Background Paper: Infrastructure & Investment opportunities in … · 2017. 12. 19. · Roads are...

Background Paper: Infrastructure & Investment

opportunities in Delhi Mumbai Industrial Corridor (DMIC)

Roads 4

Roads – Scenario in India 5

Roads – Scenario in Madhya Pradesh 7

Opportunities in Roads in Madhya Pradesh 12

Logistics 15

Logistics – Scenario in India 16

Logistics – Scenario in Madhya Pradesh 19

Opportunities in Logistics in Madhya Pradesh 23

Investment opportunities in DMIC 26

DMIC in India 27

DMIC in Madhya Pradesh 29

Opportunities in DMIC Influence Area of Madhya Pradesh 30

Contents

4 Destination Madhya Pradesh: Global Investors Summit-II, 2010

Roads


Overview

Roads are an integral part of the core infrastructure and play an important role in economic growth. India’s road network consists of National Highways, State Highways, major District roads, other District roads and Village roads.

India has world’s 2nd largest road network covering a total distance of 3.3 million kms.

The National and State Highways form the economic backbone of the country. These highways have contributed in enhancing economic activities and many cities have evolved into growth centres along major highways.

State Highways and Major District Roads constitute the secondary system of road infrastructure of India. The composition of road network in India is shown in Figure 1.

Figure 1: Length of Roads in India during 2008-09 (in kms.)

Road transport in India accounts for 87% of passenger movement and 60% of freight movement. It is estimated that the national

highways and secondary roads together carry about 80% of the total road traffic.

Road sector’s share in India’s GDP has been growing at the rate of 9.5% since 2000-01. It currently contributes to 4.5% of India’s GDP. India has been taking up upgradation of highways and major roads to two-lane / four-lane / six-lane / eight-lane for efficient transportation. The composition of national highways network by width, is depicted in Figure 2.

Figure 2: National Highways by width 2008-09

Road Sector Initiatives in India

India’s XIth Five Year Plan has identified various avenues of development in the Road sector. The Central Government aims to modernize, expand, and integrate the country's roads with other transport services. It also seeks to mobilize resources for this purpose and to gradually shift the role of Government from that of a ‘producer’ to that of an ‘enabler’.

Estimates suggest that investments over US$90 billion would be required over the

705482%

1280004%

47000014%

265000080%

National Highways / Expressways

State Highways

Major & Other District Roads

Village Roads

30%

53%

17%

Single Lane / Intermediate Lane

Double Lane

Four Lane / Six Lane / Eight Lane

Roads – Scenario in India


next 5 years to improve road infrastructure. Consequently, the Road sector investments would be expected to increase at 19% p.a. during the same period.

In recent years, the Government has made substantial efforts to tackle the sector’s shortcomings and to reform its institutions. Some of the major initiatives include:

A. Launching the ambitious National Highway Development Program (NHDP) which has seven phases and is expected to be completed by 2015. These phases include:

B. Enhancing sector capacity and

improving efficiencies through clear policy directive for greater private sector participation:-

– Sub projects of the NHDP are to be executed through Public Private Partnerships (PPP)

– Investor friendly BOT (Toll) and BOT (Annuity) model

– Incentives such as tax exemptions and duty free import of road building equipments and machinery

C. Financing the development and maintenance of roads by creating a Central Road Fund (CRF), under which

following road related projects will be covered:- – National Highways – State roads – Rural roads – Railway over bridges/under bridges – Road safety enhancement

D. Strengthening the NHAI to act as an

infrastructure procurer and not just provider

E. Improving rural access by launching the Pradhan Mantri Gram Sadak Yojana (Prime Minister’s Rural Roads Program)

F. Reducing the congestion on rail corridors along the highly traffic laden Golden Quadrilateral

G. Increasing public funding for transportation in the Five Year Plans

H. Accelerated Road Development Program for the North East Region to provide road connectivity to all State capitals and district headquarters in the region

Phase I & II Four-laning of the Golden Quadrilateral and NS-EW Corridors

Phase III Four-laning of 12,109 kms.

Phase IV Two laning of 20,000 kms.

Phase V Six-laning of 6,500 kms.

Phase VI Development of 1000 kms. of expressways

Phase VII Other Highway Projects


Roads - Snapshot

Madhya Pradesh is situated in the heart of India with a geographical spread of about 308,000 sq. kms. As a result of its central location, traffic from all the surrounding five states passes through the state’s road/rail network.

Total length of roads in Madhya Pradesh is 91,968 kms. Of the total roads, 61% are village roads, 23% are Major & District roads and 16% are highways – 11% State and 5% National. This is shown in diagram below.

Figure 3: Ratio of type of roads in MP

16 National highways of 5056 kms. length run through the State, which is 3rd highest in India. Figure 4 shows the top 10 states in India by national highways length.

Figure 4: Top 10 States in NH Length

Madhya Pradesh is strategically located on Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore, Delhi- Hyderabad routes.

National highways connect the State to other major cities including Agra, Varanasi, Kanyakumari, Jaipur, Lucknow, Jhansi, Ahmedabad and Allahabad.

A significant length of 717 kms. of Mumbai-Agra National Highway and 511 kms. of Varanasi-Kanyakumari National Highway pass through Madhya Pradesh.

There are convenient road linkages to important western ports including Kandla Port, Mundra, Pipavav, Jawaharlal Nehru Port Trust & Nhava Sheva.

