___________

Economic Times reports that central government is mulling to share with states the export duty that it levies on export of iron ores. If this happens this will add to the revenue of mineral rich states like Orissa. Following are some excerpts of the above mentioned report.

The Centre may consider sharing a portion of the recently imposed export duty on iron ore with states. The move is aimed at providing additional revenues to mineral-rich states, where royalty rates have remained abysmally low. Resentment expressed by several states over the Centre’s decision to pocket the entire levy on the mineral may also have swayed the Union government.

This year’s Budget has imposed an export duty of Rs 50 per tonne on iron ore fines with less than 62% iron content and Rs 300 for the remaining ore. The Centre expects to collect over Rs 2,000 crore from this duty. Even if half of it is shared, mineral-rich states — including Jharkhand, Chhattisgarh, Orissa and Karnataka — could get over Rs 1,000 crore. This would be four times the Rs 250 crore that states receive annually as royalty on iron ore.

“Minerals belong to the states and there is no reason why the Centre should levy a duty and pocket all its benefits. The idea behind the duty was to create a deterrence for exports. The Centre should either pass on the entire collection from this duty to states or share a substantial portion with them,” a Planning Commission official said.

At earlier meetings on the subject of iron ore exports, a few states raised the issue of sharing the export duty and changing royalty rates on minerals from the present specific duty to ad valorem duty. In fact, the Hoda committee, which framed the new mineral policy, has also recommended that royalty should shift to ad valorem rates benchmarked against Western Austrian levies, which works out to about 7.5% of the per-tonne price of minerals.

The planned Bhubaneswar-Cuttack-Choudwar metroplex will have a ring road with NH-5 consisting one part of it with the other part to be constructed. The other part will start from south of Khurda and go through Haladia, Athagarh and Nergundi (a bit south of Tangi). A detailed map of this new road is here. Inside this proposed metroplex will be the Chadaka-Dampara sanctuary. Below I give maps of Bhubaneswar area and Mumbai area to show the relative size of the Chandaka-Dampara sanctuary and the Sanjay Gandhi National Park that is part of the Mumbai metroplex. Both maps have the same resolution. Recently, there is plan to popularize the Chandaka-Dampara sanctuary among the local people. Following is an excerpt from a report in the New Indian Express.

According to divisional forest officer (DFO) and wildlife warden Akshaya Kumar Pattnaik, there are plans to popularise the various spots of the sanctuary among the nature lovers as many in the Twin City are still not aware.

The nice bamboo hut and watch tower near Deras Dam with one and two suites available respectively overlook the channels and drainage system of the water source which provides lifeline to the Mendhasal agriculture farm.

The Kumar Khunti and Ambilo watch towers also have got accommodation facility.

“Plans are on to have small wooden restsheds to accommodate the nature lovers who will come on bicycle rides and can stay overnight as practised in in the West and some well managed reserves in several parts of the country,” Pattnaik reveals.

A visitor can also have the panoramic view of Mahanadi from Mantu Hill Top and enjoy the small fall near Godabhanga Tangara in the rainy season. The caves below the fall are home to hyaenas, he adds.

Apart from wildlife, the ancient forts at Bualigarh and Chudanga can be explored which have great archaeological value, the DFO says adding an interpretation centre is on cards with a fodder demonstration centre, small herbal garden, souvenir stall and snacks parlour at Godibari entrance of the sanctuary.

Though more than 10,000 visitors visit in a year, the DFO feels the number should go up considering the charm of the jungles, especially when one can enjoy the coastal sal range from Kochila Berena watch tower.

Mumbai

Several news reports mention that the Ministry of Tourism of India has been very impressed by the evolution of Raghurajpur village of Puri district as an arts village. There every house has become an art gallery. So impressed the ministry of tourism is with the village, it plans to replicate it in five other locations of the country. Following is an excerpt from Chennaionline.

What started as promotion of ‘pattachitra’ (painting on palm leaf) in Raghurajpur village in Puri district as part of rural tourism project five years ago culminated into transformation of the village into a vibrant centre of folk art.

