 14,009 crore).

Investment in the infrastructure sector in recent years was largely led by high value projects in power and telecom.

In each of the last three years, the share of expenditure pertaining to power projects in the total cost of all projects was at around 30 per cent. This reflects the predominance of investment intentions in the power sector. At the same time, the investment intentions in telecom projects appear to have re-emerged with their share rising to 10.2 per cent in 2008-09 and 21.2 per cent in 2009-10, the study said.

Corporates continued making fresh investment in metals and metal product sector with aggregate share in total project expenditure increasing to 20.3 per cent followed by projects in construction (8.5 per cent) and cement (3 per cent). The share of each of the remaining industry groups including food products, sugar, textiles, paper and paper products, coke and petroleum products, and hotels and restaurants, was less than 3 per cent.

The maximum number of projects sanctioned assistance in FY10 belonged to metal and metal products at 146 followed by infrastructure at 121 and textile at 82.

Investment intentions

While 66 per cent (or Rs 3,65,920 crore) of aggregate investment intentions were into 515 new projects, 26 per cent (or Rs 1,44,218 crore) of aggregate investment intentions were into 250 proposed investments for the purpose of expansion and modernisation.

Continued thrust on public-private partnership, according to the study, is a positive for stimulating investment, especially in power, telecom and construction projects given the growing demand in these sectors.

Kushinagar airport plan grounded, finds no takers - 14 Aug 2010 - Indian Express

http://www.indianexpress.com/news/Kushinagar-airport-plan-grounded--finds-no-takers/655711

A month after the state government backtracked on one of the most sought after public-private partnership projects in the health sector, private developers have ditched one of the government's most ambitious projects — an international airport at Kushinagar to attract foreign tourists to eastern UP's Buddhist circuit. No developer turned up to submit financial bids until the deadline of July 31 at Paryatan Bhawan in Lucknow.

On the basis of Request for Proposal document submitted by the interested developers, four developers were selected early this year and all four were big names — the GMR Group which has undertaken upgradation of the Indira Gandhi International Airport in New Delhi, Larsen and Toubro, Gammon India Ltd, and GVK Power and Infrastructure Ltd.

No official in the Tourism Department is ready to explain the developers' lack of interest, but sources said the companies were not convinced about the feasibility of the project and did not see it as a profit-making venture for 10 to 15 years after construction.

Update on progress on Freight Corridor Project - 14 Aug 2010 - steelguru.com

http://www.steelguru.com/indian_news/Update_on_progress_on_Freight_Corridor_Project/160195.html

Mr K H Muniyappa state minister for railways informed lok sabha that Dedicated Freight State Corridor Project comprising Eastern Corridor Dankuni Ludhiana and the Western Corridor Jawaharlal Nehru Port Terminal to Tughlakabad/Dadri have been sanctioned by the government and are under implementation.

Dedicated Freight Corridor Corporation of India Limited a special purpose vehicle has been formed as a public sector undertaking of the ministry of railways to implement this project. Final location survey for the Western DFC and for Ludhiana Sonnagar section of Eastern DFC has been completed.

The report added that initial construction contracts for 105 kilometers in Eastern DFC and for 54 major and important bridges on Western DFC have been awarded and work is in progress. Negotiations for external funding are in progress and funding for Phase I of Western DFC is tied up with Japan International Cooperation Agency. A part of the Eastern DFC is also proposed to be funded through domestic investment in the Public Private Partnership mode. The project is targeted to be completed in 2016-17.

The base cost of Western DFC from Jawaharlal Nehru Port Trust near Mumbai to Dadri near Delhi and Eastern DFC from Dankuni to Ludhiana is estimated at approximately INR 42,231 crore. This excludes escalation, contingency, PPP element, taxes and interest during construction. Steps taken by ministry of railways to expedite the project include tying up adequate funds, fixing timelines for critical stages and close monitoring.

** Builder backtracks on approved projects - 14 Aug 2010 - Times of India

http://timesofindia.indiatimes.com/city/bangalore/Builder-backtracks-on-approved-projects/articleshow/6307811.cms

How often does a developer get all the regulatory approvals for blockbuster projects and then decides not to implement them? Quite unheard of, actually. But that's exactly what's happening around Metro's Swastik station in Malleswaram.

Mantri Developers has submitted proposals and got approvals to build two large complexes on land that was originally notified for acquisition by the BMRC for the Metro project in Malleswaram. Now under Public-Private Partnership (PPP) that Mantri group has entered into with BMRCL, a metro station is being built at the site along with a residential tower of 34 floors and commercial tower of 18 floors. Both these buildings will have three basements each. On this five acre plot, the metro station will come up on two acres of land. Mantri's been allowed to build these projects in lieu of the land given to the Metro.

Approval for these towers has been granted by BBMP as well as the fire department. However Sushil Mantri, chairman and MD of Mantri Developers told TOI, "We have no other plans apart from the Metro station right now.'

The twin projects have aroused a lot of interest among residents in Malleswaram as the traffic situation in the vicinity of the project has been exacerbated by the opening of the hugely popular Mantri Mall. In fact, next to the mall, there's already another Mantri residential project.

According to BBMP, the project proposal was approved when Bharat Lal Meena was the commissioner. When contacted, Meena confirmed saying, "Yes. A part building approval was given for the complex. But, that was in accordance with the permissible FAR and also depending on the road width.''

Fire force director (technical) B G Chengappa said that the department had cleared the project. "There are three buildings in it. The commercial tower will stand 18 floors above the ground floor, the residential building will have 34 floors above the ground floor. Both the buildings will have three basements each and a ground floor. While the commercial tower is 79.45 meters, the residential complex will measure 112.95 meters,'' he said.

This makes Mr Mantri's comments to TOI that he's not developing these two projects even more intriguing.

The other party involved, BMRC MD N Sivasailam made it very clear to TOI: "BMRC is involved only in the station. This also includes the commercial complex above the station platform and the alternate road arrangement for traffic management that's being taken up by the BBMP. This is less than two acre of the total five acre land. The other complexes, if any will not come under our purview. That land is not ours so how can we have a say in it?''

The project needs clearance from Karnataka State Pollution Control Board. Its chairman Sadashivaiah said that it had not come to them yet. "All the railway projects are out of our purview. However, the other two buildings have to get clearance from us,'' he added.

As local residents are concerned about the traffic congestion of the projects, TOI spoke to additional commissioner of police (traffic), Praveen Sood. He was not aware of these developments. "I am hearing it for the first time. If such a plan comes up, those developing the project will have to show supporting plans to ensure smooth flow of traffic,'' he added.


 

Orissa Government submits proposal before central panel over Petro-Chemical project - 14 Aug 2010 - orissadiary.com

http://orissadiary.com/CurrentNews.asp?id=20565

Report by Orissa Diary correspondent; Bhubaneswar: A team lead by industries secretary Sourav Garg has submitted a the revised proposal before the high level committee (HLC) headed by the Union cabinet secretary for setting up of the proposed Petroleum, Chemicals and Petro-Chemical Investment Region (PCPIR) at Paradeep, in Jagatsinghpur district. Atleast 15 secretaries of various departments associated with the project were present in the high-level meeting. The cabinet secretary has given its green signal for the project after the presentation.

While the Orissa government and the Union government will share the cost, most of the infrastructural projects will be taken up in public-private-partnership (PPP) mode.

The project would be spread over an area of 110 square kilometres and is expected to attract investment to the tune of Rs 2, 75, 000 crore. The proposed project would come up in the Kujang-Ersama-Marsaghai area.

“Land acquisition by IDCO has almost been completed. The land will be acquired for the infrastructure development which includes the development of roads, port, airport, hotels, logistic park, townships and other social infrastructure,” IDCO CMD Priyabrata Patnaik said.

For this project, state would contribute Rs 2700 crore towards the development of infrastructure and 110 sq km of area required for the project. This apart, the centre would contribute Rs 5008 crore towards the infrastructure and another Rs 7,515 crore would come in the shape of PPP model.

 

** PPP in education must focus on Long-Term social returns - 14 Aug 2010 - indiaeducationdiary.in

http://indiaeducationdiary.in/Shownews.asp?newsid=3750

Bangalore: "Redefining the quality of education, improving delivery standards, and looking for social returns, rather than quarterly economic returns, are important for achieving success in Public Private Partnership (PPP) in education," said Mr Anurag Behar, CEO, Azim Premji Foundation.

Addressing the Plenary Session on PPPs in Education and Healthcare at Suminfra 2010, a two-day summit on sustainable PPPs in infrastructure, being organised by the Confederation of Indian Industry (CII) here today, Mr Behar said that the primary purpose of private sector in PPP projects in education should aim at long term social returns in terms of producing truly smart people to enhance the competitiveness of the Indian industry.

He said that the private players who enter into education with the sole objective of making profits, largely end up either exiting the venture or cutting corners by compromising on quality of service delivery. Mr Behar pointed out that considering the economics of education sector, it is not possible for running it for profit. "None of the higher education institutions and universities in the West – including MIT, Harvard and Yale – are able to sustain their operations without the help of very large endowments," he said.

Mr Sanjay Rai, Sector Head for Urban Infrastructure, Healthcare and Education, Axis Bank, in his address, said, "Over regulation, governance issues related to educational trusts, land acquisition and scalability are some of the key factors that impacts Public Private Partnership (PPP) projects in education in India. While weak corporate governance of trusts and security structure hinder the participation of debt funding, the no-profit nature of the industry structure and lack of a model for scalability affect the participation of equity players from funding PPPs in education."

Mr Rai said that the education sector is strategically critical for the country that attracts strong public interest. The demand supply gap in this capital intensive sector with long gestation period is very high. India has one million schools and over 18,000 higher education institutions. The country spends close to 4% of its GDP in education said Mr Rai.