Figure 5: Dewas Bhopal Four lane project (1st

Section)

0

20000

40000

60000

80000

100000

len

gth

in

km

s.

Village Roads

Major & District RoadsState Highways

National Highways

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Length

in

km

s.

Top 10 States in NH Length

Roads – Scenario in Madhya Pradesh

Road sector’s share in GSDP

of Madhya Pradesh stood at

3.21% in 2008-09


Achievements of MP in Road Sector

MP has achieved significant progress in the road sector due to favourable policy environment in the state and initiatives taken by the State Government. Some of the key achievements include:

3277 kms. of village / rural roads, connecting villages to state/ national highways have been constructed by December 2009 under Pradhan Mantri Gram Sadak Yojana (PMGSY)

8279 villages in MP have got connectivity through all weather roads under the PMGSY

Madhya Pradesh Road Development Corporation has completed 6547 kms. of road construction in the State

24 Integrated Border Check Posts being implemented at the cost of Rs.11500 million

Improvements to important tourism / commercial / industrial roads have been completed at fast pace

12 BOT road projects covering 1673 kms. have been successfully executed in state. Expenditure of Rs. 14180 million have been incurred on the same

Figure 6: Betul-Paratwara & Multai-Chhindwara Project

Recent Initiatives in MP for Road Sector

Several initiatives have been taken to enhance the quality and quantity of roads in Madhya Pradesh. Some of the notable initiatives are as under:

Rehabilitation of all the old roadways to make them more durable and to enhance their capacity

Road projects to connect o Divisional HQ with State Capital o Divisional HQ with District HQ o District HQ to Tehsil / Block HQ

Enhancing road connectivity to important tourism / commercial / industrial destinations

Bridging gap in rural connectivity through rehabilitation of 40,000 kms. of roadways under PMGSY

Development of effective maintenance management system for existing and new roads

ADB Programme: Rs. 240.49 billion funds for development of 3300 kms. length roads throughout the state

Mechanized inspection of bridges – to be started using Mobile Bridge Inspection Unit (MBIU)


Madhya Pradesh is strategically situated in the heart of India and is surrounded by five states. Thereby both North-South and East-West Corridors pass through the state.

The Government of Madhya Pradesh has designated the Madhya Pradesh Road Development Corporation (MPRDC) as the sole authority for development of State Highways, on the lines of NHAI. All the work related to State Highways has been transferred to MPRDC, with a view to ensure transparency and to provide fast clearances and speedy implementation for roads projects.

MPRDC has been highly successful in execution of roads projects on BOT model. Based on its successful track record, NHAI has transferred seven 4-laning NHDP projects to MPRDC. The State has enormous potential for BOT road projects with some of the projects having provided super normal profits with payback periods of less than 5 years.

Figure 7: Strategic location of Madhya Pradesh

Continuous increase of vehicles in the State and a road freight industry growing at CAGR of 9.9% creates the need for development of more & better quality roads in the State.

Figure 8: Vehicles in Madhya Pradesh

Chennai -1435 km

Mumbai –779 km

Kolkata -1356 km

Delhi –744 km

Bhopal

0

2000

4000

6000

No

s. in

'0

00

Madhya Pradesh – An Ideal Investment Destination

Madhya Pradesh has proven

track record of highly

successful BOT road projects.

Some of the BOT road projects

in the state have yielded super-

normal returns on investments

with payback periods of less

than 5 years.


Support from the State Government

The Government of Madhya Pradesh provides exceptional support for development of roads infrastructure in the State. Key support initiatives include:

The State Government has increased the limit for overseas borrowings in infrastructure sectors to US$ 500 million from US$ 100 million

Road sector has been proposed as priority sector for development , thereby allowing more funds from banks

Provision to grant permission for developing housing and other activities as part of BOT road projects has been made

ECBs up to 35% of project cost have been permitted for projects under BOT

The private sector is allowed to design, construct and operate the toll roads

Choice of entry / exit points left to the developers

Permission to develop and operate road side amenities

Special category for registration of entrepreneurs carrying out the BOT works

Provision to modify BOT contracts to facilitate the smooth working and execution of project

TRIFAC signed MOU with Central Bank of India to help finance Rs.110 Billion to Industries / Infrastructure projects being implemented in M.P.

State / Central Government would be responsible for land acquisition and

providing the same for development of roads

Moreover, NHAI is authorized to provide capital grant upto 40% of project cost to make a project viable.

Figure 9: Bhopal-Vidisha Project

Policy Initiatives

The Government of Madhya Pradesh has formulated a Road Policy for speedy development and effective regulation of the sector. Key policy areas include:

Road policy lays stress on development of roads with the participation of private sector via BOT and other PPP routes

Suitable amendments to Indian Tolls (Madhya Pradesh) Act, 1932 to facilitate private sector participation

Enabling legislation for regulation and development of the sector through the proposed Madhya Pradesh Highway Bill


Developing existing road network through preparation of Master Plan, providing new links and focusing on highway safety

Developing an efficient Maintenance Management System to make optimal use of the available resources

Setting up of fund for the purpose of State Road Maintenance

Providing incentives to ensure commercial viability of road projects


.

