Friday, Oct 31, 2014

States to form joint ventures for DMIC infrastructure by Feb-end

Written by Shruti Srivastava | Posted: February 5, 2014 3:05 am

The special purpose vehicles (SPVs) for implementation of six projects pertaining to development of trunk infrastructure under the Delhi-Mumbai Industrial Corridor (DMIC), including that in Madhya Pradesh and Greater Noida in Uttar Pradesh, are likely to be set up by the end of this month by the respective states.

A senior official told The Indian Express that all the required approvals before setting up of SPVs have been obtained along with nod from the state governments. “The states have said that by February end the SPVs should be in place. On the part of the Delhi Mumbai Industrial Corridor Development Corporation (DMICDC), the trust will release funds to get the projects going,” the official said.

The Cabinet Committee on Economic Affairs (CCEA) nod required in cases where the funding is more than Rs 300 crore has already been obtained along with the go-ahead from both the DMICDC and the state governments.  States have completed the land acquisition process as well, the official said adding that Vikram Udyogpuri near Ujjain, MP; integrated industrial township at Greater Noida, UP; water supply project, MP; model solar power project, Neemrana, Rajasthan and construction of a new rail line between Bhimnath and Dholera, Gujarat, have received the requisite approvals.

Except for the solar power and water supply projects, all others are 50:50 JVs between the DMICDC and the states and will give a much-needed boost to the manufacturing sector. The solar power project at Neemrana is a 100 per cent subsidiary DMICDC.

Experts say that the move will finally kick-start the work on the Delhi-Mumbai corridor. “It is definitely a good development. As such, without the SPVs, the projects cannot take off as the SPV is needed to be the counter-party to the design-build contracts. The time taken by DMICDC for preparation of the projects is time well spent,” said Manish Agarwal, executive director, PwC. He added that the trunk infrastructure could be up in three years, if the project was awarded at this point.

The joint statement issued after the meeting between Prime Minister Manmohan Singh and his Japanese counterpart Shinzo Abe on January 25 expressed their expectation “for investment by Japanese companies in NIMZs in general and in India-Japan joint projects such as the DMIC and the Chennai-Bangalore Industrial Corridor in particular”. Japan has committed $4.5 billion in the 1,483 km DMIC.

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