In his address Mr Bhanu Mehrotra, Operations Officer, PPP Transactions Advisory, International Finance Corporation, World Bank Group, said that there is a need for new, scalable models for PPP in healthcare as the existing PPP models evolved by NGOs and CSR initiatives of corporates do not prove to be sustainable and profitable. PPPs can be tried out in non-clinical services, management contracts, infrastructure development, clinical services and full fledged healthcare management.

Mr Mehrotra said that factors such as inadequate infrastructure, inadequate utility of existing infrastructure, inadequate supply of specialised, technical staff and rising costs are daunting the healthcare delivery system in India.

In his address Mr Vikesh Mehta, Head, Advisory Practice, Grand Throton, said that managed equipment services - where public hospitals transfer the entire risk of managing all medical equipment to private player, is turning out to be a booming area in PPP in healthcare worldwide. He said that the private player will be the sole interface for negotiating with suppliers, replacement and ensure value for money.

"In the long run, government should play the role of a regulator ensuring efficiency, effectiveness and equity in the provision of healthcare services," Mr Mehta said and pointed out that in 2008, the total value of economic transactions in healthcare sector in India pertaining to in-bound, out-bound investments and mergers & acquisitions have been to the tune of US$ 6 billion, while in the first five months of 2010, it has become US$ 5 billion.

Earlier Mr P V Ravi, Managing Director, Infrastructure Development Corporation Limited, provided the introductory remarks.

** Kerala offers huge opportunity for PPP investments in infrastructure development - 14 Aug 2010 - orissadiary.com

http://www.orissadiary.com/ShowBussinessNews.asp?id=20550

Bengaluru: “There is tremendous opportunity for Public Private Partnerships (PPP) in infrastructure development in Kerala, which has high infrastructure index and rated top in terms of investment climate with a large pool of trainable man power, lower wages, rentals and power & water tariff”, said Dr G C Gopala Pillai, Managing Director, Infrastructures Kerala Limited (INKEL).

Addressing the Session on State Integrated Infrastructure Promotion – Kerala, at Suminfra 2010, a two-day summit on sustainable PPPs in infrastructure, being organised by the Confederation of Indian Industry (CII) here today, Dr Pillai said that Kerala offers stable socio-political environment, high interest from non-resident Keralites on industrial development and decentralised governance. The government is focusing on promoting PPPs in transport, urban development, tourism, and sanitation. The government is keen to accelerate the growth of services sector, bring in higher productivity, giving boost to electronics, Information Technology, and healthcare, besides converting Kerala into a word class commercial hub.

In his address Mr S Ramnath, Managing Director, Kerala Industrial Infrastructure Development Corporate (KINFRA) listed the major infrastructure development projects that the government is taking up with the possible inclusion of private investment. Some of those projects include: Aerotropolis at 450 acres, 1300 MW Kasaragod Thermal Power Station at the cost of Rs 12,500 crores, Rs 350 crore Ocenarium Project at Cochin, High Speed Rail Corridor which is envisaged to connect Thirvannathapuram and Kasaragod at the cost of Rs 50,000 crore, Pravasi Gramam, a 350 acre culture zone to be developed at the cost of Rs 750 crore, Life Sciences Park at Kazhakutton to promote biotechnology and nano-technology industries, Industrial Corridor covering 5000 acres of land at Cochin-Coimbatore stretch and Electronic Hub of Rs 400 crore that is expected to be completed in 2013.

Mr Ramnath said that the KINFRA has completed study on a number of industry and infrastructure development projects including: electronic high way at Aroor-Edapally, sustainable development zone at Kochi, medicity at Koratty, healthcare village at Kannur, eco-solutions park at Kozhikode, padmasarovaram park at Kozhikode, handloom village at Kannur and ring roads in all districts.

Earlier, Mr P Ganesh, Chairman, CII Kerala State Council and Executive Director, Glass & Glazing Systems Pvt Ltd delivered the introductory remarks.

**Kerala invites bids to develop Azhikkal Port - 12 Aug 2010 - steelguru.com

http://www.steelguru.com/indian_news/Kerala_invites_bids_to_develop_Azhikkal_Port/159855.html


Close on the heels of Ponnani port, the Kerala Government has invited global bids for the development of yet another port, Azhikkal in Kannur district as a public private partnership project.

Azhikkal is one of the six among 17 notified ports identified by the State Government for development through the PPP route. Azhikkal is one of the oldest ports in the state and is located midway between the major ports of Mangalore and Kochi.

The development of the port is expected to catalyze the development of the north Malabar region as also the Coorg region of Karnataka. The development of the port has been pending for more than a decade and the first project report was prepared by ICICI-Kinfra a joint venture between ICICI and the state owned Kerala Industrial Infrastructure Development Corporation in association with Howai India.

The ocean study was done by L&T Ramboll. The proposal was for the creation of berthing and allied facilities for cargo and container ships and a ship-repairing yard. An oil jetty, dry dock and facilities for cruise liners also were also parts of the project. The Government, a couple of years ago, appointed Deloitte India Ltd. to rework the project in the light of a Union Government proposal to include the port in the National Maritime Development Program. Though the project report is ready, the Central proposal has remained on paper even after two years, which prompted the Government to take up the project through the PPP route. The total cost was originally estimated around INR 1,750 crore. The project was to be implemented in modules with construction of berthing and related facilities to be taken up in the first module. The Government has already spent INR 20 crore during the past four years for developmental activities.

(Sourced from BL)

** All States to get National Law Schools - 12 Aug 2010 - The Hindu

http://www.hindu.com/2010/08/12/stories/2010081257762200.htm

NEW DELHI: Every State in the country will have a world class law school to provide “justice-oriented legal education essential to the realisation of values enshrined in the Constitution.”

Drafted by the Union Law Ministry, the National Law Schools Bill, 2010 intends to establish national law schools, institutions of excellence in the field of legal education and research, in every State where no such school exists.

These will be in addition to the five Centres for Advanced Legal Studies and Research being planned in the five regions to carry out cutting-edge research in various aspects of law with a thrust on new and emerging areas.

Though the Bill provides for public-private partnership in the establishment and functioning of the schools, the central body of the schools — the Council — is dominated by government representatives. The Council is proposed to be chaired by the Union Law and Justice Minister.

The other members will be the chairpersons and directors of all the National Law Schools; chairman of the University Grants Commission; secretary-general of the International Centre for Alternative Dispute Resolution; director of the Indian Law Institute and the National Law University; three persons nominated by the Central government from the Ministries of Law and Justice, Human Resource Development and any other ministry.

In addition, there will be a representative from the Bar Council of India, three to five persons nominated by the President from the field of law, three Members of Parliament – two from the Lok Sabha and one from the Rajya Sabha.

To be named after the State it is established in, the Centre and the State government will have concurrent responsibility of providing funds for setting up these institutions. The Centre will provide grant-in-aid to the States while the States will ensure acquisition of land required.

The funds given by the State governments for land acquisition will be considered as part of State's share towards the overall cost of setting up of schools.

The State government may, if it considers necessary, evolve and operationalise public-private partnership for the smooth functioning of the school.
The public-private partnership will draw a partnership agreement clearly defining the expectations, mutual responsibilities, technical cooperation and reciprocity of benefits.

As per the draft Bill, the schools will prepare professionals equipped to meet the challenges and dimensions of internationalisation; and to seek path-breaking legal research to create new legal knowledge and ideas to help meet the emerging challenges in a manner responsive to the needs of the country and ideals and goals of the Constitution.

With the Chief Justice of the High Court of the State concerned as the Visitor, each school will have a Board of Governors, and a Senate. The Board of Governors will be responsible for the general superintendence, direction and control of the affairs of the school and take decisions regarding administrative policies.

** Private Investment in infra expected to go up - 12 Aug 2010 - Deccan Herald

http://www.deccanherald.com/content/88162/private-investment-infra-expected-go.html

The government is expecting private participation in infrastructure projects to go up to USD 182 billion in this five year plan at an outlay of about USD 500 billion for infrastructure, a top L&T official said today. Compared to the sector's contribution in the 10th five year plan, which was about 25 per cent, the expected contribution to the 11th plan is more than one third, President (Operations) Larsen & Toubro and Chairman Suminfra 2010 J P Nayak said.He was speaking at Suminfra 2010, the eighth edition of the two-day annual summit on sustainable public private partnerships in infrastructure organised by CII here today.

Public Private Partnership investment in infrastructure far exceeds participation said Vinayak Chatterjee, Chairman, CII National Council on Urbanisation and Future Cities, and Chairman of Feedback Ventures Ltd, adding that private investment is expected to increase to 36 per cent in the 11th Five Year Plan from 25 per cent in 10th Five Year Plan.

Chatterjee said average Gross Capital Formation in Infrastructure (GCFI) as a percentage of GDP, a measure to evaluate the performance of infrastructure development, is expected to increase to 10 per cent in the 12th Five Year Plan (2012-2017) from 5.5 per cent average of 10th Five Year Plan. He said India is expected to become the biggest destination of PPP projects. As per independent estimates, India is expected to achieve 84 per cent of its infrastructure project targets of the 11th Five Year Plan. he added.

However, the country needs to correct imbalances in the performances of infrastructure sectors – "the growth rate of infrastructure projects in areas of electricity, transport, water supply and sanitation could grow only at about 65 per cent as against the growth rate of infrastructure projects in the areas of telecom, airports, oil & gas, and irrigation, which is about 134 per cent," Chatterjee said.
 

** ADB 150 mln dollar loan to help India improve its urban infrastructure - 11 Aug 2010 - sify.com

http://sify.com/finance/adb-150-mln-dollar-loan-to-help-india-improve-its-urban-infrastructure-news-news-kilqOfdfdbi.html

The Asian Development Bank (ADB) is extending a 150 million multi-tranche financing facility to help India's National Capital Region (NCR) accelerate plans to build urban infrastructure.

