DMIC

Industrial Corridor – a Japanese investment

(DMIC)Presented by

Dheeraj Rathi

Takeshi Kanda

December 6th 2014 Regional Conference ICAI(WIRC)

Japan doubles its investment in

India to $35 billion

The red carpet, not red tape awaits you. As software is

incomplete without hardware, India needs Japan. Mr Modi

Cooperation is well

understood in Indian hierarchy

Historic Visit of Emperor Akihito

to boost India-Japan ties

Deep cultural links boost

strategic tiesJapanese PM on Republic Day

President with Japanese PM

at Cabinet PR Office

1 Billion People talking about Japan in a week…..

Disclaimer: Presentation not to solicit investment

Symbolically a very significant alignment in Asia…..

Disclaimer: Presentation not to solicit investment

Contents

1• Intuitive India

2• Why India and Japan

3• DMIC Structure and History

4• Why DMIC Envisioned

5• How it will be Executed

6• What it will Look Like

7• Challenges for the Project

8• Japan Perspective

9• Opportunities way ahead

ICAI WIRC Conference: Not for Advisory or Solicit Investments

Intellect is what worlds uses, As Indians we are Intuitive


Intuition has to be a Natural Choice


In India its Default and not Design…….

"I do not want to get material life, do not want

the sense-life, but something higher." That is

renunciation. Then, by the power of meditation,

undo the mischief that has been done

- Swami Vivekananda


We make things happen, despite speed breakers……

One needs to be slow to form convictions, but once formed

they must be defended against the heaviest odds.

– Mahatma Gandhi


Innovation is called here Jugaad…….

”It is the mark of an educated mind to be able to

entertain a thought without accepting it.” - Aristotle


India not Emerging but reemerging Economy

Entrepreneurial Spirit had been and will be bed rock to Indian Growth

China Opens

India opens


Promise to Potential still room for growth

Gro

wth

in la

st c

entu

ry

1

3.5

5.64

7.045.94

7.97

0123456789

%

India Growth RateSource: RBI


About DMIC


Mega infra-structure project of

USD 90 billion covering an overall

length of 1483 KMs between Delhi

and Mumbai

Incorporates Nine Mega Industrial

zones of about 200-250 sq. km.,

high speed freight line, three

ports, and six airports; a six-lane

intersection-free expressway

connecting Mumbai & Delhi and a

4000 MW power plant

A band of 150 km (Influence

region) has been chosen on both

sides of the Freight corridor to be

developed as the Delhi-Mumbai

Industrial Corridor

Divided into IR and IA across the

corridor.

A Basic Concept


Area of Influence

DMIC influence area comprises of population of 178 Million (17% of total population of the country).

DMIC states contribute 50% of agricultural produce of principal crops ,60% of overall exports from the country, 52% of

overall FDI equity investments into the country (Jan 2000-Dec 2006).

Investment Regions: ~ 200 Sq KM

Dadri-Noida- Ghaziabad Region in Uttar Pradesh as General Manufacturing Investment Region;

Manesar-Bawal Region in Haryana as Auto Component/ Automobile Investment Region;

Khushkhera-Bhiwadi-Neemrana Region in Rajasthan as General Manufacturing/ Automobile/ Auto Component Investment

Region;

Bharuch-Dahej Region in Gujarat as Petroleum, Chemical and Petro-Chemical Investment Region (PCPIR);

Igatpuri-Nashik-Sinnar Region in Maharashtra as General Manufacturing Investment Region;

Pitampura-Dhar-Mhow in Madhya Pradesh as General Manufacturing Investment Region.

Industrial Areas: ~ 100 Sq KMMeerut-Muzaffarnagar Zone in Uttar Pradesh as Engineering & Manufacturing Industrial Area;

Faridabad-Palwal Zone in Haryana as Engineering & Manufacturing Industrial Area;

Jaipur-Dausa Zone in Rajasthan as Marble/Leather/Textile Industrial Area;

Vadodara-Ankleshwar Zone in Gujarat as General Manufacturing Industrial Area;

Industrial Area with Greenfield Port at Dighi in Maharashtra

Neemuch-Nayagaon in Madhya Pradesh as Engineering and Agro- Processing Industrial Area.

Project Categories and Goals Envisaged


Category-1: Projects through Public Private Partnership (PPP Viable Projects)

Logistics Infrastructure;

Power Plants, Ports and Airports;

Special Economic Zones, Industrial Parks, IT/ITES/Biotech Hubs and

Agro-Processing Hubs;

Knowledge Cities, Integrated Townships; and

Augmentation of selected National and State Highways.