There are ample opportunities for private sector players to invest in the development of road sector in Madhya Pradesh across the following areas:

Construction & maintenance of: o By-passes / Ring Roads near big cities o Bridges / Railway Over Bridges o Interchanges / Elevated Section

through Urban Areas

Construction and operation of Highway related Facilities at entry / exit points

o Transport Nagars o Loading / unloading terminals for

cargo o Ware houses / godowns o Vehicle repair facilities o Shops for vehicle components o Restaurants / Hotels/Motels o Insurance and Medical facilities

Capacity augmentation and improvement of roads by way of Widening of carriage-ways

o Upgrading to 2 / 4 / 6 lane roads o Improving surface quality o Strengthening / reconstruction of old /

weak bridges and culverts o Maintaining / rehabilitating existing

roads / bridges o Strengthening of Pavements o Provision of traffic safety measures

Table 1: Summary of ongoing projects in Madhya Pradesh

Ongoing major road projects

Length (in kms.)

Cost (Rs. Billion)

NHAI 225 15.82

MPRDC 3419 47.43

Total 3644 63.25

Roads are considered to be a

key driver in the growth &

development of Madhya

Pradesh.

Opportunities in Roads in Madhya Pradesh


Table 2: List of Forthcoming Road Sector Opportunities in Madhya Pradesh

Name Length (kms.)

Project Cost (Rs. million)

NHDP IV Projects 835.50 42988.0

BOT Annuity Projects (DPR Stage Phase I)

492.649 8518.6

BOT Annuity Projects (DPR Stage Phase II)

596.20

Road Projects on Regular Contract mode

70.76 1229.0

State Highways Projects on BOT mode

711.00 12551.5

MPSRSP – III Projects (DPR)

1080.36 17070

The State of Madhya Pradesh

has potential investment

opportunities in the roads sector

that are estimated to be more

than Rs. 82 billion.


MP Road Development Corporation Limited

Address: 16-A, Arera Hills, Bhopal 462 011, Madhya Pradesh

Telephone : (+91) (0755) 2765205 / 213 / 196

Fax : (+91) ( 0755) 2572 643

E-mail: [email protected]

URL: http://www.mprdc.nic.in

Public Works Department, Madhya Pradesh

Address: Satpura Building, 2nd Floor, 'C' Wing,Bhopal 462 004 Madhya Pradesh

Telephone : (+91) (0755) 2551 485

Fax : (+91) ( 0755) 2556 527

E-mail : [email protected]

URL: http://www.mp.gov.in/pwdmp/

Madhya Pradesh Trade and Investment Facilitation Corporation Limited

Address: AVN Towers, Mezzanine Floor, 192 Zone -1, M.P. Nagar, BHOPAL-462011

Telephone : (+91) (0755) 2559970 / 2559979 / 2768058

Fax : (+91) ( 0755) 2559971

E-mail : [email protected], [email protected], [email protected]

URL: http://www.mptrifac.org

Key Contacts


Logistics


Overview of Logistics sector in India

India, with a GDP of about Rs 31,297 billion, is estimated to spend 13% of its GDP on logistics, creating an industry size of around Rs. 4,068 billion. The sector has been witnessing double digit year-on-year growth rate since 2002 and is expected to be more than USD 120 billion (Rs. 5,400 billion approx.) by 2015.

Logistics has always been a central and essential feature of the infrastructure sector. Organizations have traditionally concentrated their efforts into manufacturing products and considered the movement and storage of materials as a subordinate errand that formed part of the overheads of doing business. However, over the years, importance of the logistics function has grown, primarily due to appreciation by the organizations of the following critical factors:

Recognition of high logistics cost and opportunities for major savings

Increasing competition for both users and providers of logistics, who have to continuously improve operations to remain competitive

New types of operations that change the dynamics of logistics – such as Just-In-Time, Total Quality Management, Lean Manufacturing, etc.

Need for improved technology for identifying, locating and tracking materials

The logistics industry has consciously strived to be at the focal point of strategy formulation and operational excellence to

continue in its endeavour for providing maximum contribution in value creation

The main constituents of the logistics sector are road transport, rail transport, marine transport, air transport and warehousing & storage.

Figure 10: Main constituents of Logisticssector

The logistics sector in India has evolved over the past two decades from being a pure transportation and warehousing function oriented service to provision of more value added offerings like customs clearance, domestic / international freight forwarding, cross-docking, reverse logistics, freight consolidation, warehousing with modern standards etc.

There has been a growing recognition of logistics in India as a strategic tool for enterprise cost reduction and improvement of organizational efficiency; on the flip side, however, the logistics sector is characterized by dominance of a disorganized market. Transporters with fleets smaller than five trucks account for over two-thirds of the total trucks owned and operated in India and make up 80% of revenues. The freight forwarding segment is

Logistics – Scenario in India

Road Transport

Marine Transport

Warehousing & Storage

Air Transport

Rail Transport


also represented by thousands of small customs brokers and clearing & forwarding agents, who cater to local cargo requirements.

The majority of the logistics is spent on transportation, followed by warehousing, inventory carrying, order processing & administration.

Figure 11: Constituents of Logistics costs in India

Road Transport

India has the second largest road network in the world. The road network currently handles about 60% of the freight and 85% of the passenger traffic. As per data released by the Central Statistical Organisation (CSO), the road sector has recorded an average annual growth of rate of 9.5% from 2000-01 as against 6.5% growth rate of GDP.

Road transport has a dominant role in India’s transportation sector with a share of 4.6% in India’s GDP in 2007-08.

According to the Planning Commission, the Indian economy is expected to grow at an average 9% per annum during the 11th Five Year Plan (from 2007-08 to 2011-12). Considering the GDP growth rate of 9%, it is expected that the road freight industry will be growing at a CAGR of 9.9% from 2007-08 to 2011-12.