ADB's Board of Directors approved the India National Capital Region Urban Infrastructure Financing Facility, which will provide funds in two or more tranches. It will extend long-term finance for improved urban services, while helping to encourage private investor interest, and support for a regional rather than city-centric approach to development.

India's economy has been growing at one of the fastest rates in the world in recent years, fuelled by its booming cities, but municipal governments have struggled to keep pace with the demand for services because of financing and capacity constraints. In the NCR, which incorporates Delhi and subregions of three states, the population is expected to almost double to 64 million by 2021 from 37 million now, and the NCR Planning Board has notified the Regional Plan 2021 that it has identified investment needs in transport, power, water and solid waste totaling about 43 billion dollars.

The financing facility will allow the NCR to accelerate its planned investments by providing long-tenure funds. It will identify bankable projects, extend capacity-building assistance for sub-borrowers of the funds to design and execute high-quality infrastructure, and help attract private investors and public-private-partnerships into the sector. The impacts will be improved health and economic well-being for millions of urban residents.

Infrastructure planning in India's cities is often narrowly focused but the NCR Planning Board's Regional Plan seeks to take a broader approach, providing more comprehensive and environmentally-friendly development that can reduce negative aspects of urbanization such as pollution, slums and traffic jams.

"A regional approach is more proactive, enabling systematic and inclusive urbanization and sustainable growth and this is the basis of the NCR Planning Board's business plan and one of the primary motivations for the new financing facility," said Sekhar Bonu, Principal Urban Development Specialist in ADB's South Asia Department, noting that a strengthening and transformation of the Planning Board will help it to become a model for other state-level urban sector institutions to emulate.

The first tranche loan of 78-million dollar will have a 25-year term, including a 5-year grace period, and an annual interest rate determined in accordance with ADB's LIBOR-based lending facility. An additional 50 million dollar will be provided by the NCR Planning Board for targeted investments. The Planning Board is the executing agency for the investment program, which is expected to be completed by June 2017. (ANI)

** GE, Siemens in race for electric locomotive unit - 11 Aug 2010 - Business Standard

http://www.business-standard.com/india/news/ge-siemens-in-race-for-electric-locomotive-unit/404206/

Leading manufacturers of railway rolling stock like GE, Siemens, Alstom and Bombardier have been shortlisted for setting up a Rs 1,960-crore electric locomotive manufacturing unit at Madhepura in Bihar. The facility, to come up on the public-private-partnership (PPP) mode, will roll out 120 IGBT (insulated gate bipolar transistor) electric locos of 12,000 horse power every year.

GE, Siemens, Alstom and Bombardier have been selected for the first stage of bidding to set up the factory at Madhepura. We expect the project to be awarded by the end of the year,” said a senior GE executive on condition of anonymity. Railway officials said efforts were on to expedite the bidding process so that the unit could become operational in three years.

At the same time, they are considering applications for setting up a diesel locomotive manufacturing unit at Marhowrah, also in Bihar’s Chhapra district. The railway ministry expects the Rs 2,720-crore unit will manufacture 130 diesel locomotives every year.

The overall investment envisaged for setting up both the facilities and manufacturing rolling stock units at Madhepura and Marhowrah is estimated to be Rs 29,000 crore. The ministry would procure 1,000 units each of electric and diesel locomotives from the two facilities over an eight-year period.  The railways had floated tenders for setting up both the facilities in April 2008. On receiving one non-compliant bid each for both the units in February 2009, the ministry had resolved to establish the factories as departmental production units.

The four companies were shortlisted even that time for the electric loco unit. GE and US-based EMD were shortlisted for the diesel loco plant, though GE was the only one to put in the final bid. The private sector entities entrusted to set up the units would be responsible for maintaining the locomotives for a period of 25 years.

The factory at Marhowrah was approved in 2006 and that at Madhepura in 2007.

A senior official at the ministry informed, “Due to the slowdown last year, we had received feeble response from potential bidders. Initially, the projects were considered to be set up as production units of the railways. Consequently, Railway Minister Mamata Banerjee gave a go-ahead to put the units on the PPP basis.” Both the factories were envisaged for commissioning during the current five-year Plan period (2007-12). They are now slated for commissioning by 2013.

Low budgetary allocations for the projects have raised concern from industry experts. Of the Rs 2,720 crore required for setting up the Marhowrah factory, Rs 29 crore — just over one per cent — has been provided till date. Another Rs 667 crore is to be raised from private sector entities. The remaining resources have to be provided by the ministry.

Similarly for the Madhepura unit. Of the total requirement of Rs 1,960 crore, Rs 63 crore — about 3 per cent — has been made available by the ministry, while Rs 667 crore is to be raised on PPP basis.

** PPP model for urban development projects best: govt - 10 Aug 2010 - Business Standard

http://www.business-standard.com/india/news/ppp-model-for-urban-development-projects-best-govt/104659/on

The Government today emphasised on the importance of Public-Private-Partnership (PPP) model for urban development, saying the approach is best suited for the infrastructure sector.

"It (PPP) supplements scarce resources, creates a more competitive environment and helps improve efficiencies and reduce costs," Minister of State for Urban Development Saugata Roy said.

The Government today emphasised on the importance of Public-Private-Partnership (PPP) model for urban development, saying the approach is best suited for the infrastructure sector.

"It (PPP) supplements scarce resources, creates a more competitive environment and helps improve efficiencies and reduce costs," Minister of State for Urban Development Saugata Roy said.
 

** 3 Indian Projects amongst top 100 most interesting Infra projects globally ! - 09 Aug 2010 - trak.in

http://trak.in/tags/business/2010/08/09/top-3-infrastructure-projects-in-india-100/

One of the biggest hurdles in India’s ability to play a catch-up with the scorching pace of growth logged by China has been its infrastructural bottlenecks. In order, to tackle with this problem – India needs to fasten up its infrastructure investment dramatically.

It is estimated that the Infrastructure sector in India would require an investment of around $500 billion by 2012. The finance requirements for these infrastructural projects can be supported through various funding options such as project finance, corporate finance or even the larger debt market.

Over here, I want to highlight that, though India still needs to consolidate on the infrastructural front, smaller strides have already been made in terms of various public-private partnership (PPP) models across the country.

Additionally, a transparent and secure environment for business and foreign investment has prevailed over the last many years. And, that India’s fate no longer lingers at the sole anvil of the governmental push to the infrastructure – though it still remains a major contributor to the infrastructure investment in the country.


KG-D6

For the uninitiated, Krishna Godavari (KG) basin is India’s largest gas field situated in the Bay of Bengal on the east coast with a high production potential.

The D-6 block of the KG basin is operated by Reliance Industries on its discovery of the biggest natural gas reserves in India. The KG-D6 gas field is one of the top five largest deepwater gas projects globally. New domestic supplies from the KG basin have visible positive impact at the macro level and are expected to give a fillip to gas-consuming industries.

KPMG said,

“KG-D6 project not only sets new standards in integrated gas infrastructure projects but it also launches an innovated approach to the sale of transportation of energy, helping to accelerate India’s economic growth.”

In a major achievement in country’s energy security, the gas production has helped prime utility industries such as power and fertilizers. The gas supplied to power units has helped in generating additional power at a reduced cost and revived stranded power plants in many instances, thus leading to optimum plant load factor. Consequently, Government has also also been able to save subsidies on urea production.

Mundra Power Project
Another mega-project that has found its  mention in the elite list of 100 infrastructure projects by KPMG is Mundra power project. Mundra is the flagship plant of Adani Power, an ancillary of the Ahmedabad-based Adani Group. It is the country’s largest and world’s third largest super-critical technology-based thermal power plant.

More recently, the company has successfully synchronized the third unit of 330 Mw at its Mundra with the grid – which has led to achieving of power generation capacity of 990 Mw. The first unit of 330 Mw became operational last year and the second one at the beginning of this year.

All the three units are the part of Adani Group’s 4620 Mw coal-fired power project at Mundra – which is core to India’s plans towards continuing economic development through energy efficient plants. Mundra power project is one of the nine ultra mega power projects to be initiated in India.

The UNFCCC has certified the coal-based thermal power plant at Mundra as the first Clean Development Mechanism project in the world. Super-critical coal-fired power plants are highly efficient compared to prevailing lot of sub-critical ones being operated in the country.

IGI Airport
Lastly, even the IGI Airport Expansion at New Delhi, delivering a world-class facility, has notched a place among the top 100 infrastructural projects globally in terms of their sheer scale, complexity and innovation.

The in-line baggage handling system has a capacity to handle 12800 bags per hour. The swanky new terminal-3 of the IGI airport was built in a record 37 months at the cost of $3 billion. The T3 would provide seamless connectivity to the international and domestic passengers with world class experience, once the full service carriers shift their domestic operations at this month end.

A multi-level car parking facility, with a capacity of 4300 cars, in front of the terminal building will enable the authorities to keep at bay the airport’s parking woes – this, over and above a separate surface parking area for 2200 cars. The new complex terminal has six common check-in islands, 168 check-in counters, 63 elevators and 34 escalators.

“The IGI Airport Expansion in New Delhi was upgraded and modernised while still functioning, delivering a world-class facility, which is also being turned around in record time,” KPMG said.

** Railways have 327 ongoing projects - 9 Aug 2010 - constructionweekonline.com

http://www.constructionweekonline.in/article-6714-railways_have_327_ongoing_projects/

Railways have about 327 ongoing projects under new lines, gauge conversions and doublings across the country with a huge throw forward of about Rs98,000 crore as on April 1, 2010, Minister of State for Railways, E Ahamed.

Railways have about 327 ongoing projects under new lines, gauge conversions and doublings across the country with a huge throw forward of about Rs98,000 crore as on April 1, 2010, Minister of State for Railways, E Ahamed.