In 2002, only about 6,000 tourists visited the place. In 2005, the tourist arrival figure went up to 34,000. The sale from the art and craft work went up from Rs 15 lakh to Rs 52 lakh during the same period.

Stone craft, pattachitra, palm leaf inscription, papier mache, sodhai work, mural painting, golden grass coir, screwpine leaf and wood work, filigree, applique, terra cotta and bell metal work greet visitors whose number is increasing every year.

“Every house in this village is an art gallery,” said a senior ministry official.

“The village has served us not just as a role model for generating employment through rural tourism but also as an inspiration for how to preserve folk art,” the official said.

Besides Raghurajpur, the other villages identified for setting up gurukul tradition of teaching art are Pochampalli in Nalgonda district in Andhra Pradesh, Hodka in Kachch district in Gujarat, Pranpur in Ashok Nagar district in Madhya Pradesh and Aranmula in Pathanamthitta district in Kerala.

I came across several leaflets and brochures in POSCO-INDIA’s Press room pages. Following is the brochure that highlights the NCAER study that I mentioned earlier.

Times of India reports that the newly floated MDLR airlines which just launched its Kolkata operations plans to fly Kolkata – Bhubaneswar in couple of months.

Business standard reports that POSCO is considering offering shares as part of its R & R. Following are some excerpts from that report.

Meanwhile, Posco is considering share allotment to landholders as an option for its Rs 52,000 crore project in Orissa. The company, which requires nearly 4,000 acres of land for a 12-million-tonne plant, says it will take a call on the issue by the end of this month.

“No doubt this is an option but we will decide after we know what people want,” a Posco spokesperson said. To understand land-holders’ demands, the company has asked Xavier Institute of Management, Bhubaneshwar, to carry out a socio-economic survey.

Of the 4,004 acres of land Posco requires, 3,566 acres is government land and 438 acres under private ownership.

The private land covers three gram panchayats of Gada Kujanga, Muagaon and Dhinkia. Dhinkia’s is the largest tract covering 200 acres. The area has a significant peasant population with communist affiliation.

The spokesperson added that any share issue would have to be over and above the compensation. “Otherwise, people will not like it,” he said.

Both Posco and Videocon will also offer one job per displaced family.

The Orissa rehabilitation and resettlement (R&R) policy has a provision for convertible preference shares to be issued to displaced people. The value of the shares could be up to 50 per cent of the one-time cash assistance.

Last week transportation of coal from Mahanadi Coalfields Limited came to a grinding halt and NALCO and NTPC Talcher that depend on that coal got into a critical situation. Following are excerpts from a Newkerala news report that mentions why MCL got into that situation.

Sources said the land losers of Zillinda, Kandhal and Solod affected by Ananta and Bhubaneswari mines stopped Ananata, Jagananath and Bhubaneswari open cast mines and close down the concerned project officers’ offices since yesterday demanding the promised job to the oustees by Mahanadi Coalfield Limited (MCL).

The villagers alleged that MCL authorities did not meet their commitments to provide 80 jobs to them till date forcing them to go for strike.

Similarly the land oustees of Kandhal marched to Lingaraj mine linked to NTPC-kaniha yesterday and stopped the output protesting the non-availability of employment to them as promised by Lingaraj authorities.

Coal transportation from Hngula and Balaram mines had been hit for the last four days due to the road blockade by Soloda villagers demanding jobs.

Angul Collector Girish S N said the authorities were monitoring the situation and senior officials dealing with land acquisition and rehabilitation had been rushed to troubled areas to negotiate with the agitating villagers.

Kalinga Times reported on a letter that CM Naveen Patnaik wrote to the PM on this issue. Following are some excerpts:

In a letter to Singh on Monday, the Chief Minister said that MCL should continue supplying coal to National Aluminium Company (NALCO) and National Thermal Power Corporation (NTPC) to help these industries continue uninterrupted power generation.

Blaming the MCL authorities for not extending the rehabilitation and resettlement benefits to the people affected by coal mining, Patnaik said the public sector undertaking should go as per the State’s R&R policy as the Centre was yet to adopt a new policy in this regard.

Extending R&R benefits to the families affected by the operations of MCL will go a long way in improving law and order situation in the region, Patnaik said.