Rail Transport

Indian Railways has the largest rail network in Asia and the world’s second largest, under a single management. The network of Indian Railways is divided into 16 zones for better operational control.

Indian Railways transported 803.50 million tonnes of commodity freight traffic during April 2009-Febraury 2010 as compared to 751.30 million tonnes carried during the corresponding period last year, registering an increase of 6.95%. The net tonne kilo meters (NTKM) went up from 485302 million during April 2008-February 2009 to 529076 million during April 2009- February 2010, showing an increase of 9.02%.

The freight traffic carried by the railways during 2008-2009 was 833.31 MT, representing a growth of 4.9% over the performance in 2007-2008. The freight loading for year 2009-10 has been estimated at 882 million tonnes.


Air

India has 80 fully functional airports. Indian airports handled around 1.55 million metric tonnes of cargo in 2006-07 as against 1.39 million tonnes during 2005-06. The five major airports (Mumbai, Delhi, Kolkatta, Chennai and Bangalore) account for around more than 80% of the total air cargo handled in India.

The total cargo traffic at all airports increased from 15.6% in 2005-06 to 21.5% in 2006-07. The cargo traffic recorded a CAGR of 9.5% over the last six years. The cargo carried by air in India accounts for 2% of the international trade by volume and 40% by value.

Ports and Shipping

India’s port infrastructure constitutes of 12 major ports (Kandla, Mumbai, Jawaharlal Nehru, Mormugoa, New Mangalore, Cochin, Tuticorin, Chennai, Ennore, Vishakhapatnam (Vizag), Paradip and Kolkata) and around 200 non-major ports. Of the non-major ports, only around 48 are operational; rest are only fishing harbours.

Shipping and Ports play an important role in the overall logistics system in India. The major ports in the country handled 530.35 million tonnes of cargo during 2008-2009. About 80% of the total volume of ports’ traffic handled was in the form of dry and liquid bulk, with the remaining consisting of general and containerised cargo.

Warehousing

Warehousing industry in India is largely (nearly 50%) controlled by the unorganised sector. This is a significant number considering the fact that warehousing accounts for 20% of the total domestic logistics industry. The current warehousing capacity in India stands at 60-70 million MT. The organised warehousing space is largely managed by the Government.

The boom in commodities and retailing is expected to result in the Indian warehousing sector growing at more than 35% annually. This sector is likely to become a $55 billion industry by 2010-11. By end of 2010-11, India is estimated to have around 45 million sq. ft. of warehousing space.


Roads

Madhya Pradesh has total road length of 91968 kms. 16 national highways with cumulative length of 5056 kms. pass through the state. MP has the 3rd largest network of highways among all the States. The total length of State Highways in Madhya Pradesh is 10249 kms.

Strategic routes of Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore and Delhi - Hyderabad pass through Madhya Pradesh. National Highways connect the State to other major cities viz. Agra, Varanasi, Kanyakumari, Jaipur, Lucknow, Jhansi, Ahmedabad and Allahabad. Roads provide convenient linkages to western ports i.e. Kandla Port, Jawahar Nehru Port Trust. Hence the State has excellent road network providing connectivity to the entire country.

Railways

Madhya Pradesh is well connected with the rest of India with more than 425 trains passing through the State on a daily basis. Out of 425 trains, 175 trains pass through the State capital Bhopal.

Itarsi railway station is strategically located in the centre of country. CONCOR operates three ICDs in the state that are located in Pithampur (near Indore), Mandideep (near Bhopal) and Malanpur (near Gwalior).

Figure 12: Rail map of MP

Airports

There are 5 operational airports in Madhya Pradesh at Bhopal, Indore, Jabalpur, Gwalior & Khajuraho and 25 airstrips, which are available for operationalization. The State has convenient air links from key Indian cities like Delhi & Mumbai to Bhopal, Jabalpur, Gwalior, Indore and Khajuraho. Indore airport has the capability of handling international cargo. Indore and Bhopal are going to commence international operations by next year.

Logistics – Scenario in Madhya Pradesh


Warehousing

Madhya Pradesh Warehousing & Logistics Corporation (MPWLC) is the nodal agency in the State that deals with warehousing related matters.

MPWLC is present in the State through 258 branches and 2524 godowns. Its total warehousing capacity is 8 million tonnes in the State. The average capacity utilization of warehouses is more than 80% for MPWLC owned facilities and 90% for all facilities taken together.

As per the current scenario, there is a shortage of 1.6 million MTs of warehousing capacity in MP, which presents huge potential to investors. To shorten this gap, construction of new godowns / storage facilities of 0.862 million MTs capacity is proposed.

Logistics Infrastructure

The State Government has envisaged creation logistics infrastructure in Madhya Pradesh, to ensure efficient and effective logistics operations for the industry. Some of the key projects are summarized in this section.

Composite Logistics Hub at Powarkheda

The project is envisaged to cover facilities such as:

Logistics infrastructure (Rail sidings for cargo and container movement, rail side warehouses, and Inland Container Depot) to be developed in PPP mode

Storage & Processing Centre (Warehouses for grain, cereal, oilseed,

spices, cold chain for perishables and processing area for agro and horticulture produce). It is proposed to be developed partly in PPP mode and partly by Mandi Board (in case of processing zones) and MPWLC (in the case of procurement based grain warehousing).

Modern Wholesale Market (to be established by M.P. State Agriculture – Marketing Board under APMC Act).