Category-2: Other Projects (Non- PPP Projects)

Augmentation of rail linkages and development of connectivity to the identified IR/ IA;

Provision of requisite urban infrastructure;

Augmentation of industrial areas;

Provision of missing links and augmentation of state highways.

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)

7 Nodes being developed in DMIC Phase 1

1. Dadri – Noida Ghaziabad IR, UP

2. Manesar – Bawal IR, Haryana

3. Neemrana – Khushkhera – Bhiwadi IR,

Rajasthan

4. Pithampur- Dhar - Mhow IR, MP

5. Ahmedabad – Dholera IR, Gujarat

6. Nashik– Sinnar – Igatpuri IR,

Maharashtra

7. Dighi Port IA, Maharashtra


DMIC Ownership and Structure

Apex Authority

Haryana GujaratMadhya Pradesh

Uttar Pradesh Rajasthan Maharashtra

DMICDC

Union Finance Minister as Chairman, other Cabinet

Ministers and Six Chief Ministers of DMIC States as

Members

Special Purpose Vehicle

Haryana State Industrial

& Infrastructure

Development

Corporation

Gujarat

Infrastructure

Development

Board

Trade and

Investment

Facilitation

Corporation Limited

Greater Noida

Industrial

Development

Authority

Bureau of

Investment

Promotion

Maharashtra

Industrial

Development

Corporation


Sl.

No.

Particulars Percentage

Shareholding

1. Government of India represented through Department

of Industrial Policy & Promotion, Ministry of

Commerce & Industry.

49.0%

2. Japan Bank for International Cooperation (JBIC) 26.0%

3. Housing and Urban Development Corporation Limited

(HUDCO)

19.9%

4. India Infrastructure Finance Company Limited (IIFCL) 4.1%

5. Life Insurance Corporation of India (LIC) 1.0%

WHY DMIC WAS ENVISAGED


Urbanization in form of cities have majorly driven the GDP

growth rates within majority of the progressive states in India

Delhi

Rajasthan

Kerala

KarnatakaWest Bengal Gujarat

Andhra Pradesh

Tamil Nadu

Uttar Pradesh

Maharashtra

50

Y Axis

100

90

80

70

60

40

30

20

10

0 X Axis

12.011.511.010.510.09.59.08.58.07.50.0

Jharkhand

Orissa

Jammu & Kashmir

Bihar

Punjab

Assam

Haryana

Madhya Pradesh

Chhattisgarh

GDP Growth rate CAGR % (2000-10)

Urb

an

izati

on

Percen

tag

e %

Urbanization Percent vs GDP growth %Size of bubble indicates GDP share of India

Source: CBHI, Team Analysis

DMIC States- Traditional Industrial Base

Approx. 43% contribution to the

country’s GDP

Contributes to more than half of

India’s industrial production &

exports

Accounts for over 40% of

workers & number of factories

across India


Early Bird Project: Exhibition cum Convention Centre Aurangabad

Cities will account for nearly 70% of India’s GDP by 2030

New DMIC Cities will help to meet pressures of urbanisation and also lead India’s economic

growth for the next 20 years


Multi-Modal Logistics Park at Rewari

Philosophy - Decentralised Regional Development


Smarter City Solution


IT Based City Operations & Governance Platform


A Compact city that

promotes the creation of

neighborhoods and walkable

places connected by transit

DMIC Logistics Data Bank

Aimed at improving competition, reducing transportation lead time and cost by sharing

container movement information on real time basis among all agencies in the Supply Chain

using an IT based platform.

Necessary to create an extensive database at an early stage to generate rapid changes in

supply chain.

NEC working on the Pilot Project


HOW DMIC WILL BE EXECUTED


Project Funding

Setting up of a Project Development Fund (PDF),

referred as DMIC-PDF, by raising at least INR 1000

Crore funds (US$250Million) which would be used as a

Revolving Fund

75% PPP

Budgetary Resources

DMIC PDF

Other sources

Government of Japan-

50% (by way of untied loans)

Govt. of India - 50% (by way of a grant)

DMIC Project Phases


7 Nodes being developed in DMIC Phase I

1. Dadri – Noida Ghaziabad IR, UP

2. Manesar – Bawal IR, Haryana

3. Neemrana – Khushkhera – Bhiwadi Raj

4. Pithampur- Dhar - Mhow IR, MP

5. Ahmedabad – Dholera IR, Gujarat

6. Nashik– Sinnar – Igatpuri Maharashtra

7 Dighi Port IA, Maharashtra

Series of PPP and NON PPP projects to

form the elements of each node.

