Modi cabinet approves trunk infra development in Dholera SIR

New Delhi

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved the construction of Trunk Infrastructure components in the activation area of 22.5 sq.km. of Phase-1 the Dholera Special Investment Region (DSIR) in Gujarat in the Delhi Mumbai Industrial Corridor (DMIC) Project.

The total cost of the project is estimated to be approximately Rs. 2784.83 crore which will be invested by DMIC Trust as equity in the city/node SPV.

The trunk infrastructure components are:

– Roads and Services,
– ABCD building complex (Phase-1),
– Water Treatment Plant (WTP),
– Sewage Treatment Plant (STP) and
– Common Effluent Treatment Plant (CETP)

Trunk Infrastructure development is proposed to commence in FY 2015-16 for the above mentioned infrastructure projects and is likely to be completed by FY 2018-19 after all necessary approvals. The primary objective of developing the Activation Area is to trigger developmental activities in DSIR and attract local and global investments. This Activation Area has been selected due to maximum concentration of Government Land which will facilitate the early take off of various infrastructure components in DSIR.

The Activation Area is envisaged to act as a catalyst for further investments in DSIR. The presence of basic trunk infrastructure facilities (e.g. roads and services, water, power, sewerage, drainage, STP, CETP etc.) will enable the development of Phase-1 of the DSIR. Also, this area constitutes the northern half of the DSIRDA land and provides very good connectivity with the other Town planning Schemes of the area. The provision of Roads and Services will enable accessibility to this area and will ensure that serviced land is available for investors to start their development activities in the Activation Area.

As per the institutional and financial structure approved by the Government of India for DMIC project, the land for the project will be contributed by the State Government as their equity while the contribution of DMIC Trust by way of equity and debt will be made in form of cash for implementing various trunk infrastructure components subject to a ceiling of Rs. 3000 crores. The value of land brought in by the State Government would be the equity contribution of the State Government. The balance funding i.e. funding over and above the contributions from Gol and the State Government required for the trunk infrastructure in subsequent phases shall be met from the internal accruals of the SPV and debt raised by the SPV as may be required.

DSIR has been planned over an extensive area of land measuring approximately 920 sq km encompassing 22 villages of Dhandhuka and Barwala Taluka in the Ahmedabad District. This node is strategically located near the industrial cities of Vadodara, Ahmedabad, Rajkot, Surat and Bhavnagar urban agglomerations. DMICDC, with the support and partnership of the Government of Gujarat, plans to create an economically and socially balanced new-age city with world class infrastructure and high quality-of-life standards and sustainability in the urban form.

The developable area in DSIR is divided into six Town Planning Schemes. Town Planning Schemes 1 and 2 cover the development in Phase-l. Town Planning Scheme 1 (TP 1) covers an area of approximately 51 sq km and Town Planning Scheme 2 (TP 2) covers an area of approximately 102 sq km. TP 1 contains a total length of roads of approximately 186 km, with road widths varying from 12m to 70m. TP 2 contains a total length of roads of approximately 340 km, with road widths varying from 12 m to 70 m. Services and utilities running within the road reserves will include storm water drainage, water supply, sewerage, power, telecom and gas.

It is intended to implement the roads and services within Town Planning Schemes 1 and 2, which also includes river training & bunding for flood management, in a phased manner. For practical implementation purposes, TP2 is broken down into two packages; the area to the west of the Central Spine Road (SH6) is TP2 (West), and the area to the east of the Central Spine Road (SH6) is TP2 (East). TP2 (East) covers an area of approximately 57.41 sq km and TP2 (West) covers an area of approximately 43.11 sq km with an area of 2.3 sq km falling under the Right of Way for the Expressway.

Since the entire trunk infrastructure of TP2 cannot be implemented in one go, a phased approach has been adopted and an Activation Area of 22.5 sq km has been identified which would act as catalyst for further investments and will provide a base for taking up development of further phases. The Activation Area has been carved out of TP2 (East) (18 sq km) and part of Town Planning Scheme 4 (4.5 sq. km) based on the maximum availability of Government Land. The area has approximately 72 km of roads and has an optimum mix of land uses with the industrial allocation being the maximum.

Background:

The Government of India is developing the Delhi Mumbai Industrial Corridor (DMIC) Project, as a global manufacturing and investment destination, by utilising the high capacity 1483 kilometer long Western Dedicated Freight Corridor (DFC), as the backbone. In essence, DMIC project is aimed at the development of futuristic Indian cities in India, which can compete with the best manufacturing and investment destinations in the world. The DMIC project is being implemented jointly by the Government of India and the respective State Governments. Eight Investment Areas / Industrial Regions have been identified for development in the first phase of DMIC, across six states namely Gujarat, Haryana, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh.

The Government of India approved the financial and institutional structure and financial assistance for the development of industrial cities in DMIC on 15th September, 2011. It was decided that grant-in-aid of Rs 17,500 crore will be provided by the Government of India (Gol) to the DMIC Project Implementation Fund to be set up as a Trust (DMIC Trust) over the next 5 years beginning 2011-12. The corpus would be used for funding the development of trunk infrastructure, which is not amenable to private participation on Public-Private-Partnership (PPP) basis. According to the Cabinet decision referred to above, the Board of Trustees will be empowered to appraise all proposals placed before it with the recommendations of DMICDC and approve and sanction equity and/ or debt to SPVs and grant to DMICDC for project development activities up to a ceiling of Rs 300 crore. All proposals exceeding Rs 300 crore will be submitted to the Cabinet Committee on Infrastructure (CCI), after appraisal by the PPPAC of the Ministry of Finance or the Trust as the case may be. In order to ensure coordinated development in consonance with the Master Plans/ Development Plans, all proposals for viability gap support in the DMIC region will be examined and recommended by DMICDC. Further, interests of the Government of India in the SPVs should be ensured and protected by the Board of Trustees through DMICDC.

Each industrial city (Investment Region / Industrial Area) will be implemented by a Special Purpose Vehicle (SPV), set up as a joint venture company between the DMIC Trust and the respective State Government / State Nodal agencies. The share of the DMIC Trust will be limited to 50 percent in the city level SPV, but may go up to 100 percent in the case of strategic projects, project specific SPVs cutting across the DMIC states and sectoral holding companies consisting of project specific SPVs.

As per the approved institutional and financial structure for the development of industrial cities in DMIC, all proposals exceeding Rs. 300 crore were required to be submitted to CCI for approval, after appraisal by the DMIC Trust. The powers of CCI now vest with the Cabinet Committee on Economic Affairs (CCEA). DMICDC had, after appraisal, recommended the proposal for development of trunk infrastructure for the Dholera Special Investment Region (DSIR) near Ahmedabad, Gujarat, to the DMIC Trust in the 9th Meeting of the DMIC Trust held on 6th February, 2015 followed by the 10lh Meeting of the DMIC Trust held on 19th March, 2015.

PIB

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