In recent months there have been reports regarding how some R & R issues with respect to Hirakud dam oustees and SAIL Rourkela still remains unresolved after several decades. It seems that many public sector companies with their central government connections are arrogant and have not done R & R properly. As a result people do not trust R & R promises made by anyone (private or public companies) and as a result various projects that could help Orissa get out of the bottom, are getting inordinately delayed.

I came across a 1-page note someone from POSCO-India gave me when I was visiting Bhubaneswar in December 2006-Jan 2007. The 1-page note summarizes a study done by NCAER. The study has also been reported in News media such as Hindu Businessline. (POSCO-India in its web page has additional links.) We will give some excerpts from the Hindu Businessline report.

The 1-page note: POSCO-India’s rs 52,810 Cr investment by 2016 will stimulate Orissa Economy.

• Economic Benefit:
  • Generate Rs 29,760 crores additional annual gross output for Orissa including Rs 12,610 Crore of POSCO-India’s direct gross output.
  • Create excess annual value addition of Rs. 12,100 crores for Orissa which equals 19% of Orissa’s state GDP in 2005-06 (equals 11.5% in 2016-17)
• Employment:
  • Job creation of 870,000 man years, absorbs 88% of state unemployment backlog (i.e., decrease in backlog of employment from 9.9 lakhs in 2005-06 to 1.2 lakhs).
  • 18,000 man years of direct employment in POSCO-India.
• Tax Contribution:
  • POSCO-India annual tax contribution (Rs 2,620 Crores) would be appx. 17.6% of total tax revenue of Govt. of Orissa in 2016-17.
  • POSCO-India SEZ would contribute Rs 174,970 crore tax revenue in next 35 years.
    • Rs 77,870 crores would be to Govt. of Orissa and Rs 97,100 crores to Govt. of India.
    • The differences of tax between SEZ and DTA status is less than 8% for Govt. of Orissa and 5% for Govt. of India.
• Comparison with current Orissa Economy:
  • Orissa in 2003-04:
    • Gross Output: 111,378 crores
    • State GDP: 53,830 crores
    • Employment: 143 lakhs (2001 census)
    • Tax: 8170 crores (2005-06)
  • POSCO-India’s impact:
    • Gross Output: 29,760 crores
    • State GDP: 12,100 crores
    • Employment: 8.7 lakhs
    • Tax: 2620 crores

We now give some excerpts from the Hindu Business line article of January 2007 which partly explains how some of the above numbers were calculated. That article was written by R. Venkatesan who works for NCAER, but the article was his personal view.

The NCAER study broadly used the ADB/World Bank methodology on the social cost-benefit with minor adjustments for the local parameters. Econometric models were used to project border prices for the useful life of the project. The project’s impact from the State economy perspective — in terms of the impact on the State GDP (output multiplier effects) and employment opportunities created within the State (employment multiplier effects) was also assessed.

The output multiplier for iron ore was found to be 1.4 compared to 2.36 for steel. In other words, every Rs 1 lakh worth of output in the iron ore sector would result in Rs 1.4 lakh of output (including the Rs 1 lakh output of iron ore) compared to Rs 2.36 lakh for every Rs 1 lakh output of steel. The employment multipliers for iron ore and steel work out to 0.35 and 0.69 man-years respectively. Therefore, in terms of both output and employment, steel has a larger impact.

These multipliers imply that the Posco project would create an additional employment of 50,000 person years annually for the next 30 years vis-à-vis 870,000 person years in the steel project alternative. In terms of value addition, the iron ore and steel project alternatives would contribute 1.3 per cent and 11.5 per cent to Orissa’s State Gross Domestic Product (or SGDP) by 2016-17 respectively.

An important part of the study was the Least Cost Analysis of technology options in the steel-making, the Finex process that Posco purports to bring and the traditional blast-furnace technology. The Average Incremental Economic Cost was used as the yardstick; this was followed by computing the economic IRR (internal rate of return)
to examine whether the project was economically worthwhile from the national economy point of view.