Centre for Perishable Cargo

MP Warehousing and Logistics Corporation is setting up perishable cargo centre at Devi Ahilya Bai Holkar Airport, Indore, which will serve as an important exit point for perishable cargo. For establishing this facility, an area of around 1500 sqm has been earmarked at the airport.

The proposed infrastructure would facilitate receiving of perishable cargo, weighing, customs clearance & security and cold storage etc. The perishable goods to be handled are fruits and vegetables, flowers and cut flowers, meat and poultry products, dairy products, spices, medicinal and aromatic products, pharmaceutical products and vaccines.


Central location

The strategic location of Madhya Pradesh has immense potential to become the ‘Logistics Hub of India’, as being centrally located, it provides inherent advantage of quick accessibility to all parts of the country.

Key markets across India are almost equi-distant from Madhya Pradesh.

Figure 13: MP is strategically located in centre of India

Excellent connectivity

Roads in MP have total road length of 91968 kms., with 16 NHs of 5056 kms. running through the State. Strategically

located on routes of Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore and Delhi- Hyderabad

Rail - Connected with the rest of India through more than 425 trains , passing through the state on a daily basis

Air - Operational airports at Bhopal, Indore, Gwalior, Jabalpur & Khajuraho. International cargo handling capabilities present at Indore airport and international flights from Indore and Bhopal to commence soon

Storage facilities

The State currently has warehousing capacity of over 8 million tonnes and plans to add storage facilities of 0.862 million MTs capacity.

Factor Cost Advantages

Land cost advantage

Manpower cost advantage

Peaceful labour environment

Mumbai

(780 Kms)

(MPV - 1000) Pune

(800 Kms)

(MPV - 206.51)

Bangalore

(1400 Kms)

(MPV - 254.52)

Chennai

(1430 Kms)

(MPV - 362.84)

Hyderabad

(840 Kms)

(MPV - 257.9)

Delhi

(740 Kms)

(MPV - 789.5)

Ahmedabad

(570 Kms)

(MPV - 220.63)

Kolkata

(1350 Kms)

(MPV - 613.19)

Key Markets

(Distance From Bhopal)

MPV – Market Potential Value

Madhya Pradesh – An Ideal Investment Destination

Being centrally located, MP

provides inherent advantage as

a logistics and distribution

hub.


DMIC Influence area

DMIC influence area covers 10 districts of Madhya Pradesh with 2.2 million work force of the state. The development of this area would lead to:-

Construction / Augmentation of major arterials, highways and expressways

Additional feeder roads

Regional connectivity / feeder lines to DFC Rail heads / industrial nodes

Logistics Infrastructure including free trade warehousing zone, container freight stations, cargo hubs, truck terminals, etc

P&G Success story

Proctor & Gamble, the international FMCG

giant, chose Bhopal to establish their central

warehouse for all FMCG products. The cost

saving due to strategic location has helped

the company in slashing the price of their

products, thus gaining a vital competitive

edge in the price sensitive market.


Composite Logistics Hub

The proposed project envisages setting up of composite logistics hub at three different locations in MP:

Bina

Ujjain

Jabalpur

The following facilities are proposed to be provided at the logistics hub:

ICD

Rail side warehouse

Cold storages

Modern warehouses

Other utilities / facilities

The proposed project shall be developed on PPP basis. The land for the project shall be allotted by the government.

The estimated investment by the private partner will be Rs.1000-2000 million.

Construction of Modern Warehouses

Modern warehouses are proposed to be built at following locations:

Balaghat

Katni

Shahdol

Shivpuri

Morena

These modern warehouses are expected to have modern infrastructure facilities like racks, RFID-enabled operations, very narrow aisle machines, auto storage retrieval systems (ASRS), path guided

automation, automated conveyer systems. Other facilities that are expected at these warehouses include fire and safety systems, warehouse management systems, RFID-enabled operations, ground plus level of racking, material handling equipments including very narrow aisle man-up machines, facilities for value added activities like packaging, kitting, shrink wrapping, repairs etc.

Capacity of these warehouses shall be around 2-3 lakh tonnes. The estimated investment per warehouse is Rs. 700-1000 million.

O&M of Centre for Perishable Cargo (CPC) at Indore

The required investment in the development of the infrastructure facilities will be made by the developer of the CPC. This project however, envisages the induction of a strategic partner. The main responsibility of the strategic partner will be to operate and maintain the infrastructure which actually delivers the services to the international standards. The strategic partner is expected to carry out the operations and maintenance of the CPC including following activities:

Know-how and technology in handling cargo and regular day to day functions for the operation and maintenance CPC

Capacity building of the entire CPC through well trained personnel

Cargo related activities using the following facilities:

o Cold storages with different technical specifications for different types of perishable cargo

Opportunities in Logistics in Madhya Pradesh


o X – Rays for scanning of the cargo

o Automated and computerized document processing

o Modern material handling equipments

Other opportunities

Construction of new storage facilities of 0.435 mn. MT capacity under 7 years guarantee scheme of GoI

0.427 mn. MT capacity in 6 districts of Bundelkhand under Bundelkhand package.


