Presentation on Strategies for Infrastructure Development in Karnataka

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Presentation on Strategies for Infrastructure
Development inKarnataka

• By V. P. Baligar

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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.

3
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

4
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

5
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
•  

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Challenges

• C. Accountability issues
• Maintenance of transparency
• Accountable to the legislature
• Scrutiny by CAG
• D. Bureaucratic hurdles
• Clearances from a large number
• of agencies
• Delay in processing
• Corruption and harassment

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Challenges..

• E. Environmental issues
• F. Legal problems
• G. Land acquisition and
• rehabilitation
• H. Operation and maintenance
•  

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Infrastructure Opportunities

• A. Agriculture
• Agriculture and Horticulture markets
• Floriculture parks
• Agro-food processing
• Cold storages
•   B. Energy
• Generation
• Transmission
• Oil and Gas pipe line

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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

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Opportunities.

• F. Transportation and Logistics
• Roads and Bridges
• Railways
• Airports and Airstrips
• Urban transport
• Minor ports
• Inland water ways
• Truck terminals
• Ware houses 

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Opportunities...

• G.    Urban infrastructure
• Townships
• Water supply and sewerage
• Solid waste management

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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.

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Benefits of New Policy

•   

• Savings in costs due to innovative designs,
  timely project implementation and higher
  efficiencies in operations
• Enhanced quality of services to users due to
  better managerial practices efficiencies
• Reduction in, and gradual elimination of, pricing
  constraints
• Enabling public funds to be earmarked for other
  commercially non-viable but socially justifiable
  projects
• Financial innovation and development of
  cost-effective solutions
• Greater employment opportunities in the
  infrastructure sector

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Strategies..

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

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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

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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

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Strategies

• Regulatory Framework
• Suitable mechanisms to be worked out to
  facilitate expeditious land acquisition
• Set up independent regulatory authorities for
  some sectors

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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.

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THANK YOU