The Public-Private Partnership (PPP) model has given a major boost to infrastructure development in the country. Ajay Saxena, PPP expert-Maharashtra, Asian Development Bank and officer on special duty, Maharashtra Urban Infrastructure Development Company Ltd (MUINFRA) talks to Amritha Pillay of Moneylife on the opportunities available in Maharashtra on a PPP basis
Amritha Pillay (ML): What is your view on Maharashtra's appetite as a State for PPP investments?
Ajay Saxena (AS): The appetite for investments on a PPP basis is huge in Maharashtra. The Maharashtra government has also drafted a PPP policy, which is under the process of being approved. The State proposes that the projects should be made private investment friendly and preferred mode of implementation should be PPP. This will provide an unimaginable potential. The private partners have also realised that that the State is PPP friendly as it receives good response from PPP bids. The thrust in Maharashtra is so much on PPP that a PPP project development fund (PDF) has also been developed.
ML: Tell us more about this fund.
AS: The fund is of Rs20 crore in MUNIFRA for urban infrastructure development. The government also has a small PDF. Though the fund is small, what is important is that a budget provision has been created. Funding from this has already been made for projects like Taraporewala Aquarium, the Maritime Museum in INS Vikrant and also a city road project in Chandrapur. A number of other projects are also in the pipeline.
ML: What are the updates on the aquarium project, which was involved in some litigation and clearance issues?
AS: All the clearances for the project have been taken and invited bids for the project are in the evaluation stage. The final bid would be announced in the coming months - either July or August. Thereafter, the project should be completed in a span of two years. All the litigation issues have been resolved. The total cost of this project is Rs250 crore and would be developed on a design-finance-build-operate-and-transfer (DFBOT) basis, with a concession period of 30 years.
ML: By when do you expect this proposed PPP policy to be approved?
AS: It depends upon what kind of responses or feedback we receive on the proposed policy from decision makers. But we expect it to be completed in the next two to three months.
ML: Going forward, on which segments of infrastructure do you expect a major thrust from the State via PPP?
AS: The thrust is majorly on urban infrastructure. For segments like roads, there is importance given, but the road sector is quite mature in Maharashtra. It is not that a specific sector is not performing or certain sectors are lagging behind. In Maharashtra, many sectors like roads, ports, airports and power have matured on their own. They keep growing at the best level of PPP which already exists. However, the emerging sector in PPP is urban infrastructure. There is lot of thrust from the government on this sector. Even the ministry of urban development (government of India) is putting lots of emphasis on this sector under PPP.
ML: Which are the new projects coming up in the urban infrastructure space?
AS: There are a number of projects which are in the pipeline. MUINFRA is developing three projects - Taraporewala Aquarium, the Maritime Museum in INS Vikrant and also a city road project in Chandrapur under PPP. In the near future, MMRDA plans to execute a regional landfill site for solid waste management and also an e-waste management project. Both of these are in the project structuring phase. In Nagpur alone, we plan around six to seven projects of total investments worth Rs600 crore, which include a medical college worth Rs375 crore. These are in the project structure. There are plans for a sports complex in Nanded. Navi Mumbai is also planning to have an additional bus transport system on a PPP basis.
ML: How has the response been from private players towards sectors like urban infrastructure?
AS: The response received for all the bids that we have announced or opened has been tremendous. Bids for projects that were involved in Nagpur improvement earlier and the Aurangabad water-supply project worth Rs600 crore received a very good response and interest.
The Aurangabad water-supply project is being developed on a build-operate-own-and-transfer (BOOT) basis for a 20-year concession period.
MUINFRA's tenders floated for infrastructure projects have also received a very good response. Maharashtra as a State is very investor-friendly. Investors do have a great amount of confidence in the State.
ML: How has Maharashtra performed in the PPP segment compared to other States in the country?
AS: Over the past three years, the progress of PPP projects in Maharashtra has been tremendous. Recently, even government-owned colonies have been put in the PPP mode in Bandra, Mumbai. The Mantralaya makeover is also expected to be put on PPP mode. It is thus the State government's mindset that has completely changed. According to government of India's reports, there is tremendous growth in Maharashtra vis-à-vis other States in relation to PPP.
The pipeline, with an annual production capacity of 12 MTPA, will help the company in evacuating its increased production of iron ore to its domestic customers
State-owned NMDC today said that it will invest Rs3,000 crore to set up a 12 million tonnes per annum (MTPA) pipeline in Chhattisgarh to supply iron ore to its domestic steel customers, reports PTI.
"We will set a 424-km pipeline between our Bailadila mines and Vizag at an investment of Rs3,000 crore and will have an annual production capacity 12 MTPA," NMDC chairman and managing director Rana Som told reporters.
The company said it plans to place orders for the pipeline by October this year and commission it in the next two years.
"The pipeline will help us in evacuating our increasing production of iron ore to our domestic customers like RINL and Essar Steel," he said.
Mr Som said the company saw evacuation of iron ore coming down after its existing 274-km-long iron ore supply pipeline was damaged — allegedly by Maoists — in 2009. The pipeline is yet to be repaired.
The company is investing Rs3,400 crore to augment its annual iron ore production to about 41 million tonnes from the present level of around 22 million tonnes.
"Of this, we have already invested Rs2,000 crore and will commission Bailadila-11/D mines by the end of this financial year and the other will be commissioned after this," Mr Som said.
The company said it expects to achieve sales of around Rs2,400 crore in the first quarter of this fiscal.
Currently, FDI in multi-brand retail is prohibited in India. However, the government allows 51% FDI in single-brand retailing and 100% in wholesale trade
Making out a strong case for opening up the multi-brand retail sector for foreign investment, the industry ministry today sought the views of different stakeholders asking whether foreign direct investment (FDI) in the sector should be permitted, reports PTI.
"FDI in retail may... be an efficient means of addressing the concerns of farmers and consumers... Opening FDI in retail could also assist in bringing technical know-how to set up efficient supply chains, which can act as models of development," the Department of Industrial Policy and Promotion (DIPP) said in a discussion paper on the politically sensitive issue.
"It would also... assist in lowering consumer prices/inflation," it said.
The ministry has sought stakeholders' comments by 31st July.
At present, FDI in multi-brand retail is prohibited in India. However, the government allows 51% FDI in single brand retailing and 100% in wholesale trade.