Sources of Funds

• Grant assistance of up to 20 percent of the project cost

• Grant by the Asian Development Bank (ADB) and World Bank

• Loans will be provided to infrastructure companies by India Infrastructure Finance Company Ltd. (IIFCL)

Public-Private Partnerships (PPP) via Viability Gap Funding (VGF)

• Main project stakeholder with a 26% share

• Conditions on JBIC investment entail the granting of up to 85 percent export credit to Japanese companies importing products to India

• Overseas investment loans to support overseas investment by Japanese firms into India

Japan Bank for International Cooperation (JBIC)


Consultations with village communities


Skill Development


WHAT DMIC WOULD LOOK LIKE


Cities with world-class infrastructure

Roads

Hierarchy of Arterial and other Roads with

dedicated lanes for Public Transport,

Cycling, Walking


World-class amenities

Power Water

Total Requirement: 1,700 MW

Phase I : 400 MW

Total Demand = 950 mld

Phase I = 260 mld


Pithampur-Dhar- Mhow IR


Pithampur-Dhar- Mhow – Master Plan


Water Supply System & Phase 1 of IR

Replacement & Rehabilitation of

existing system and O&M

Raw water Source: Mahi dam

Water Allocation: 90mld

Length of Pipeline: 92 km

Total project cost : Rs. 350 Crore

To be implemented on DBFOT

Concession period : 30 Years


Multimodal Logistics Hub at Pithampur

Site Area : ~1.8 sq km

Design Capacity: 0.63 million TEUs

Indore-Dahod railway link under

implementation will connect it to the DFC

Current Status

Land Acquisition

Government land (0.158 sq. km) has

been transferred & possession taken

For Private land of 1.6214 sqkm,

Sections 4 & 6 notifications have been

completed and section-9 has been

issued.

Project Structuring being undertaken


Economic Corridor – Indore to Pithampur

Link between Pithampur and Indore (RoW-

75 M)

Economic Infrastructure Development

Mixed Use Based Product Mix

Current Status

Project referred to the State Steering

Committee

Land Acqsn - 0.97 sq. km reqd. for 75m

ROW ; comprising 0.1962 sq. km of Govt

land

Administrative approval of State Govt. for

land acquisition / transfer has been

accorded


Knowledge City near Ujjain

Current Status

Land Acquisition: 2.18 sq. km is Govt land. 2.09 sq. km already transferred)

Private portion: notification issued u/s 4 and 6 and action u/s 9 is being completed for

2.08sqkm; for remaining 0.16sqkm, Section 4 has been issued

Development of initial infrastructure i.e. access road, boundary wall, water and power line

would be initiated through DMIC funds.

ToR for inviting bids from consultants for detailed engg and TA is under finalisation

50 km from Indore

Planned Area: 4.42 sq km

Will provide skilled & technical workforce in

the DMIC

Cluster led development

Projected Capacity - 50,000 students

Total Population - 64,500


Khushkhera-Bhiwadi-Neemrana IR

Early Bird Projects:

Aerotropolis

Knowledge city

Neemrana - Bhiwadi Road link (50 km)


Concept Master Plan for KBN Investment Region

Area: 165sq km

Urbanisable Area – 101

Sq.Km

Target Population: 1.3million

Projected Employment –

0.55mn

Investment Region target

industries - Electronic,

Automotive,

Pharmaceuticals, Bio- tech

and ICT


Model Solar Project-Neemrana

MoU : New Energy & Industrial Technology

Development Organization (NEDO), Ministry of New

& Renewable Energy (MNRE), Ministry of Finance

(MoF) and DMICDC dated April 30, 2012

Location : Neemrana Industrial Park, Japanese

Zone, Rajasthan, INDIA

Project Scheme : 6.00 MWp Solar PV & 1.6 MW DG

Power

5.00 MWp Solar Power Project Feeding Power to

the Commercial Grid under JNNSM scheme

1.00 MWp Solar Power Project and 1.60 MW

Diesel Generator Set integrated with Smart Micro

Grid, Feeding Power to Industrial Consumers in

Neemrana Industrial Park


Neemrana Gas Engine Power Supply Project

Based on advanced Japanese technology in high heat efficiency.