Madhya Pradesh

Warehousing & Logistics

Corporation

Address: Office Complex, Block ‘A’ Gautam Nagar, Bhopal

Telephone : (+91) (0755) 2600509, 2600510

Fax : (+91) (0755) 2600384, 2600213

E-mail : [email protected], [email protected]

URL: http://www.mpwarehousing.com

Madhya Pradesh State Industrial Development Corporation Limited

Address: AVN Towers ,192 Zone -1,M.P Nagar , BHOPAL-462011

Telephone : (+91) (0755) 4270370

Fax : (+91) ( 0755) 4270280


URL: http://www.mpsidc.org/


Address: AVN Towers, Mezzanine Floor, 192 Zone -1,M.P Nagar , BHOPAL-462011

Telephone : (+91) (0755) 2559970 / 2559979 / 2768058

Fax : (+91) ( 0755) 2559971



Key Contacts


Investment opportunities in DMIC


Vision of the DMIC:

“To create strong economic base

with globally competitive

environment and state of the art

infrastructure to activate local

commerce, enhance foreign

investment and attain sustainable

development.”

Overview

The Government of India has announced establishment of the Dedicated Freight Corridor (DFC) between Delhi and Mumbai, covering an overall length of 1483 kms. and passing through the States of U.P., NCR of Delhi, Haryana, Rajasthan, Gujarat and Maharashtra, with end terminals at Dadri in the National Capital Region of Delhi and Jawaharlal Nehru Port near Mumbai.

This Dedicated Freight Corridor offers high-speed connectivity for High Axle Load Wagons (25 Tonne) of Double Stacked Container Trains supported by high power locomotives.

This proposed high-speed connectivity offers immense opportunities for development of an Industrial corridor along the alignment of the connecting infrastructure. A band of 150 kms. (Influence region) has been chosen on both the sides of the Freight corridor to be developed as the Delhi-Mumbai Industrial Corridor. In addition to the influence region, DMIC would also include development of requisite feeder rail / road connectivity to hinterland / markets and select ports along the western coast.

Goals of DMIC

The developmental planning for DMIC aims to achieve certain end results with implementation that would ensure realization of envisaged vision for the project and lead to economic development. Accordingly the project goals for DMIC are:

Double employment potential in five years (14.87% CAGR)

Triple industrial output in five years (24.57% CAGR)

Quadruple exports from the region in five years (31.95% CAGR)

Concept of Node Based Development

An Investment Region (IR) would be a specifically delineated industrial region with a minimum area of around 200 square kms. (20,000 hectares). While the maximum limit is based on the specific site’s potential, an Industrial Area (IA) would be developed with a minimum area of around 100 square kms. (10,000 hectares) for establishment of manufacturing facilities for domestic and export led production along with the associated services and infrastructure. Identification of suitable locations for development of IRs and IAs along the DMIC has been carried out on basis of envisaged socio-economic benefits.

DMIC in India


Location of Investment Regions and Industrial Areas

Considering the potential for growth and inherent strengths of various locations along the DMIC influence area, 11 investment regions and 13 industrial areas have been identified in 7 States viz. Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat, Madhya Pradesh and Maharashtra in consultation with respective State Government agencies.

Phasing of Projects

It is envisaged that the physical development for DMIC will be achieved in phases over a time frame of 9 years starting from January 2008. A time frame of five years is envisaged for Phase-1 (i.e. by December, 2012), followed by four years for Phase-2 (i.e. by December 2016).

Figure 14: IRs / IAs envisaged for DMIC in alignment to DFC


The envisaged Investment Regions are:-

Pitampura-Dhar-Mhow

Ratlam-Nagda

The envisaged Industrial areas are:-

Neemuch-Nayagaon

Shajapur – Dewas

These IRs / IAs are expected to have a positive developmental impact in 10 districts of Madhya Pradesh, which cover an area of 2866 kms. The DMIC influence area in Madhya Pradesh has population of 4.5 million, which is 7.5% population of the state. A work force of 2.2 million in the State would fall under the DMIC influence area.

DMIC in Madhya Pradesh

Figure 15 : DMIC selected Investment Regions and Industrial Areas

Based on the potential for

growth and inherent strengths

of various locations along the

DMIC influence area, two

Investment Regions and two

Industrial Areas have been

identified as DMIC Nodes in

Madhya Pradesh.


Investment Regions and Investment Areas envisaged in Madhya Pradesh under DMIC present a multitude of opportunities to investors. These opportunities include:-

Development of Infrastructure & Logistics Sector

Development of IRs / IAs and connecting the same to DFC would require:-

Construction / Augmentation of major arterials, highways and expressways

Developing additional feeder roads

Developing regional connectivity / feeder lines to DFC Rail heads / industrial nodes

Developing regional MRTS links

Up-gradation / development of existing / Greenfield airports and airstrips

Logistics Infrastructure including free trade warehousing zones, container freight stations, cargo hubs, truck terminals, etc.

Development of Industrial Infrastructure

IRs / IAs would also require development of industrial infrastructure such as:

Power Plants, Renewable Energy Systems

Special Economic Zones, Industrial Parks

IT-ITES / Biotech / Agro / Food -Processing Hubs

Augmentation of water supply and drainage systems in the region for industrial purposes

Development of Social Infrastructure

Development of social infrastructure is required for the well being and prosperity of the individuals residing in the DMIC influence area. The required actions for social infrastructure include:-

Develop requisite urban infrastructure

Augment water supply and drainage systems in the region

Recycle water and reuse facilities

Develop Centers of Educational Excellence in various disciplines such as Management, Engineering, Technical Studies

Develop Knowledge Cities & Integrated Townships

Early Bird Projects

Pithampur-Dhar-Mhow Investment Region and Ratlam-Nagda Investment Region are proposed to be developed under overall DMIC project plan. Master planning of both the projects is complete. Early Bird Projects have been identified in each of these Investment Regions, which offer great opportunities with attractive returns to private investors.

