US $90 Billion Delhi-Mumbai Industrial Corridor to Pass Through MP: Kamal Nath

By Pervez Bari, TwoCircles.net
 
Bhopal, July 2: The Delhi Mumbai Industrial Corridor, (DMIC), will pass through Madhya Pradesh as well, Kamal Nath, Federal Minister of Commerce and Industry, announced this at a joint press conference with the visiting Akira Amari, the Japanese Minister of Economy, Trade and Industry, in New Delhi today.
   
According to a Press release issued by Press Information Bureau, (PIB), the massive project, with an investment requirement of US $ 90 billion spread over seven years is expected to transform the industrial landscape of over half a dozen states through which it will pass, including his home state Madhya Pradesh, Kamal Nath said.
   
The project will see major expansion of infrastructure and industry – including industrial clusters and rail, road, port, air connectivity – in the states along the route of the Corridor.
   
Conceived to be developed as a Global Manufacturing and Trading Hub, the project is expected to double employment potential, triple industrial output and quadruple exports from the region in 5 years. The total employment to be generated from the project – to be launched in January 2008 – is 3 million, the bulk of which will be in the manufacturing / processing sectors.
   
The first phase of the project is scheduled to be completed by 2012, the Minister said.
   
Japan is one of the major funders of the 1,483 km corridor whose cost estimates have doubled to 90 billion dollars after a recent review. In April, it was said the project would cost $40-50 billion.
   
The project runs through Uttar Pradesh, Delhi, Haryana, Rajasthan, Gujarat and Maharashtra and barely touches Madhya Pradesh.
   
He said the cost of the project has gone up as the requirements for infrastructure would be huge.
   
Nath said a similar corridor would also come in the Eastern states. "Other states like West Bengal have already expressed their willingness to replicate this model and I expect initial studies on the proposed Eastern India corridor to begin early next year," he said.
   
Funds for the project would come from Indian government, Japanese loans, investment by Japanese firms and through Japan Depository Receipts issued by Indian companies, Amari said.
   
The $90 billion will be needed only for the infrastructure in the industrial belt that will come along the high speed freight corridor being assisted by the Japanese government. The belt will extend to 150 km on either side of the freight corridor.
   
The concept paper for the project would be finalized before the visit of Japanese Prime Minister Shinzo Abe to India in August and work on the first phase would begin by January next year and would be completed by 2012.
   
"In the first phase, investment of five billion dollars will go into the project," Nath said.
   
Components of the project include Special Economic Zones, Agri Processing Zones, skill development centers, ports and airports, logistic hub, industrial areas and power plants.
   
Department of Industrial Policy and Promotion Secretary Ajay Dua said that in the first phase, focus would be in developing areas where industrial activity is already taking place to ensure cost effectiveness.
   
The project would require vast tracts of land and as its acquisition for industrial projects has become a controversial issue, government is expected to tread with caution. "A policy is being framed for land acquisition and according to that land will be acquired. Land which people do not want to give up will not be acquired. It should all be on voluntary basis," Nath said.
   
The project will be implemented by a corporate body – Delhi Mumbai Industrial Corridor Corporation – in which government would keep its stake to a maximum of 50 per cent while the rest would be with infrastructure companies and financial institutions, Dua said.
   
The corporation's job will be to undertake planning of the project, development of its components, coordinating with stakeholders, raising finances particularly overseas and monitoring implementation while for individual projects special purpose vehicles and companies will be floated.
   
The task force that is working out the details of the project has proposed an Apex Steering Authority headed by the prime minister, state chief ministers and six cabinet ministers dealing with infrastructure for the corridor.
   
To start work on project development, a US $250 million project development fund is proposed to be set up with assistance of Japanese and Indian governments.
   
In the first phase, 10 market driven nodes have been identified that will include 5 investment regions of more than 200 sq km and 5 industrial areas of more than 100 sq km.
   
The five investment regions short listed are Dadri-Noida- Ghaziabad in Uttar Pradesh, Manesar-Bawal in Haryana, Khushkhera-Bhiwandi-Neemrana in Rajasthan, Ahmedabad-Dholera in Gujarat and Igatpuri-Nasik-Sinnar in Maharashtra.
   
The Industrial areas that have been identified are Meerut-Muzaffarnagar in Uttar Pradesh, Faridabad-Palwal in Haryana, Jaipur-Dausa in Rajasthan, Vadodara-Ankleshwar in Gujarat and Alewadi/Dighi port in Maharashtra.
   
India expects Japanese companies to be major investors in those zones. Amari said Japanese entrepreneurs can use India as a base to export to Europe and Africa. ([email protected])