Presentation on Strategies for Infrastructure Development in Karnataka By: V. P. Baligar

Presentation on Strategies for Infrastructure Development in Karnataka

• By: V. P. Baligar

Importance of Infrastructure

• Basic requirement for economic growth

• Growth rates could have been higher with better infrastructure

• Essential for improving quality of life

• Positive impact on Human Development Indices.

Initiatives of Govt of Karnataka

• Created a separate Department for Infrastructure in Sept 1996

• Formulated an Infrastructure Policy in 1997

• Incorporated ‘Infrastructure Development Corporation (Karnataka) Ltd’ (iDeCK) in June 2000

• Incorporated ‘Rail Infrastructure Development Company (Karnataka) Ltd (K-RIDE) in Nov 2000

• A Special Purpose Vehicle – Hassan Mangalore Rail Development Company Ltd (HMRDC) set up in July 2003

• Other Departments have set up institutions such as KRDCL, K-SHIP, KUIDFC, etc

Central Govt Initiatives

• Set up a PPP Cell in Dept of Economic Affairs

• Formulated a Scheme: ‘Viability Gap Funding’ (VGF) to financially support PPPs

• Established ‘India Infrastructure Finance Company Ltd’ (IIFCL) to provide long term finance to infrastructure projects

• Model Concession Agreements drafted for Road Sector

• Aims to raise infrastructure investment from 4.7% of GDP to 8%

Infrastructure: Challenges

•  A.    Policy Level

• Frequent changes in the policy
• Lack of information on the policy and procedures
• Complicated concession agreements

•  

• B.    Demand Side

• One Billion people
• Rising aspirations
• Unpredictable demand

•  

Challenges

• C. Accountability issues

• Maintenance of transparency
• Accountable to the legislature
• Scrutiny by C&AG

• D. Bureaucratic hurdles

• Clearances from a large number
• of agencies
• Delay in processing
• Corruption and harassment

Challenges…..

• E. Environmental issues

• F. Legal problems

• G. Land acquisition and

• rehabilitation

• H. Operation and maintenance

•  

Infrastructure: Opportunities

• A. Agriculture:

• Agriculture and Horticulture markets
• Floriculture parks
• Agro-food processing
• Cold storages

•   B. Energy:

• Generation
• Transmission
• Oil and Gas pipe line

Opportunities….

• C.  Industrial Infrastructure:

• Industrial parks
• SEZ
• Industrial townships 

• D.   Irrigation: 

• Canals and dams

• E.  Tourism:

• Hotels and resorts
• Convention centers
• Trade fairs
• Amusement parks

Opportunities….

• F. Transportation and Logistics

• Roads and Bridges

• Railways

• Airports and Airstrips

• Urban transport

• Minor ports

• Inland water ways

• Truck terminals

• Ware houses 

Opportunities…...

• G.    Urban infrastructure

• Townships
• Water supply and sewerage
• Solid waste management

New Initiatives and Strategies

• New Infrastructure Policy 2007 Drafted
• Objective:
• To provide a fair and transparent policy framework to facilitate and encourage Public Private Partnership (PPP) in upgrading, expanding and developing infrastructure in the State.

Benefits of New Policy

•   

Strategies…..

• Payment for Services

• - Inculcation of
• “Provider charges” and “User pays” Principles
• - Subsidies in user charges for economically weaker sections

Strategies…

• Contractual Structure

• Existing Assets:
• O & M Contracts, Lease of Assets,
• Rehabilitate, Operate Maintain Transfer (ROMT) Contract
• New Assets:
• BT, BLT, BTO, BOT, BOOT, BOO, BOST, BOOST, BOLT
• B: Build, O: Own/Operate, L: Lease, S: Share,
• T: Transfer

Strategies…

• Setting up Special Purpose Vehicles(SPVs) where appropriate

• Selection of Private Sector Partner through a transparent procurement process.

• Procurement in all Projects to be on the basis of a transparent bidding process

Strategies…

• Regulatory Framework

• Suitable mechanisms to be worked out to facilitate expeditious land acquisition

• Set up independent regulatory authorities for some sectors

Institutional Framework

• Infrastructure Development Department(IDD) to be the nodal agency to coordinate PPP projects

• A PPP Cell to be set in IDD to assist in identification, development, implementation review of PPP projects

• District Level Committee under DC to assist PPPs

• Single Window Agency under the Chairmanship of CS/ACS to approve projects up to Rs 50 cr and to recommend projects over Rs 50 cr to HLC

• High Level Committee under the Chairmanship of Chief Minister to approve projects above Rs 50 cr.

THANK YOU