Nodal Agency for DMIC in Madhya Pradesh

Madhya Pradesh Trade and Investment Facilitation Corporation Limited (MPTRIFAC) has been designated as Nodal Agency for DMIC in Madhya Pradesh.

Brief description on the projects in these Investment regions is provided in the following section:

Opportunities in DMIC Influence Area of Madhya

Pradesh


Pithampur-Dhar-Mhow Investment Region

Master planning of Pithampur-Dhar-Mhow (PDM) Investment region is complete. This investment node offers excellent opportunities for investment. Some of these include:

1. Early bird projects

o Economic Corridor o Knowledge City o Multi-modal Logistics Hub o Water Supply and Waste Management

System

2. Other projects

o Water Supply from Narmada o Water supply and Sewage System for

Green Filed Integrated Township o Water Harvesting & Recharge from

Gambhir River o Improvement of Public Transport

Connectivity with the Region o BRT System for the Investment

Region o Betma Hill Regeneration Project o Business Park o Incubation Park o Green Field Integrated Township

Economic Corridor

An Economic Corridor (EC) is proposed from Indore Airport to Pithampur Industrial Area. This EC is anticipated to be an economic growth axis and a transport link connecting the influence area of Indore and the industrial area of Pithampur.

The increasing industrial and business activities in this region presents with opportunities for development of industries,

businesses, skills & knowledge centers, residential, recreational and social infrastructure.

The proposed economic corridor is approximately 20.3 kms. in length. It is proposed that a 300m area on either side of the corridor would be developed as part of the project.

Some key aspects of the project include:-

Connectivity to 3 important regional roads linking NH-59, Rau-Pithampur Road and Mhow-Pithampur Road, providing crucial connectivity

8.41 million sq. m. built up area planned for development of facilities

Overall project cost of Rs. 112,142 million

IRR in range of 15%-20% in base scenario

Figure 16: Layout of proposed Economic Corridor


Key advantages of this project include:

Green-field site, hence very high possibility of development

Presence of airport (Indore) and major industrial area (Pithampur)

Connectivity through important road links

Strong business & industrial base in the region

Emerging urban belt along Rau-Pithampur road

Extension of upcoming ‘Super Corridor’

Knowledge City

A Knowledge City is being developed at Narwar near Ujjain as one of the early bird projects. The objective of establishing a Knowledge City is to meet the demand for skilled workforce in the DMIC influence zone.

The Knowledge City is anticipated to be an integrated township providing infrastructure for academic institutions, students and faculty housing, support social and physical infrastructure. It is intended to have a sustainable economic base around educational and institutional activities for technical and vocational skill development. The Knowledge City is intended to be a ‘National Centre of Excellence’.


Knowledge City proposed to have a total capacity of approximately 50,000 students, 3823 faculty, and 3546 staff by year 2041

Planned to comprise 7 specialized faculty clusters along with support infrastructure

To be developed in six phases over period of 30 years

Availability of Govt. owned land near Narwar

419 ha. of land identified

IRR in range of 15%-20% in base scenario

Figure 17: Potential demand for Knowledge city

Key advantages of this project include:

Theme based specialized academic cores supported by social infrastructure

Well connected to regional and national transport nodes and cities in the region

PPP led development model

Infrastructure led City

An Integrated Township

0

10000

20000

30000

40000

2016 2021 2026 2031 2036 2041

Inta

ke p

er

annum

Potential for Knowledge City

Potential Demand

Demand Catered by Knowledge City


Multi-Modal Logistics Hub (MMLH)

A Multi-modal Logistics Hub is proposed to be developed along the NH-3 bypass near Pithampur. The MMLH is envisaged as a facility that will improve the logistics integration of the region and thereby driving the industrial growth with improvement in cost competitiveness of the industry. The MMLH will provide facilities and services for collection, distribution, storage and transportation of goods meant for exports and imports at competitive cost and fast turnaround times.

The significant presence of large, medium and small industries in the region and increasing use of containers, in international and domestic trade, suggest significant potential for such facilities and services. The logistics hub will be positioned to improve efficiency of operations of existing industry in the region as well as improve the strategic attractiveness of the region for various industries like warehousing and logistics operations.


An area of 175 ha considered for development of following component / product mix: o Railway sidings o Bonded Area for Customs, etc. o Gate Complex, Commercial

Complex o CFS, Stacking facilities and

Movement Areas o Truck Terminals and other Parking o Processing, Packaging and

Warehousing o Amenities, Utilities, Service Areas o Open and landscaped spaces

Overall project cost of Rs 5890 million

IRR around 15%

Figure 18: Projected container traffic at MMLH

Key advantages of this project include:-

Significant presence of industries in the region

Increasing use of containers

Gains in operational efficiency for industry

Upcoming development of P-D-M investment region provides a ready market

Integrated development plan

Trade & industrial growth in India

Water Supply and Waste Management System

A holistic and comprehensive water supply and waste water management system for Pithampur Industrial area is envisaged to be developed under this project. The water supply project has been conceptualized keeping in view ensuring continuous 24x7 water supply for the industrial area.

0

200000

400000

600000

800000

TE

U / a

nn

um

Projected Container Traffic at MMLH


Key aspects of this project include:-

Existing water distribution system would be inadequate to meet the increased demand

Proposed system to ensure continuous 24x7 water supplies for the industrial area

Pithampur industrial area spread over 3172 ha.