The EIRR for the Orissa project works out to 16.6 per cent for base case and even in the worst case scenario, the EIRR at 13.9 per cent would remain above the hurdle rate of 12 per cent. The economic impact of the project was estimated at $2.5 billion at the test discount rate of 12 per cent.

The significant feature of the study was the estimation of depletion premium or the opportunity cost for depleteable and non-renewable resource iron ore for reasons cited below:

India’s high-grade ore (+ 65 per cent Fe content — Haematite) reserves, proven and probable, amount to only 0.58 billion tonnes. And even if we were to factor in indicative and inferred reserves (probable/feasible), the total reserves (proven and possibly future potential) would be only 0.92 billion tonnes.

India’s medium-grade ore (+62 per cent Fe to 65 per cent Fe — Haematite) reserves, proven and probable, is only 1.3 billion tonnes. Here too, if we factor in indicative and inferred (probable/feasible and pre-feasibility estimated) reserves, the total reserves (proven and possibly future potential) will be only 2.8 billion tonnes.

Policy Implications

Orissa stands to gain significantly if instead of exporting iron ore it processes it to steel within the State, in terms of both employment generation (17 times), and GDP impact (9 times).

India’s high and medium grade iron ore reserves may not last more than 19 years even if exports of these grades are frozen at the current level or if the targets set out in the draft steel policy are to be met. The economic analysis considered the depletion premium for high and medium grade iron ore. This is the opportunity cost to the national economy of using the depletable resource, which is the average incremental cost of depletion premiums computed year-wise.

Any exporter of iron ore of medium and high grades from the State needs to pay a depletion premium of $27 per tonne. Even this would be a sub-optimal policy from the State’s viewpoint if it can process the medium and high grade ore to steel. No such depletion premium has been applied for coking coal as its price did not exhibit any
trend before the recent steep price hike.

For the eastern States seeking to raise the mineral sector’s share in their GDP, it may be a good idea to set up processing facilities. It would not be advisable to allocate iron ore mines through open bids or accept increased royalty payments, even accounting for the depletion premium, compared to the option of processing iron ore to steel. Future cost-competitiveness and logistical advantage imply that iron ore-rich States can compete with existing over-capacities in the US, Europe and Japan even after factoring in the capital charges for new investments.

Export of iron ore needs to be restricted to grades other than medium and high-grade ore categories; for instance, export of beneficiated ore from Goa using inland waterways logistics advantages could be encouraged. Allowing exports of high grade ore would facilitate export of steel from existing over-capacities in the US, Europe and Japan to East Asia at the expense of future steel exports from new Indian steel capacities which are likely to enjoy cost-competitiveness over existing over-capacities elsewhere.

I am not qualified to judge the above analysis. I would appreciate any comments, analysis, criticisms etc. on the above.

Pioneer reports that the Orissa government has decided to build a 4 lane road from Jajpur Road to Duburi in the Kalinganagar area. Following are excerpts from the Pioneer report.

The Government will construct a four-lane road connecting Chorada Square of Jajpur Road with Dubri in Kalinga Nagar as an alternative to National Highway-200, following the increase in vehicular traffic and resulting congestion on the NH-200 connecting Duburi and Chandikhole in Jajpur district. …

A sum of Rs 43 crore has been provisioned by the Government in the Budget, while the remaining amount of Rs 47 crore of the total of Rs 90 crore required for the project will be sourced from the owners of mines and industries.

Giving the details, the Finance Minister said the 15-km-long road would connect NH-200 with NH-215 and Rs 13 crore would be spent for acquiring the land required. The work on the project would commence soon, with the target of completion of land acquisition being set for September 15, he added. …

According to the plan, half of the road, i.e. 7.5 km, would be completed in the first phase and the Public Works Department (PWD) has been asked to call for tenders.

The tender notice will be published within a fortnight. The entire project will be completed by 2008.

Today’s Business Standard reports that all future MOUs signed by the Orissa government will have more conditions related to value addition, employment infrastructure and ancillary development. Following are some excerpts from that article.

The Orissa government has decided to incorporate new conditions in all MoUs to be signed henceforth with investors proposing to set up projects in the state, to compel them deliver more on value addition, employment, infrastructure and ancillary development front.