He said that due to limited availability of resources, projects have long gestation period. “The targets for the projects are generally fixed on yearly basis based on the availability of resources and the progress made. Many of the projects get completed in phases. The main reasons for delay have been paucity of funds, delay in land acquisition and forestry clearance, failure of contracts and contractors, adverse law and order conditions and other market forces affecting the progress, he added.

Ahamed said that ongoing projects undergo cost escalation on account of delays as above and change in the standard of construction and technology, scope of work, inflation etc. “No fixed time frame for completion of all the projects is feasible in such a scenario. So far about Rs 36,000 crore have been spent on these projects. There are no projects for which funds have not been sanctioned for the last two years,” he added.
To expedite completion of projects, he said, a number of initiatives have been taken to generate additional resources through non-budgetary measures like Public-Private Partnership, funding by State Governments and other beneficiaries.

“Besides, to reduce delays on account of land availability, security issues and forestry clearances, etc. meetings with State Officials are held from time to time. Contract conditions have been modified to bring in efficiency in contract management, and field units have been further empowered,” he added.

** GMR and MACL hold workshop on upgrading airport - 09 Aug 2010 - minivannews.com

http://minivannews.com/politics/gmr-and-macl-hold-workshop-on-upgrading-airport-10168

GMR and Maldives Airports Company Limited (MACL) have held a joint two-day workshop with senior staff at Male’ International Airport to collect ideas on how to improving the facilities and upgrade the airport, prior to the construction of the new terminal.

The Indian infrastructure giant won the management contract to upgrade the airport build the new terminal by 2014, following a bidding process that was criticised for its fast speed and alleged lack of transparency. Opposition parties also opposed the privatisation of the airport on nationalistic grounds.

Chairmen of MACL ‘Bandhu’ Ibrahim Saleem said that the workshop was very useful and that the two parties had managed to collect constructive opinions from customers and staff on how to improve the services and facilities provided by the airport.

‘’It is a necessary task to upgrade the international airport,” Saleem said. “We are very confident with GMR, we have witnessed three airports developed by them under public private partnerships.’’

GMR Manager P Sripathi said that the paperwork was almost concluded and that the company needed only final approval for some documents.

‘’We know there will be a lot of complaints from different areas of the airport, but one by one we will sort out all the issues eventually,’’ said Sripathi. ‘’We are just in the final stages of forming the airports company.’’

When journalists present at the meeting queried about the different issues being encountered, senior officials on the panel recommended focusing questions “only on the subject of the workshop.”

The GMR-Malaysia Airports Holdings Berhad (MAHB) consortium won the controversial bid to develop Male’ International Airport and will spend US$373 million on the upgrade.

Speaking at the opening of the cavernous Delhi Terminal 3 recently, GMR Manager P Sripathi told Maldivian journalists that physical work would begin on the airport towards the end of this year.

“The first phase is organising the finances and transitioning the airport from a government-run enterprise to a privately-run enterprise,” he explained.

“The transition will be a new thing [for the Maldives] and we will be there to help with that. We have done such things in other places, and we know how to go about it,” he said.

Male International Airport will remain as a property of the Maldivian people under the leasing agreement with GMR, said the former minister of civil aviation and communications Mahmood Razee recently in a local news paper Miadhu report.

Opposition political parties has repeatedly expressed concern and called on the government not to lease the Male’ Inernational Airport to a foreign company, claiming it could disrupt the national securit and harm the peace and harmony of the country. However, the government dismissed the claims, alleging vested interests on behalf of certain opposition leaders.

Shipping Ministry to award 25 port projects this fiscal - 09 Aug 2010 - Business Standard

http://www.business-standard.com/india/news/shipping-ministry-to-award-25-port-projects-this-fiscal/104353/on

Shipping Ministry would award 25 port projects of about Rs 800 crore under the 'Public Private Partnership' (PPP) scheme during the current financial year. "We would award 25 PPP port projects in the current fiscal," a Shipping Ministry official said, adding that the collective value of these contracts would be about Rs 700-800 crore.

Two of these projects at Paradip and Ennore near Chennai have already been awarded to Sterlite-Leighton and Eredene Capital consortium, respectively. These projects also include creation of mega container terminal or bulk transshipment at Chennai Port, New Mangalore Port and conversion of berth for container terminal at Tuticorin port. Installation of three mechanised handling facilities at the Vizag port in Andhra Pradesh.
Development of the two eastern wings or keys at the Vizag Port. Creation of container and container terminal at Jawaharlal Nehru Port Trust (JNPT) and construction of two riverine jetties at Kolkata Port. Jetty is a protective structure of stone or concrete; extends from shore into the water to prevent a beach from erosion.

These 25 PPP projects also include development and operation of two berths at Indira dock as dry bulk cargo terminal in Bombay and development and operation of a dry commercial cargo at Mumbai Port. The government may also award an international cruise terminal at Cochin, he added.

There are 12 ports in India -- Kolkata (with Haldia), Paradip, Visakhapatnam (Vizag), Ennore, Chennai, Tuticorin, Cochin, New Mangalore, Mormugao, Mumbai, Jawaharlal Nehru Port Trust and Kandla -- which handle over 500 million tonnes of cargo annually.

** Trains on Metro Airport Express Line to run at 120 kmph - 08 Aug 2010 - Economic Times

http://economictimes.indiatimes.com/news/news-by-industry/transportation/railways/Trains-on-Metro-Airport-Express-Line-to-run-at-120-kmph/articleshow/6274824.cms

NEW DELHI: Trains on the showcase Airport Metro Express line in Delhi will run at a speed of 120 km per hour, for which a consortium led by Reliance

Infrastructure is imparting training to drivers, including psychological profiling to test their emotional stability.

The Airport Express Line, which will be run by Delhi Airport Metro Express Limited led by Reliance Infrastructure, promises to take passengers from Connaught Place to the IGI Airport in 20 minutes and will be thrown open to public by September, a month before the Commonwealth Games.

India's first Metro line to come up on a public-private -partnership mode, the 22-km corridor will have City Airport Terminals at three stations from where passengers can directly check-in. The ticket rate from Connaught Place to airport has been fixed at Rs 150.

With just little over a month left for commissioning of the line, the company is imparting special training to 24 drivers as they have to operate trains at a speed of 120 km per hour, which will be a first in India. Metro trains in Delhi run at an average speed of 35-40 kms per hour.

The candidates are now being trained with the help of simulators procured from Spain and the signalling simulator procured from Siemens in Germany, an official spokesperson of the company said.

** Centre rejects State plea on rail link to BIA - 7 Aug 2010 - Deccan Herald

http://www.deccanherald.com/content/86970/centre-rejects-state-plea-rail.html

The Centre has rejected the Karnataka Government’s request for equity participation in the proposed high-speed rail link between the Bangalore city centre and the Bangalore International Airport (BIA).


The State government had approached the Civil Aviation Ministry seeking equity participation from the Airport Authority of India (AAI) in the project. The plea was rejected due to AAI’s other financial commitments, a senior official in the ministry told Deccan Herald.

“The ministry has asked the Karnataka Government to build the project as a totally state-sponsored project,” said the official.

While approaching the Centre, the State had said that considering that the high-speed rail link is also part of the airport project, the AAI can participate in the project by investing around Rs 500 crore.

However, the Centre has promised the State that it will give viability gap fund (VGF) for the project which is 20 per cent of the total project cost (around Rs 1,200 crore).
The Centre is studying the State government’s proposal and a high-power committee comprising Union ministers headed by Prime Minister Manmohan Singh will take a decision soon, said the official.

Land notification soon

The Karnataka Government is planning to build the high-speed rail to connect the city centre to the BIA at a cost of Rs 6,000 crore. The Karnataka Industrial Areas Development Board is likely to issue a preliminary notification to acquire land soon.
The high-speed rail will start from BRV Grounds. It will have two stops—at Hebbal and Yelahanka—before reaching BIA. It is expected to cover the 34-km distance in less than 25 minutes.

The State Government has shortlisted five consortia for executing the project under public-private partnership. The final concessionaire is expected to be appointed in two months. The construction is likely to begin in January 2011.

The short listed consortia are: Reliance Infrastructure and CSR Nanjing Puzhen Rolling Stock Company of China, Larsen & Toubro and Transco Ltd, ITD-ITD Cementation joint venture (Italian–Thai Development Public Company and ITD Cementation India Limited), Pioneer Infratech and Siemens Project Ventures Gmbh and Lanco Infratech and OHL Concesiones of Spain.

** Time for action - 07 Aug 2010 - Economic Times

http://economictimes.indiatimes.com/opinion/editorial/Time-for-action/articleshow/6268742.cms

Prime Minister Manmohan Singh has appointed yet another panel of wise men to look into power transmission and distribution losses of over Rs 40,000 crore per annum. Considering the wealth of expert reports, reviews and status reports that we have accumulated over the last 20 years of putative power sector reforms, what is clearly required now is concrete action on the ground.

What’s plain is that aggregate technical and commercial losses in power distribution are much too high. The huge leakages are due to inadequate investment in line capacity, dated transformers, the lack of metering and the like, but mostly due to open theft of electricity and its political patronage. Fortunately, reforming states like Gujarat have demonstrated political and administrative will to stem losses in power distribution including in rural areas, and boost the quality of supply in the process.

Under Gujarat’s Jyotigram programme, there’s separation of feeder lines: a heavy-duty one for tubewells and a light-duty one for domestic use and small-scale manufacturing and services. The idea is that consumers get 24×7 power supply for non-agricultural purposes, enhancing both domestic and commercial possibilities. But tubewell power is restricted to eight hours, providing enough water for crops, thus avoiding over-pumping from aquifers and attendant misuse . The dual-feeder system does cost extra: under the scheme, panchayats are required to pay 30% of the estimate cost or Rs 25,000, whichever is more, with the balance 70% met by the state government.

