In a big boost to the infrastructure sector, besides other initiatives, the government of India last week approved one-time financial assistance for incomplete and languishing national highway (NH) projects. The government says projects where 50 per cent of construction was completed till November 2014 will get this one-time financial assistance.
Moreover, a new policy has been introduced for highway developers to allow exit from projects after two years of completion. The government has also allowed debt-ridden road developers to reduce their loans by exiting some of the projects.
Actually, the road sector has been constrained by the economic slowdown and lack of private sector participation. It is good to see that in order to revive the sector, the government has decided to work on the engineering, procurement and construction (EPC) model, where the construction of roads would be funded by the government but executed by private developers.
Another good initiative for the infrastructure sector is that the government in September approved setting up of a committee to propose to the Exim Bank a scheme to offer concessional finance to those companies which are bidding for infrastructure projects abroad.
This will surely boost businesses of the infrastructure companies with healthy order books. With all these initiatives, the government’s most ambitious ‘Make in India’ programme should also see a huge success and give fillip to the country’s economic growth.
No doubt, the Modi government is promoting his policies of attracting the manufacturing industry to India under the slogan ‘Make in India’ and of creating smart cities. The efforts of the Modi government in pitching for overseas investments in various sectors, including infrastructure, have started showing results. If the news is to be believed, Malaysia recently proposed to invest $30 billion in Indian infrastructure.
Japan, too, has strengthened infrastructure ties with India. Japan International Cooperation Agency (Jica) has committed a loan of $4.58 billion for a mega railway project between New Delhi and Mumbai along the western corridor.
Despite turmoil in most global markets, India has emerged one of the fastest growing markets globally. The current moves by the government are a good push to the infrastructure sector. The government’s focus on clearing infrastructure as well as road projects is expected to provide the much-needed lifeline to infrastructure companies.
British deputy high commissioner Andrew McAllister on Wednesday articulated his country’s expression of interest to partner with India in realizing her vision of creating 100 smart cities.
Speaking at a round-table on ‘Smart cities and inclusion’ held here under the aegis of the British high commission, he expressed the UK’s keen interest in key areas like sustainable energy, financial and professional services skills and urban smart cities.
McAllister asserted that the UK had pioneered in infrastructure innovation. “The London underground is more than 150 years old and yet it is still driving the heartbeat of the city of London well into the 21st century. Our strengths span into all aspects of design architecture and master planning to engineering consultancy, smart grids and project managements”, he stated.
He further described the UK as a ‘global leader’ in digital technology and innovative financial solutions. The deputy high commissioner called for inclusion of the voiceless and the less privileged in the smart city and digital concepts. “In recent times, technology and knowhow have been great levellers. People are using ICT and social media to track, report and lobby on political issues. But how inclusive is it”, he asked.
Krishna district collector Ahmed Babu said the district administration is planning to take up an initiative “Golden Mile project’ on Mahatma Gandhi Road up to Benz Circle in the city as part of the smart city concept. Piped natural gas (PNG) has already become operational in Satyanarayanapuram area on a pilot project. Smart traffic concept would be introduced on the MG Road with facilities for parking of vehicles, citizen services and crime management.
Of 253 citizen services sought to be extended in the city under the smart city concept, 23 of them would be provided on the MG Road, the collector explained.
India’s own sovereign wealth like entity – National Investment and Infrastructure Fund, modelled on Singapore’s investment vehicle Temasek, will be operational by the end of this year and provide equity finance to core sector projects to boost economic activity.
NIIF will be a commercially run organisation and operate at arm’s-length from the government, Minister of State for Finance Jayant Sinha told reporters here.
Government will provide Rs 20,000 crore from Budget as seed money to the fund, which will provide equity support to infra project as well as funding agencies like IFCI BSE 3.31 % and NHB.
While the government would own 49 per cent of NIIF, which will be based out of Mumbai, equity participation from strategic anchor partners like sovereign wealth funds will be sought, he said.
NIIF will look at both greenfield as well as brownfield projects and “will fill the gap of equity financing,” he said. It would also support stalled project.
The fund will have its own governing council and the management will be paid market salaries to attract best talent.
“We are looking for long-term investors in NIIF,” he said, adding that provident funds, endowment and sovereign funds have expressed interest. “NIIF is like a sovereign wealth fund focused on infrastructure sector,” Sinha said.
The Cabinet had earlier this week cleared setting up of NIIF, which was originally announced by Finance Minister Arun Jaitley in his budget for 2015-16.
Money from the fund would be routed to provide equity support to those NBFCs and financial institutions which are engaged in infrastructure financing across sectors, and corpus to JAMCs and equity/debt to commercially viable infrastructure and other projects.
NIIF’s governing council will have government representatives and experts, eminent economists and infrastructure professionals.
After Karkardooma, the Delhi Development Authority has announced two more transit-oriented development projects – one each in east Delhi and Dwarka. For the east Delhi project, which will come up around Sanjay Lake, the land-owning agency has roped in National Buildings Construction Corporation. It signed a memorandum of understanding with NBCC on Friday.
The TOD project in east Delhi, called Lake View Complex, has been planned around the under-construction Trilokpuri Metro station. Spread over an area of 10.26 hectares, it will have multi-storey housing and commercial towers. “There will be twin signature towers with at least 50-60 storeys. A unique feature of the project will be its visual integration with Sanjay Lake. The complex, overlooking Sanjay Park, will be developed as a lakefront promenade. It will have sports facilities, housing projects, restaurants, markets and hotels, all in one area,” said Balvinder Kumar, DDA vice-chairperson.
DDA claims that the project will not only lead to increase in property prices, but will also instill a sense of safety and “social pride” among residents of Trilokpuri, Mayur Vihar Phase-II, Kalyanpuri and neighbouring areas. Though the two government agencies plan to start work on the project soon, the actual process will start after the Union government has notified the TOD norms.
It is likely to be completed in three years. NBCC will also revive the lake and redevelop the green areas around it. As per a rough estimate, NBCC officials say, the project will cost Rs 1,500-1,600 crore. “As per our plan, we will start with designing of the Lake View Complex and in the next 5-6 months, work is expected start on the ground. The project is likely to be completed in within three years,” Mittal said. But before NBCC start planning the project, it has to conduct a market survey to assess the demand for commercial and housing. “In TOD, minimum 30% component is residential. It is after the market survey, we will finalise the percentage of residential and commercial components,” said Kumar.
Meanwhile, the tourism department of Delhi government has already planned an adventure park around the lake. But DDA is unaware of tourism department’s project. “The land around Sanjay Lake belongs to DDA. We don’t have any information about the tourism department’s project. But if then government wants to redevelop the area, we are fine with it,” Kumar said.
The TOD in Dwarka is another ambitious project. It will come up along the four-kilometre Metro corridor. DDA plans to develop a Dwarka central hub which will have three componentsbusiness hub, entertainment hub and eco-recreational hub. “We plan to develop a financial hub. Priority will be given to banks, financial institutions and non-banking financial institutions.
It will be spread over an area of 28 hectares. In Dwarka, the project will come up at three different locations. The commercial and entertainment hub will be along the Metro tracks while the housing component will be at walking distance,” said a DDA official.
Apart from the TOD, DDA has also planned an adventure cycling park in Sector 5 of Dwarka. It will have dedicated tracks for cycling, a cycle museum, cycling boutique, children’s zone and cycle circuit. “
Work on the project will start within two months and will be completed in one-and-a-half-years,” Kumar said.