At a meeting today, L&T officials made a presentation regarding plans on investment in Orissa and the benefits to flow to the state. According to sources, the company has agreed to upgrade the existing plant of L&T plant located at Kanspal near Rourkela in Sundergarh districts where high end engineering products will be manufactured.
Similarly, it has been asked to set up a technical institution closer to the refinery site and develop a greenfield plant. The company will also be involved in the infrastructure development.

For this, the company has been asked to participate in the Special Purpose Vehicle (SPV) for Therubali-Gunupur Rail Link. Further, in order to promote employment in the state the company will be asked to develop downstream industries, he added. It may be noted, the details of the MOU conditions will be worked out within next 2-3
days before formal signing of the MOU.
…
This changed attitude of the government to extract certain commitments from the industry in MoUs to safeguard the state’s interest is likely to be reflected in the signing of the Memorandum of Understanding (MOU) for the L&T-Dubal project, a joint venture between L & T of India and Dubal Aluminium of Dubai.

This is a good first step; especially the part regarding establishment of “technical institute.” However, it is not clear what kind of technical institute is referred to: an ITI, a polytechnic, or a degree engineering college. The government should insist on all three. As a reference point Jharkhand has convinced Central Coalfields to set up an engineering college in Jharkhand, and Bokaro Steel Plant to set up an engineering college and a medical college in Jharkhand.

Orissa must follow Jharkhand’s example. It should not only require a medical college and an engineering institution (with degree college, polytechnic and many ITIs as part of it) from the new companies but also require it from existing companies; both public and private ones. The existing companies which do not agree to this should be blacklisted and not given any preferred treatment for various things such as permissions, renewals, expansions etc. To discourage them from delaying, an escalation formula should be worked out so that the more the company delays the more it has to put in later.

The following information regarding R & R offered by TATA steel at Kalinganagar is from a Tata Steel brochure that they give me. If there is any inaccuracy in it or if similar packages are not being offered by Tata Steel to others in Kalinganagar please let me know.

[Context: After I had written an open letter regarding how Tata Steel is exploiting Orissa and yet referring to it as marriage between Tata Steel and Orissa, they got in touch with me in December 2006 when I was visiting Bhubaneswar. Although I am still unhappy with Tatas overall (as they have not done much on the issues I mentioned in the open letter), I personally think the following is a decent package and I hope other steel and aluminum companies such as POSCO, Mittal etc. use this R & R as a starting point.]

The R & R parameters used by Tata Steel:

1. Famiy definition: All major sons as on 1st January 2005 to be considered as separate famiy for R & R benefits.
2. Plot in the Rehab colony: One homestead plot per expanded family. Each original family would get about 3 to 7 plots.
3. House building assistance: Rs 1.5 lakhs per expanded family (as per the new definition). Each original family would get about Rs 4.5 to 10.5 lakhs
4. Temporary accommodation: Rs 0.1 lakhs per expanded family. In addition, providing immediate shelter during construction of their houses at a cost of about Rs 10 crores.
5. Transportation assistance: Free transportation of all househod materials, cattle etc.
6. Employment: One nominated member from each expanded family. i.e., providing more than 1200 jobs for 679 original families. Cash-in-lieu (rs. 2 lakhs per family) for the older people upon their choice. Engagement provided during the construction itself.

An example scenario: Family of late Sukura Soren. Hamlet: San Chandia. Mouza: Chandia.

1. Family Tree: Late Sukura Soren owned 2.79 acres of land including house site. He had three sons: Late Abhiram Soren, Madhu Soren (71) and Sinu Soren (60) . Abhiram Soren is survived by wife Tulasi Soren (56) and four sons Mansingh Soren (33), Mataram Soren (30), Manika Soren (25), Rajen Soren (43). Son of Rajen Soren is Ghana Soren (19).
2. Number of expanded families = 8.
3. Compenstation for two houses: Rs 0.74 lakhs
4. Land Compensation: Rs 2.79 lakhs
5. 8 numbers of 1/10th acre plot in the rehab colony worth – Rs 4.0 lakhs
6. Total house building assistance – Rs 12.0 lakhs
7. Temporary accommodation assistance – 0.80 lakhs
8. Transport allowance – Rs 0.16 lakhs
9. Maintenance allowance – Rs 1.92 lakhs
10. Cash in lieu of employment for 3 persons – Rs 6.0 lakhs
11. Total employment – 5
12. Total Cash benefits – Rs 28.41 lakhs

New Indian Express reports Vasant Scribes coming to Bhubaneswar to provide training and employment opportunities. Following are excerpts from that report.