System to cater to demand of Pithampur Industrial Area and Pithampur Municipal area

Reduction in water losses and wastage owing to old distribution system

To develop proper waste water and sewerage system for the region

Construction cost approximately Rs. 5500 million

Equity IRR of 17%

Figure 19: Demand for the water in Pithampur region

Key advantages of the project include:-

A large industrial area as potential user

Upcoming development of Pithampur-Dhar-Mhow investment region

Mandatory provision of ETP, STP or Septic Tank for each industrial unit

Water Supply from Narmada

This project envisages the supply of water from Narmada to the Investment region. Key aspects of the project include:

320 MLD of water to be drawn from Narmada at master reservoir at Betma hills and Khalghat

A pipeline - 68 kms. long will be aligned to NH 3

Four pumping station and a water treatment plant Gujri village

Estimated cost of the project is Rs. 9000 million.

Equity IRR (without VGF) - 15.8%

Equity IRR (with 30%VGF) - 19%

Water Supply and Sewage System for Green-Field Integrated Township

The project envisages the water supply and sewage evacuation plan for the green field township in Pithampur Industrial Area. Key aspects of the project include:-

Gross demand of water is estimated at 58.2 MLD in the green-field township

Gross sewage generation is estimated at 40 MLD

Total estimated project cost is Rs. 3410 million

Estimated project IRR is 17% and Equity IRR is estimated at 19%

0

50

100

2009 2011 2026 2041

mld

Projected Demand for Water in Pithampur region

Industrial Area


Drainage and Rainwater Harvesting for Gambhir River

The project envisages water harvesting and re-charging of Gambhir River. The project proposes building of check dams and percolation tanks on Gambhir River. The project also proposes the creation of vertical shafts to recharge tributaries of Gambhir River. The estimated cost of this project is Rs. 65 million.

Improvement of Public Transport Connectivity with the Region

The project envisages the improvement in the public transport connectivity with major centers within the Investment Region. The project cost is estimated at Rs. 12660 million.

BRT System for the Investment Region

The project envisages development of a Bus Rapid Transit System (BRTS) in the IR which integrates with Indore BRTS. Length of the BRT network would be of 63 kms. at estimated cost of Rs. 28890 million. The Project IRR and Equity IRR are estimated to be 21% and 30% respectively.

Figure 20 : Layout of BRT system

Betma Hill Regeneration Project

A site area of 22.86 sq. kms. near Betma hills has been identified for development of Tourism Facilities, Recreational Facilities, Art and Craft Facilities, Residential and Institutional Facilities along with Vegetation of Betma hills. The estimated project cost is of Rs. 37060 million.

Business Park

An area of 0.8 kms. has been identified inside Indore SEZ for development of a Business Park. The components of the Business Park include office spaces, commercial spaces, hotels, hospitals and public utilities. The estimated project cost is Rs. 17910 million with project IRR of 17% and equity IRR of 26%.

Figure 21: Layout of Business Park


Incubation Park

A site area of 1.9 kms. has been identified near Pithampur for development of an Incubation Park. The components of the Incubation Park include R&D Facilities, Manufacturing Units, supporting Residential, Commercial and Public Facilities. The estimated project cost is Rs. 21900 million with project IRR of 13% and equity IRR of 22%.

Figure 22: Layout of Incubation Park

Ratlam-Nagda Investment Region

The detailed development plan of the Ratlam – Nagda Investment region is under preparation.

A list of proposed projects in this investment region is furnished in Table 3.


Table 3: List of Early bird projects in Ratlam - Nagda Investment Region

Early Bird Projects in Ratlam-Nagda Investment Region

Development of a Multi-Modal LogisticsPark in Ratlam District

Development of a Gas based Power Plant (100 MW) in Ratlam / Ujjain district

Development of Power Equipment Manufacturing Hub (PEMH) in Rajgarh District

Development of Bio-Technology Park in Ratlam District

Development of a Food Park in Neemuch District

Development of Economic Corridor along the road connecting Ratlam and Sailana (20 kms.)

The DMIC in Madhya Pradesh

presents several investment

opportunities that cut across

several sectors. With a ready

market envisaged, all

investments made in the DMIC

influence area will yield high

returns.


Notes

Madhya Pradesh State Industrial Development Corporation Limited

Address: AVN Towers ,192 Zone -1,M.P Nagar , BHOPAL-462011

Telephone : (+91) (0755) 4270370

Fax : (+91) ( 0755) 4270280


URL: http://www.mpsidc.org/


Address: AVN Towers, Mezzanine Floor, 192 Zone -1, M.P. Nagar, BHOPAL-462011

Telephone : (+91) (0755) 2559970 / 2559979 / 2768058

Fax : (+91) ( 0755) 2559971



Madhya Pradesh Audyogik Kendra Vikas Nigam (Indore) Ltd.

Address: Free Press House, 1st Floor, 3/54 – Press Complex, A.B. Road, Indore – 452008

Telephone: (+91) (0731) 4070976, 2556111, 2574311

Fax: (+91) (0731) 2572629

Email: [email protected]

URL: http://www.mpakvnindore.com

Madhya Pradesh Audyogik Kendra Vikas Nigam (Ujjain) Ltd.

Address: Nana Kheda Bus Stand Campus, Indore Road, Ujjain-456010

Telephone: (+91) (0734) 2524980, 2524981

Fax: (+91) (0734) 2524982

Email: [email protected]

URL: http://mpakvnujjain.com

Key Contacts

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