It’s public-private partnership all right, and the electricity utility in Gujarat is one of the very few profitable ones. Reportedly, the total investment for Jyotigram was about Rs 1,500 crore for the entire state. We surely need to scale up the programme pan-India . In tandem, theft of power needs to be declared a criminal, and not merely a civil, offence, and the law duly enforced. The prime minister’s office can help in two areas: making the financial accounting of state utilities transparent and public, putting an end to populism and giveaways in the power sector.

** Bellary airport now closer to take-off - 07 Aug 2010 - Times of India

http://timesofindia.indiatimes.com/city/bangalore/Bellary-airport-now-closer-to-take-off/articleshow/6268783.cms

BANGALORE: The state government on Friday signed the project development agreement with Chennai-based infrastructure firm, MARG, to build Bellary airport.

After the PDA signing here, tourism and infrastructure development minister G Janardhana Reddy told reporters that the public private partnership (PPP) project would be spread over 900 acres with MARG developing and running the operations on build, operate transfer basis. The time frame for completion is 30 months. The state’s contribution would be in the form of land, which will be acquired at Rs 110 crore.

MARG managing directorG R K Reddy said that they would be investing Rs 230 crore, with Rs 110 crore in the initial phase. In the initial phase, only the smaller capacity aircraft such as ATR -42 and ATR 72 would be able to fly to Bellary. The expansion would allow landing of larger Airbus and Boeing planes.

Hampi-by-night
Hampi-by-Night, the evening heritage walk, will be between 6 pm and 9 pm. The project, which includes setting up of four different audio-visual facilities besides illumination, is coming up at Rs 16 crore. It is expected to be complete by three months. The minister said the development works were being implemented at a cost of Rs 80 crore in Hampi and it included buying 80 battery-operated cars to transport tourists to prevent pollution. Horse-drawn carts would also be introduced in Hampi.

INDUSTRIAL PARK
The Vijayanagara Development Authority has drawn up a plan to establish an industrial park at 500 sq km near Bellary. Among other facilities, this includes industrial development on 40,000 acres of land and development of townships on 10,000 acres.

Terming this as his ‘dream project’, Reddy said the cabinet was likely to clear this proposal at its next meeting. He said that about Rs 2 lakh crores of investments would be made in Bellary district in the next couple of years with respect to the proposed steel city project.

ZOO at Karadidhama
The Zoo Authority of India (ZAI) has given clearance to set up a zoo at Karadidhama near Hampi. The Zoo would be set up on 1,000 acres of land at a cost of Rs 75 crore.

** Ministry okays Rs 1,54,512-crore investment proposal in 3 PCPIRs - 06 Aug 2010 - Business Standard

http://www.business-standard.com/india/news/ministry-okays-rs-154512-crore-investment-proposal-in-3-pcpirs/403731/

In a major boost for investment in the petrochemical sector, the Ministry of Chemicals and Fertilisers has approved a proposal of investments worth Rs 1,54,512 crore in three regions under its flagship petroleum chemicals and petrochemicals investment regions (PCPIR) policy.

Under the policy launched in 2007, this is the first status report on committed investments approved by an inter-ministerial high-powered committee last week. The investment includes Rs 44,812 crore for physical infrastructure development, and the rest is project-specific investments committed by various public and private companies in three PCPIRs — Visakhapatnam and East Godavari districts in Andhra Pradesh, Bharuch in Gujarat and East Midnapore in West Bengal. Investments in physical investments include a viability gap funding (VGF) by the finance ministry to the extent of 20 per cent in each PCPIR except for West Bengal. The VGF scheme provides financial support in the form of grants, one time or deferred, to infrastructure projects undertaken through public-private partnerships with a view to make them commercially viable


Sources added the high-powered cabinet committee will take up the approval of the Paradip port PCPIR in the second week of August. The PCPIR scheme is aimed at promoting investment in the chemical and petrochemical sector so as to make India an important hub for domestic and international markets.

The ministry has also taken the initiative of organising major trade fairs in Europe and Latin American countries like Brazil, Argentina and Mexico to attract foreign investment sector.

“The priority for this sector is to increase capacity so that the growing demand is met with domestic output,” said an official.

The Visakhapatnam and East Godavari PCPIR has received investment commitment of around Rs 73,000 crore through its main or “anchor” investors — a consortium of Hindustan Petroleum Corporation Ltd and GMR. The state government has committed Rs 2,132 crore for developing physical infrastructure followed by Rs 10,565 crore from private parties and another Rs 6,334 crore through public-private partnership. Besides the anchor investors, various companies with committed investments are ONGC (oil and gas exploration in KG basin), Rain Commodities, Continental Carbon India Ltd, Indian Strategic Petroleum Reserve Ltd, Velankani Chemicals, Air Liquide India, Southern Online Biotechnologies, Reliance Industries Ltd, Bharat Petroleum Corporation Ltd, Hetero Drugs, Baker Hughes, Gangavaram Port Ltd, Visakhapatnam Port Trust, National Thermal Power Corporation, Hinduja Power Project and Kakinada SEZ.

Similarly, the Bharuch PCPIR in Gujarat with its main anchor investor, ONGC Petro Additionals Ltd (OPAL) — a joint venture of ONGC and Gujarat State Petroleum Corporation — has committed project investment of Rs 16,400 crore. The investments are for the Rs 13,000-crore multi-feed petrochemical cracker and Rs 3,400-crore carbon extraction unit. Investment in infrastructure is a combination of state government budgetary support of Rs 253 crore and public-private partnership of Rs 51,496 crore, which includes commitments of state government and private developers. Various companies which have committed investments are ONGC extraction plant, ABG Shipyard, Ruchi Petrochemicals, Gujarat Alkalies and Chemicals Ltd, DIC Fine Chemicals, Sajjan Speciality, Pidilite Industries, Rallis India, Lanxess India, Ginni Filament, Arcoy Biorefinery, Romano Tiles, India Peroxide and Neesa Infrastructure. The report has also stated that the total employment generation from the Gujarat PCPIR is expected to be 800,000.

Indian Oil Corporation (IOC) is the anchor investor in the West Bengal PCPIR with a committed investment of Rs 3,000 crore for expansion of its refinery and a new hydro cracker unit, Rs 1,800 crore for a coker unit and Rs 4,000 crore for a new paraxylene unit. The Spic group-controlled CALS refinery has proposed to set up a Rs 5,000-crore crude refinery complex for blending crude which is expected to be commissioned by the end of 2010. There are also grassroot refineries proposed by IOC and CALS, which will take the total investment to Rs 93,180 crore. For physical infrastructure, the Union government has also earmarked Rs 2,108 crore in its current five-year plan. The remaining Rs 15,923 crore has been committed through the state government jointly with public-private partnerships.

** Q&A: Vinod Rai, Comptroller and Auditor General of India - 06 Aug 2010 - Business Standard

http://www.business-standard.com/india/news/qa-vinod-rai-comptrollerauditor-generalindia/403654/

'Government wants me to audit PPPs'

The Comptroller and Auditor General’s (CAG’s) report on the allocation of 2G spectrum is expected soon; the CAG is in the process of auditing the capital expenditure of Reliance Industries Limited’s (RIL’s) KG Basin gas fields … With over half the Plan funds that Parliament approves being spent through non-government channels, to cite the figure in CAG Vinod Rai’s presentation to the Planning Commission, MPs have no way of knowing whether the money is properly spent. Which is why the government is requesting the CAG to expand the scope of its audits to cover various private sector projects as well. Rai spoke to Sunil Jain and Joe C Mathew to explain how the CAG plans to do the audits and dismissed fears that this could hurt their progress. And no, he grins, he won’t be looking for the fires behind all the smoke, only the big ones. Excerpts:

Why are you auditing PPP projects now?
I am not asking for an enlarged role; it is the government which is requesting the CAG to do the audits since it wants to give comfort to the MPs that the money is being well spent. Parliament votes for spending of resources. I think, of the Plan of Rs 1,60,000 crore, roughly Rs 83,000 crore is spent through non-government channels and this is audited by chartered accountants, but these reports are not presented to Parliament. All I’m saying is that Parliament must have the right to oversight, and for that, it needs information. When the CAG Act was passed in 1971, the model of governance was different — you didn’t have any NGOs, any civil society engagement or public private partnerships (PPPs). These new models of governance the world over have got reflected in the CAG Acts of many countries. We are doing the same now.


In the case of projects like RIL’s KG-D6 fields, the DGH has audited the costs anyway …
The Directorate General of Hydrocarbons (DGH) does not approve costs. The costs are a function of an MoU between the company and the ministry. The DGH said the CAG had looked at the costs and this was seen to be incorrect. The government asked us to look at it and we will do it now. The differences in the original and later capex figures were huge; then the government said it wanted independent experts to see if this was justified.

So you will now audit companies like Dial all over again?
The Delhi International Airport Ltd (Dial), since you have mentioned the name, has a primary auditor, as does Oil and Natural Gas Corporation (ONGC) or Bharat Heavy Electricals Ltd (BHEL), and I’m not going to replace that auditor. I will do a supplementary audit and assuming I get different results, Dial will get a chance to defend the original audit — if I am not satisfied, Dial will change its balance sheet. This is the practice with public sector firms. There is no problem.

You will look at whether, for instance, a Rs 100 crore contract was given to the L1 bidder? L1 has been one of the biggest reasons that PSUs don’t work as fast as private sector firms do.
Not unless the MoU/contract specifies that the bidder has to be the lowest or L1.

So what will you look at in a PPP project?
Let’s say A has been given a 30-year road concession, and the projection was that there would be 100 cars on that road every hour — now if the actual traffic is up to 200 cars, I’ll do the calculations and suggest that the concession be reduced to, say, 22. I will see if the transactions are with related parties. Each PPP has an agreement; my job is to audit whether that has been adhered to.