Leading medical transcription company in India, Vasant Scribes is set to provide training to the unemployed youth of the State to join the field even as it has commenced commercial operations from its Bhubaneswar facility at STPI here.
The company which, at present, has 35 medical transcriptionists intends to expand the facility to over 300 within one and half years. And the bulk of the staffers would be the youths who successfully complete the training.

… The company has applied for one acre of land in the Infocity and has submitted the building plans and layout to the Government.

… But in a stark departure from prevailing practices, the training would not only be imparted free of cost but the trainees would also be given a handsome stipend.
Eligibility would be Plus II pass, preferably with a science background.

… Headquartered at Hyderabad, the company employs over 500 personnel in the city.

The Pioneer reported,

“Another Alumina plant is in the offing. L&T and Dubai-based Dubal Company will set up an Alumina plant at a cost of Rs 20,000 crore at Kushumshila in Rayagada.

Representatives of both the companies met the Chief Secretary Ajit Tripathy on Monday and held a detailed discussion. at the State Secretariat.”

Financial Express has more details on the proposed alumina plant.

Often many well-meaning people read about a particular R & R package for one location in one state and then compare it with R & R package and/or land prices offered in another state, in our case Orissa, and start making wild allegations that the Orissa government is incompetent in getting a good deal for its people or the company or foundation that wants to set up something is evil etc. etc. To make the obvious point, obvious to anyone who thinks rather than is driven by his/her preconceived ideology, that land prices vary across different locations in India, following are some data points.

(i) Hindu and Pioneer report about the Brahmani steel plant coming up in Jammalamadugu in Andhra Pradesh. There the Andhra Pradesh government has procured land at Rs 18,500 per acre for the steel plant which will need 10,640 acres. The government has also promised allotment of 3000-4000 acres for an airport at the price of Rs 9,000 per acre. The exact quotes from Pioneer are as follows.

The plant, to come up on an area of 10,640 acres, will be the second biggest plant after the Visakhapatnam steel plant making Andhra Pradesh the biggest steel producing State in the country. …

The Chief Minister denied any favouritism in providing land to the project and said that prices higher than market price was paid for the land. “The land has been purchased at the rate of Rs 18,500 per acre which is the highest in the district,” he said.

The quote from Hindu is as follows:

Announcing that BIL Managing Director Janardhana Reddy, an MLC in Karnataka, had agreed to construct a commercial airport nearby, he promised allotment of 3,000 to 4,000 acres of land at Rs. 9,000 per acre, half the price charged for land given to the steel plant.

(ii) On the other end of the spectrum following is an excerpt from Moneycontrol on land prices and compensation offered for land in Dankuni near Kolkata.

Construction giant DLF has offered to pay a whopping 55 lakh rupees an acre for acquiring close to 5,000 acres near Kolkata.

Never before has any company paid so much. Even the government paid up to 14 lakh rupees an acre in Singur, which is 20 kilometers away. DLF proposes to build an integrated township and a 100-acre SEZ. And the rehabilitation package it has promised, is awesome – guaranteed employment, alternative housing, education and even healthcare facilities for displaced farmers.

So what is our point? and Why is it relevant to Orissa’s growth and infrastructure development?

There are several land acquisitions going on in Orissa with respect to industries (POSCO, Tatas etc.), for Vedanta University, for various rail and road projects, etc. So when you come across a price or compensation package in another state and it does not gel with some other packages in Orissa that you have read about, please investigate more before getting all riled up and accusing the Orissa govt., its ministers, its bureaucrats, or the companies. They may as well be at fault, but please do research before deciding on it and shooting off emails or postings, as the above data points make it clear that land prices vary quite a lot among different locations in India.