Gas engine driven power station (Heat efficiency: 49%)

Reliable supply and maintenance on continuous basis

Tri-generation technology (to generate Electric power, Steam and Chilled water)

Expected Total efficiency :

81.1% （In the case of all

exhaust heat is collected with

chilled water)

Pilot project by Mitsui & Co., Ltd. , The Kansai Electric Power Co., Inc.ICAI WIRC Conference: Not for Advisory or Solicit Investments

Aerotropolis

Strategically located between Delhi and

Jaipur , south of Bhiwadi Master Plan

Area

Total Area: 24 Sq.km

Total Cost: Rs. 4000 crores

Components:

Passenger & Cargo traffic handling

Non aviation - Business Parks, Hotels,

Distribution centers etc.

Maintenance Repair Overhaul (MRO)

Site & Techno-Economic Feasibility

Study approved by State Govt

NOC received from Ministry of Defence

NOC awaited from Ministry of Civil

Aviation


Dadri -Noida – Ghaziabad Investment Region


Multi Modal Logistics Hub at Dadri


Greater Noida / Boraki Railway Station

Conceived as a World Class

Passenger Hub, integrated with ISBT

and Metro

Site:160 ha site to north and west of

Boraki


Mega Projects - Gas based Power Plants

Capacity: 1000-1200 MW each.

Sites:

1. Ville Bhagad, District

Raigad, Maharashtra

2. Chainpura, District Guna,

Madhya Pradesh

3. Indapur, District Pune,

Maharashtra

4. Vaghel, District Patan,

Gujarat

5. Rajpur-Shahpur, District

Mehsana, Gujarat


Mega Projects Dahej Desalination Project

Asia’s Largest Desalination Plant with the capacity of 336 MLD


DMIC – Status Report

General steps of operation

• Acquisition of land is done by the state governments

• SPVs incorporated to set up base infrastructure or trunk infrastructure such as water and

power connections, a drainage system, broadband network, roads and so on

• Feasibility studies has been done

• Few Pilot projects on the way

• Industries will be invited to invest in the area

Phase 1 – current status

Development of seven new industrial cities

Plans for all the cities have been finalized

Work on the Dholera and Shendra-Bidkin investment regions is likely to begin

Deadline is 2019


JAPAN INDIA

Time Bound Everything starts and

finishes as scheduled.

Everybody takes buffer

time.

Decision-Making Bottom up Top down

Business style

And Planning

Think

Think

Think………Action

Action

Action

Action……..Think

Naturals Resources Young Populations

Japan

India

CLEAR SIMPLE PROJECT

HELP JAPAN TRADE

USE JAPANESE TECHNOLOGY

USE INDIAN RESOURCES / MAN POWER

HONEST AND FAIR RETURNS

Advantages of DMIC

Double employment potential in five years

Triple industrial output in five years

Quadruple exports from the region in five years

Sector wise Employment Employment

Manufacturing/ Industrial Processing Area 2,000,000

Employment in agro/food processing and allied

infrastructure

200,000

IT/ITES/Biotech Hubs 600,000

Knowledge Cities 100,000

Logistics Infrastructure 100,000

Total 3,000,000


Opportunities across the value chain…1/2

PPP

• The policy and regulatory frameworks (concession agreements) are well established

• Substantial scale-up to create opportunities for various companies to venture as “Project Developers

Contractors/ Consultants

• Business Opportunities from implementing agencies who will sub contract construction

• Skilled manpower and sophisticated construction technology to be developed

• Mega projects like Delhi Metro, Highway, airports, ports projects have showcased business opportunities.

O&M Operators

• Emerging area of opportunity which has few players and capacity constraint.

• Going forward, the sectors will require equipments, systems and software


Opportunities across the value chain…2/2

Equipment

Suppliers

• Consistent demand of equipment due to mega infrastructure development across sectors

• Huge business potential for overseas players to enter the market

Rolling

Stock

Suppliers

• Increasing demand for various types of passenger & freight rolling stock

• Current domestic capacity caters half the demand and hence increasing imports

• Attractive opportunity exists for private players

Financing

• Various Financial Institutions and PE firms Japanese banks

• Attractive opportunity exists for FIs, PE firms, private investors


Disclaimer:

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Opinions and projections found in this presentation reflect our opinion as of the presentation date and are subject to change without notice.

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DMIC

Economy & Finance

Transcript of DMIC