And what will you look at in the KG Basin?
I will look at costs. It will be audited all over again. I will see if RIL has done the due diligence; I will look at the capex to see if it is justified; and I’ll see whether all the costs can be loaded on to one project — this applies to all projects, not just to KG-D6.

But doesn’t this hinder functioning of companies? You know the saying about the 3Cs — CBI, CVC and CAG — and how this scares officials from even taking decisions?
How many officials of a PSU are behind bars or have had their ranks reduced or have had some sort of disciplinary action taken because of CAG reports? All apprehensions should be based on facts. The 3C fear is a bogey. I was in the defence ministry for five years and I bought equipment that was not always the lowest, or L1. All that the CVC/CAG wants is justification saying I was buying Tank X or Gun Y because the L1 bidder’s equipment didn’t meet my requirements. The fear of the CAG is used as an excuse to not take decisions.

Your guidelines for auditing PPPs talk of looking at whether getting a private firm in is justifiable. This is frightening.
A fortnight ago, the defence ministry press release said it wanted to manufacture six submarines in the public sector shipyards like Mazagaon and three in the private sector. Why? Because the ministry did due diligence and found that PSU shipyards cannot do more than six in a time frame. The navy said it needed nine, so three had to be done in the private sector. I just want to see if the due diligence has been done. In the case of an airport, the government may say that the Airports Authority of India (AAI) would have taken too long — this is justifiable. All I’m saying is that you need to have a checklist for due diligence and this has to be followed.

The CAG wants to engage with the government. I have been doing outcome audits for government projects. So, if the government says it wants to build a world-class airport and so needs to give the concessionaire concessions, I want to see how much of this is justifiable. We have an entry conference when we start a performance audit to explain the audit process. Then there is an exit conference after the audit where we present our report and take into account clarifications/objections. I will share our observations with the government before finalising it.

Let’s assume you find huge problems in a PPP project and you present your report to the government. What then? In the case of the VDIS tax amnesty scheme, the Delhi Vidyut Board privatisation, and a lot more, you pointed out huge lacunae, but the government didn’t act on your suggestions.
Our job is to do the audit and present it to the government. Once we engage with the government, and the government reads our report, the idea is mainly to ensure the same problem does not get repeated. When we did an audit of MNREGA, the then rural development minister was very positive and accepted a lot of our suggestions to plug the loopholes.

One change we have made is that now we also highlight the positives of programmes. Let’s say we find that certain aspects of MNREGA are being implemented very well in Maharashtra. We will highlight this as a model for others to copy in our reports.

What expertise do you have in auditing something like KG-D6 or Dial? How do you know what expenditure is required and what is not?
Training and retraining is the single biggest activity for me since my resource is human capital. At any point in time, at least a staff of 100 is training. I’ll tie up with the CAG of Oman, for instance, and he’ll put my people in oil companies there to learn about the sector. I do not have officials who are experts in atomic energy or petroleum exploration, but officers undergo rigorous and continuous training in these areas when required to audit a particular sector. Before the KG audit, I sent my people for training, hired consultants and so on. I also have specialised centres like the one in Noida on IT audit — we’re world leaders in this now. We are setting up a centre for environmental audit in Jaipur and have people like Sunita Narain and R K Pachauri associated with it.

A common feature, increasingly, of PPPs is that they give large post-bid concessions or make changes in the contractual framework. In some other cases, you find concessions being offered just before the financial bids, by which time most of the original bidders have walked away. Will you look at this aspect in your audits?
Let’s see. If it is really big and the government or the public or the media thinks there is a problem … There is no smoke without a fire, but we won’t look every time there’s some smoke, we’ll concentrate on the big smoke!

** Paradip port iron ore berth held back due to lack of environment clearance - 06 Aug 2010 - monelife.in

http://www.moneylife.in/article/8/7934.html

The Paradip port iron ore berth project awaits financial closure as port authorities are yet to obtain environment clearance for the project

A number of Indian infrastructure projects are inching along towards completion due to environmental issues. The Paradip iron ore berth project, which was the first Public Private Partnership (PPP) project in the port sector under the New Model Concession policy, awaits financial closure, as environment clearance is still pending.

Gammon Infrastructure Projects Ltd (GIPL), in a consortium with the Noble Group Ltd and State-run trading company MMTC Ltd is developing the iron ore berth at Paradip port. The total project value stands at around Rs590 crore. The project is being developed on a build-operate-transfer (BOT) basis with concession period of 30 years, including a construction period of three years.

The project is being developed through a Special Purpose Vehicle called Blue Water Iron Ore Terminal Pvt Ltd. The project was awarded in July 2009. The venture is expected to add 10 million tonnes per annum capacity to Paradip port.

According to company sources, all the necessary procedures for the project's financial closure are in place. An environment go-ahead is necessary to formally conclude the financial closure for the project.

GIPL will be raising funds for this project from international banks. The company refused to divulge any further details on these lenders. The project would be financed through a 75:25 debt-equity ratio.

GIPL is positive that the port authorities would be able to obtain the green clearance within a month. The financial closure is expected to be achieved within a couple of weeks thereafter.

This was the first project under PPP to be implemented in the port sector as per the New Model Concession policy approved by the Cabinet. The tariffs for this project had been fixed by the Tariff Authority of Major Ports (TAMP). Paradip Port Trust floated global tenders for construction of a deep-draught iron ore berth on a BOT basis, as part of the PPP scheme of the Centre. The GIPL consortium was selected amongst five short-listed bidders.

In 2008, the New Model Concession policy for private sector participation projects replaced the Model License Agreement, which had been in use in major ports since March 2000. The decision was expected to bring about enhanced bankability of private sector projects in major ports, standardisation of financial and commercial terms for award of concessions for port projects, speedy decision-making and equitable and efficient allocation of risks between the contracting parties. This 2008 Model Concession Policy is also expected undergo certain significant changes soon.

While modifications in the policy might cover issues like bankability and risk allocation, the government needs to emphasise more on green issues too. Port capacity expansion is crucial to cater to the growing raw material requirements of the developing Indian economy.

** Port capacity rings alarm bells as coal imports surge - 04 Aug 2010 - Economic Times

http://economictimes.indiatimes.com/news/economy/foreign-trade/Port-capacity-rings-alarm-bells-as-coal-imports-surge/articleshow/6254584.cms

NEW DELHI: An impending surge in coal imports has the government worried about handling capacity at ports, prompting it to put together a plan to
prepare them to handle inflow of over 230 million tonnes of coal as the energy hungry country buys fuel overseas to feed its power plants.

The government will soon invite fresh investment to expand the existing coal berths to handle larger vessels and also award new coal berths at all major ports under an accelerated development programme. “An alarming situation has arisen as the country builds up its coal fired power generation capacity,” said a government official adding that the huge gap between demand and domestic supply will cause a surge in imports necessitating emergency handling measures at ports.

The demand-supply mismatch in coal is projected to increase from about 80 million tonnes by 2011-12 to over 230 million tonnes by 2016-17, according to official data.

“We are planning to advance expansion projects at all Indian ports and invite private investments in a big way to create infrastructure before the situation starts affecting power projects in the country,” the official said asking not to be named.

The government will ask all the dozen major ports of the country to expand coal handling facilities and set up exclusive coal berths at increased sea depths to facilitate entry of larger cargo ships. In addition, several intermediate ports will also permitted to set up additional coal berths. Public private partnership (PPP) projects will also be facilitated to faster completion of the development work.

The railways will also be asked to improve availability of rakes by decongesting identified locations for transporting the imported coal to consuming centres.

Poor infrastructure is already creating problems for some of the upcoming and running power plants to get coal in right quantity at the right time, which if not addressed could make it difficult for the country to add planned 100,000 MW capacity in the twelfth plan.

Indian ports just have just about adequate capacity to handle existing level of coal imports.

The issue has also been flagged in the mid-term appraisal of the Eleventh Plan. The document has said that by the end of the current plan period imported coal will account for 11.7% of the estimated demand as against earlier projected 7%. This will rise further to over 20% by the terminal year of Twelfth Plan (2012-17).

Despite this visible demand, investments in the ports sector have been low, projected at `40,647 crore during the Eleventh Plan, which is less than half of the original target of `87,995 crore.

Private investment in the port sector is projected at almost 40% below initial estimates. India’s 12 major ports handle one-third of India’s external trade with a cargo handling capacity close to 575 million tonnes.

Multipurpose berth at Orissa's Paradip port by 2013 - 04 Aug 2010 - orissadiary.com

http://www.orissadiary.com/ShowBussinessNews.asp?id=20335

Paradip: The multipurpose berth being developed at Paradip Port on public-private partnership (PPP) at an estimated cost of Rs 387.31 crore is likely to be completed by September 2013, Union minister of shipping GK Vasan has informed Parliament in New Delhi on Tuesday.

The minister said that the commissioning of the project would enhance the port’s cargo-handling capacity by five million tonnes and it would handle clean cargo, including containers.

He also informed that the Centre proposes to install radiation monitoring portals (RMPs) at all major ports of the country by 2012. The RMPs will help prevent smuggling of radioactive hazardous materials, he said. Currently, steel junk imported is visually examined by the customs department, he added.

** Not just trains, Railways projects too run late - 4 Aug 2010 - Economic Times

http://economictimes.indiatimes.com/news/economy/infrastructure/Not-just-trains-Railways-projects-too-run-late/articleshow/6254567.cms

NEW DELHI: The Comptroller and Auditor General (CAG) of India has pulled up the Railways for its lackadaisical approach to capacity expansion,
essential for increasing its freight business.

Significantly, the CAG has expressed concerns over delays in execution of the ambitious Dedicated Freight Corridor, that saw its project cost increase by more than two-fold.

“The project cost (for the DFC) initially estimated at `28,000 crore (January 2007) has almost doubled and is estimated at `48,000 crore at present costs,” the CAG in a report tabled in Parliament on Tuesday said, noting that even land acquisition for the project has not yet been completed.

The DFC will consist of two exclusive corridors for transport of goods — an eastern one running from Ludhiana to Dankuni and the western from Navi Mumbai port to Tughlakhabad.

Worried over the cost and time overruns in the project, the Planning Commission, too, has asked the railways to prepare a more realistic funding plan.

The freight corridor is not the only railway project facing delays. The CAG report has noted that a total of 408 railway projects (including the DFC) costing `1,41,015 crore, at the end of March 2009 have been delayed and will pose as major bottlenecks in the future.

In fact, despite its thrust on public private partnerships, the railways has failed to garner private investment in 10 out of its 16 zones.

Strengthening railway infrastructure is especially crucial for increasing the freight business as work on the DFC is yet to gain momentum, the CAG has stressed. It has asked the ministry to monitor and cut down on procedural delays in works contracts.

An analysis by the CAG of the railways’ freight transport between 2006 and 2009 has revealed that the railways fell short of its loading targets in eight of the 16 zones in at least one commodity.

Meanwhile, the CAG was also critical of the railways efforts at passenger security and has highlighted the incomplete safety works at level crossings, under-utilisation of safety fund and the use of old locomotives. “Railways has been unable to fulfil its target envisaged under Corporate Safety Plan (CSP). It leaves a lot to be desired,” Narendra Singh, deputy CAG said.

Indian Railways had formulated a Corporate Safety Plan in August 2003, for ten years, targeting a safety action plan towards reduction in risk level to its customers, enhancement of asset reliability and other safety related aspects.

While the CSP proposed to replace over-aged locomotives every year, the CAG observed that out of the 4,163 broad gauge diesel locomotives on line, 223 were still over-aged. The life of a locomotive engine is considered to be around 35 years. The report has also found that there were large number of vacancies in respect of safety-related posts, thereby, posing a safety risk in railway operations. As on March 2008, there was a total of 86,108 vacancies in respect of safety category posts.

During 2003-2009, out of total allocation of `4,607.33 crore, railways have utilised only `2,090.04 crore, leaving many of the suggested safety improvement works at level crossings incomplete, the report further noted.

** Railways told to prepare new funding plan for freight corridors - 2 Aug 2010 - Economic Times

http://economictimes.indiatimes.com/news/news-by-industry/transportation/railways/Railways-told-to-prepare-new-funding-plan-for-freight-corridors/articleshow/6249699.cms

NEW DELHI: The Planning Commission has asked the Indian Railways to prepare a new funding plan for the dedicated freight corridors, which were
envisaged almost a decade ago but have not made much progress, saying the current plan does not take into account the cost escalation. The Plan panel is concerned that the cost of the ambitious project could escalate to as much as Rs 1 lakh crore by the time it is completed in 2016, which is not reflected in the current financing plan of the Railways.

The cost of constructing the two stretches of the dedicated freight corridor — the eastern one running from Ludhiana to Dankuni and the western one from Navi Mumbai port to Tughlakhabad — was initially pegged at Rs 28,000 crore, but over the years has risen significantly due to the addition of new segments and time overruns.

As per the railway ministry’s current estimates, the corridor will cost Rs 49,624 crore and may well go up to Rs 60,000 crore by the time it is complete.

The Railways plans to fund this project using internal resources of the railways, public private partnerships as well as external assistance, but the Plan panel has suggested that it should realistically review this estimate.

“The Dedicated Freight Corridor Corporation of India (DFCCIL) is a special purpose vehicle. If the railways ministry plans to move its profits to it for constructing the corridor, there has to be a clear system of fund transfers in place,” an official privy to the developments said.

The plan panel has also asked the railway ministry to review the projected internal rate of return (IRR) for the project and decide on the quantum of market borrowings needed.

While the Railways has pegged the IRR at about 9% in the worst-case scenario, the plan panel feels it could be even lower, which would make it difficult to raise funds from the market for the project.

** CWG stadia to be managed by public-private partnership - 10 Aug 2010 - Times of India

http://timesofindia.indiatimes.com/sports/events-tournaments/commonwealth-games/top-stories/CWG-stadia-to-be-managed-by-public-private-partnership/articleshow/6288290.cms

NEW DELHI: Racing against time to be ready, the venues for this year's Commonwealth Games would be managed through a Public-Private partnership system after the October 3 to 14 event. Replying to a question in the Lok Sabha, Minister of State for Youth Affairs and Sports Pratik Prakashbapu Patil said the government has already invited applications from corporate sector.

"The government has floated a Request for Qualification (RFQ), inviting applications from the corporate sector for the operation and maintenance of the five stadia in Delhi after the conduct of the Commonwealth Games," he said.  "The last date for submitting the applications is August 23. After that the eligible bidders will be provided with Request for Proposal documents for submitting their financial bids," he added. 

"The Sports Authority of India has engaged a Transaction Advisor to assist in the process of short-listing prospective bidders and selecting the concessionaires for managing the stadia on a Public Private Partnership mode."

The stadia covered under this are the Jawaharlal Nehru Stadium complex, Major Dhyan Chand National Stadium, Indira Gandhi Sports Complex, Dr Shyama Prasad MukherjeeSports Complex and Dr Karni Singh Shooting Ranges.

"It is proposed to make the stadia financially viable with optimal utilisation of the sporting as well as commercial potential," the minister said.

** The entrepreneurial state - 04 Aug 2010 - Business Standard

http://www.business-standard.com/india/news/the-entrepreneurial-state/403517/

Gujarat’s investor-friendly policies have spawned a thousand wealth-creators.

Gujarat’s Gross State Domestic Product (GSDP) grew by 10.2 a year in the tenth five-year plan (2002-07) and the growth target for the eleventh plan (2007-12) has been set at 11.2 per cent a year. To accomplish this target, the state government is leaving no stone unturned in providing policy and infrastructure support to industry.

According to Chief Minister Narendra Modi, “The state government’s investor-friendly policies are helping Gujarat grow at this pace. This is reflected in the fact that there is zero labour-hour loss in the state. Gujarat is not rich in several minerals like coal. Notwithstanding this, power and steel companies are still flocking to the state.”

Gujarat accounts for 15.14 per cent ($114.52 bn) of the total investments in India, highest amongst all states in India, according to the Vibrant Gujarat website.

Powerful state
Gujarat, one India’s most industrialised states, has powered its way from a power-deficit to a power-surplus state. Almost all leading power project developers have either set up projects in the state or have expressed their intentions of doing so. That Gujarat has emerged as the power hotspot of the country is indicated by the fact that 31 national and international companies inked MoUs with the state government during the Vibrant Gujarat Global Investors’ Summit 2009 for setting up a total generating capacity of 43,000 Mw. The state government plans to double its power generation capacity from the current 10,000 Mw to 20,000 Mw by 2012.

Singapore-based infrastructure firm Universal Success Enterprises (USEL), promoted by Prasoon Mukherjee, has committed an investment proposal of Rs 50,000 crore for a 10,000 Mw power station. The Reliance-Anil Dhirubhai Ambani Group (R-ADAG) is setting up a new power plant with a capacity in the range of 6,000-8,000 Mw. The Tata Group is already in an advanced stage of setting up a coal-fired ultra mega power project (UMPP) at Mundra in Kutch, slated to be operationalised by September 2011.

Last year, the Adani Group commissioned the first unit of its 4,620 Mw coal-based power project at Mundra. The company has planned an investment of close to Rs 20,000 crore for the project. Torrent Power, which supplies power to more than two million customers in Ahmedabad, Surat and Gandhinagar, dedicated the Sugen mega power project with a total installed generation capacity of 1147.5 MW to the nation in September last year. The company plans to expand generating capacity by 3,000 Mw.

Going green

Green energy is another focus area of the state government, and Gujarat came up with a separate Solar Power Policy in 2009. The Clinton Foundation, Tata Power, NTPC and the Adani Group have expressed the intention of setting up solar projects in the state. And Gujarat Urja Vikas Nigam Ltd (GUVNL), an apex electricity company in the state, has inked power purchase agreements (PPAs) with over two dozen companies to procure solar power totalling 420 Mw.

Gujarat also has wind power generation capacity of 1,864 Mw and potential for 10,645 Mw, and GUVNL has inked PPAs for wind power totalling 925 Mw.

Ports
Gujarat is home to 41 ports and handles 25 per cent of the country’s sea cargo. The state government envisages development of 10 green-field ports, six of them in the private sector and four as joint-sector ports.

The new private and joint sector ports will be operated on the Build-Own-Operate-Transfer (BOOT) principle. The Adani Group, Pipavav Shipyard, Gujarat Pipavav Port and ABG Group have entered the ports business. The state government is also focusing on shipyards, and Jindal Shipyard, Bharati Shipyard, Afcons and Dolphin group have expressed interest in investing in the sector.

It’s SEZZling!
Exports from Gujarat’s special economic zones (SEZs) accounted for over Rs 1 lakh crore of the total exports of Rs 2 lakh crore from all of India’s SEZs in 2009-10. Reliance Industries’ Jamnagar SEZ became the single largest SEZ in the country, with its exports crossing Rs 75,000 crore, while the Surat SEZ emerged second with its exports crossing Rs 22,000 crore. The state has about 10 operational SEZs and close to 60 notified SEZs.

Oil is well here
Gujarat outranks all other states in production of crude oil and natural gas in India. Reliance Industries’ refinery at Jamnagar is India’s largest and the biggest grassroots refinery in the world. The Essar group has also set up a refinery in Jamnagar. About 36 per cent of India’s installed refining capacity is in Gujarat. The state houses the only two operational LNG terminals in the country, at Dahej and Hazira.

SIR and DMIC
The Gujarat government enacted the Special Investment Region (SIR) Act in March 2009 for setting up new cities in the state. About 12 such special investment regions — including Dahej, Sanand, Dholera, Changodar, Santalpur and Hazira — have been identified and master plans are being prepared. Each will be at least 100 sq km in area.

Gujarat has also taken the lead in chalking out the master plan for the Delhi-Mumbai Industrial Corridor, a $130 billion infrastructure project being developed by the Central government in partnership with Japan. About 38 per cent of the DMIC’s potential investment area is in Gujarat.

Dholera, in the DMIC, will be the first city to be developed by the Gujarat Industrial Development Board (GIDB). With an area of 360 sq km, Dholera will see an investment of Rs 55,000-60,000 crore, of which Rs 38,000 crore will be on a public-private partnership (PPP) basis. Dholera’s first phase is likely to be completed in 2016 and the aim is to attract a population of two million.

Vibrant Summit
Held biannually since 2003, the Vibrant Gujarat summit aims to attract foreign investment and knowhow into the state. Japan and Canada have agreed to be the official partners for Vibrant Gujarat Global Investors’ Summit (VGGIS) 2011 (to be held on January 12 and 13 next year). VGGIS 2009 saw a mammoth investment commitment of Rs 12 lakh crore through the signing of over 8,500 memoranda of understanding (MoUs).

The way ahead
The government has infrastructure projects worth Rs 11.81 lakh crore lined up for the next 10 years, according to an authoritative three-volume project report, Blueprint for Infrastructure in Gujarat (BIG) 2020, released recently by Chief Minister Narendra Modi.

The report says that the share of the power sector will be Rs 2.23 lakh crore, that of ports and shipbuilding Rs 1.19 lakh crore, gas Rs 1.23 lakh crore, urban infrastructure Rs 1.12 lakh crore and that of the Dholera SIR Rs 1.09 lakh crore.

**Indias need for infrastructure inspires public-private investment - 02 Aug 2010 - abcmoney.co.uk

http://www.abcmoney.co.uk/news1/Indias-need-for-infrastructure-inspires-public-private-investment,200394.htm

 July 29, 2010 - It's startling that despite its underdeveloped infrastructure, India is predicted to achieve growth of up to 9.4% in 2010. According to the Planning Commission of India, GDP growth is held back by 1.5-2% every year because of a bottleneck in infrastructure expansion. Corporate India is reporting strong growth and earnings but if India is to push through the double-digit growth barrier in the coming years, it needs much more investment - both public and private - in the power generation, transport and communications networks that support fast growing industry and services.

The recent windfall received by the Indian Government from its highly successful 3G and Broadband Wireless Access auctions has swelled government coffers. The auction for 3G spectrum ensured an inflow of USD22.8bn, over three times the original estimate of USD7.5bn from both the 3G and Broadband Wireless Access (BWA) spectrum auctions. The auction for BWA spectrum too had successful bidders committing over USD8.3bn. While these funds will be used primarily to lower the country's fiscal deficit, they give the country a stronger position from which to press ahead with its ambitious plans for infrastructural development.

The Government's next five-year plan, starting in 2013 looks set to include $1 trillion of infrastructure development, with around half of this likely to come from private funds. This follows the $300 billion set to be spent in FY11 and FY12.

The Government has already moved to streamline its policy framework to allow a bigger role for the private sector. This is an economic necessity, but also offers wider opportunities for investors. Special units have been set up to quickly resolve issues relating to land acquisition, and there are plans to revamp the contract model for Engineering, Procurement and Construction (EPC) projects, to make it easier for the private sector to tender.

Meanwhile, India is beginning to establish a reputation for delivering on landmark projects, such as the new state of the art terminal at Delhi airport. With the Commonwealth Games just around the corner, the integrated terminal is the second largest in the world. Built by a consortium comprising the Airports Authority of India, German-based Fraport AG, and Malaysia Airports Holdings Bhd, the project is a shining example of what can be achieved through public private partnerships. It took just 37 months to complete and will be capable of handling 34 million passengers a year.

The new joint venture between French industrial engineering major Alstom, state-owned Bhel, and Nuclear Power Corporation is another example of the rise in public-private partnerships. The project will tap around 45,000 mw nuclear power expected to come up in India over the next 10-15 years . While these internationally significant projects grab the headlines, India is addressing its infrastructure issues at every level with the Government targeting to build around 20 kilometers of new road every day. This would require an estimated annual spend of $8-10bn.

Confidence that projects involving public-private partnerships can be delivered successfully means that the logic behind Indian infrastructure investment is more convincing. With levels of activity increasing, getting 'on board' with the infrastructure growth story has perhaps never been more interesting.
 

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* Nitin Jain manages the investment strategy of Kotak's 4 Luxembourg-domiciled UCITS III SICAVs, including the India Infrastructure Realty Fund. The fund primarily invests in listed shares and equity linked instruments of companies directly or indirectly linked to the infrastructure and realty sectors in India."

Please Note:

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IMS Vikrant plan gets new push - 01 Aug 2010 - Hindustan Times

http://www.hindustantimes.com/IMS-Vikrant-plan-gets-new-push/Article1-580618.aspx

The state is determined to get the Indian Museum Ship (IMS) Vikrant project off the ground despite failed bids and procedural delays over a decade. But having burnt its finger with the last bid, this time round, the state and executing agency, Maharashtra Urban Infrastructure Development Company (MUINFRA) are working to ensure the developers focus more on the maritime museum and not added commercial ventures such as restaurants, theatres or convention centres.

On Thursday, the apex co-ordination committee, comprising of senior naval and state government officials decided to give the project another shot by restructuring it. MUINFRA will call for fresh bids within a month seeking private partners to convert the 1997 decommissioned aircraft carrier into a maritime museum.

At the last instance in April, none of the short listed five bidders — HCC Infrastructure, Srei Infrastructure, Kalpataru Power, Dhoot Developers and Zoom Developers — turned up for the financial bids for the Rs 450- 500 crore project.

The state government decided not to extend the bid period, since it was not convinced about the developers’ interest in maritime museum.

“Our main concern while talking to developers last time was that they were not sharing the vision we had for IMS Vikrant. They were more interested in commercial ventures than the museum,” said Ajay Saxena, Public-Private-Partnership expert of the state government.

To make the project commercially viable, the developer is allowed to exploit nearly 2 lakh sq-feet of space by building certain permissible activities — restaurants, convention center, theatre on the 20-000 tonne, five-storey ship. To ensure the developers have expertise and interest in the museum, the bid will ask for certain mandatory features in the museum, on the lines of international models.

The developers will have to submit designs of the proposed museum and evolve commercial model around the museum instead of vice versa. Officials hope the fresh bidding process would give an opportunity to get new firms that had expertise in shipping works.

** It’s time for NE to take PPP route to growth - 01 Aug 2010 - Economic Times

http://economictimes.indiatimes.com/features/the-sunday-et/policy--you/Its-time-for-NE-to-take-PPP-route-to-growth/articleshow/6242444.cms
 

Despite becoming the second fastest growing and the fourth largest economy of the world, India continues to face large gaps in demand and supply of essential social and economic infrastructure and services.

Rapidly growing economy, increased industrial activity, burgeoning population pressures have led to greater demand for better quality and coverage of infrastructure services. In order to bridge the gap between supply and demand, the Government of India has taken up the public private partnership (PPP) mode of investment for providing services to the populace within a reasonable time frame.

The approximate requirement of infrastructure investment in the Twelfth Plan is estimated at $1 trillion and 50% of this is proposed to be met through the PPP mode. This has become a great challenge to a state like Assam which needs huge investments to catch up with the national growth rate by 2020.

North Eastern Region (NER) Vision 2020 aims at bridging the yawning gap between NER and the rest of the country. The document estimates that investments worth Rs 13 lakh crore are primarily needed for development of infrastructure.

This investment requirement can not be met by the government alone and shall need involvement of private partners. However, considering the present scenario of inadequacy of infrastructure and location disadvantage, it would be a challenge for the state government like Assam to attract private investment of such colossal magnitude.

The Assam government with the help of the Centre has taken up physical and social infrastructure development programmes through initiation of various measures like infusion of capital from World Bank, ADB, JICA and Central government pool.

Mobilising government resources to fully meet the fund requirements would put a huge tax burden on the people of the state. The Assam government proposes to bring in private sector investment with PPP mode as one of the preferred routes.

Many infrastructure projects may not be financially viable, at least in the short run. Financial viability of such projects can be improved by availing viability gap funding from Government of India.

Assam is blessed with abundant water resources, huge hydrocarbon, large quantities of low ash coal, limestone and dolomite, granite as well as deposits of a few other unexplored important minerals and oils etc.

It offers ideal climatic conditions for growing tea, rubber and for-est resources like bamboo, medicinal herbs etc. Assam is packed with number of tourist hotspots which offer vast potential for tourism.

Therefore, the state offers a congenial investment atmosphere with comprehensive central investment policy for North East Region and liberalised state industrial policies, both providing attractive incentives or subsidies.

Availability of skilled and cheap manpower, a large pool of English-speaking manpower and vast natural resources have the potential to translate the state into a suitable destination for major investment hub.

Some national and international investors may shy away from investing in North-East citing geographical distance and the so-called turbulence in the area but many PPP projects are being unfolded in Assam in particular, indicating investors’ interests.

Many projects—numbering 45 in total and worth of over `8,350 crore—have been identified and are being taken up for development by the state government across sectors ranging from urban development to power, health and education.

The political stability coupled with the state’s incentives for industries have turned out to be key drivers for the new PPP story in the North-East. It’s only a matter of time that North-East India may script major success stories in private sector investments as well.

(The writer has served as joint secretary in PMO and finance ministry)