Another point we want to make is that, Orissa has to balance between getting the best deal for its people (beyond the market price) and losing the project to another state. Again, the data point shows that there are other states who can offer very cheap land price and if Orissa asks too much (beyond the market price) then there is a real risk of losing the project. In case of steel and aluminium project, losing the project and consequently delaying in allotting certain mines may also mean that the mines may be allocated by the central govt to out of state companies. As a result Orissa will lose out on the value addition and on the infrastructure (such as roads, railway links, ports, townships, etc.) that are associated with large steel and aluminum plants.

A suggested approach to get the best deal for people (beyond the market price) losing their land is to have a central R & R policy that every state must follow, so that they don’t compete on the basis of who can offer the cheapest (relative to the market price of that particular location) land price and R & R. This can also be achieved if the relevant states (Orissa, Chhatisgrah, Jharkhand, etc.) agree on a common policy. (Sandip Dasverma, a friend, has often mentioned the later.)

[Acknowledgments: Deba Nayak of ornet for pointing to the Pioneer article in ornet. Participants of Orissa Today google group for engaging in multiple debates on this issue.]

Business Standard in an article in April listed several infrastructure related projects that Orissa is planning using PPP. Following are excerpts from that article.

… the Orissa government has lined up 18 new projects in the Public Private Partnership (PPP) mode entailing an investment of over Rs 6000 crore.

Of the 18 projects, 12, mostly large and medium, have already been consolidated with investments of Rs 3500 crore.

Another six projects, fairly bigger in respect to the previous ones, are under active consideration and would cover an investment of around Rs 2500 crore, according to government sources.

Source said, till date, an around Rs 5300 crore investments have already been lined up and are under implementation in the PPP module in 12 odd projects across the state.

In all the Orissa government plans to develop 30 odd projects in different sectors in the PPP module over the next two years covering an investment of over Rs 11,300 crore. …

The PPP modules currently under implementation and those under consideration cover a wide range of activities starting from port cuilding, railway line construction, road development and erection of urban clusters. …

The new projects being considered under the PPP module included development of road links in the Capital Region Ring Road, the Bhubaneswar-Paradip Road, the Suakati-Dubuna Road and the Tensa-Barsuan-Lahunipada Road.

These would entail a primary investment of Rs 1547 crore for the development of 279 kilometres of road, including a four-laning of the first one.

Other than this there would World Bank identified projects where four laning would be done of the Sambalpur-Rourkela road from the existing two-lane road.

The long pending Joda-Bamebari Road and Koira-Rajamunda Road covering 229 kilometres would also be taken up.

The PPP module would be used for two vital rail links. The first was the Angul-Duburi-Sukinda rail link and the second the Gunupur-Theruvali link. In both cases, the Special Purpose Vehicle ( SPV) route was being proposed. The investment for the rail links was estimated to be in the region of Rs 570 crore. The Angul-Sukinda rail link would be of 90 kilometres and the Gunupur-Theruvali link would be 79 kilometres.

PPP’s for setting up Bio-tech parks, SEZ for IT/ITES companies and integrated commercial and residential complex, an enclave at Shahidnagar are were also part of the city building endeavour of the Orissa government.

This apart, a commercial shopping complex and an A.C.Market complex at Unit IV are also being contemplated in the PPP mode as part of city development plan.

Till date, investment for the SEZ for IT/ITES companies had been identified and were estimated to be in the region of Rs 35.67 crore. As for the other residential and commercial complexes, project details and cost were being worked out on a war footing.

Coupled with these, a multi-product SEZ at Paradeep had been suggested by the government for development using the PPP route. It was expected to entail an investment of Rs 712 crore.

Land of around 1093 hectares would be needed for the SEZ in the Marshagahi Tehsil of Kendrapara under Paradeep.

This article is probably based on a presentation available from the Orissa govt. website. That file seems to be corrupt but its google cache shows part of the information.

Reader Martand Deo suggests that there should be attempt to build the Khurda-Balangir line through PPP similar to the way the Hasan- Mangalore Rail Line is being built. His points are:

1. With the active initiative of Karnatak State Governament Hassan Mangalore Rail Development Company Limited (HSMDC) is formulated, along with this New Mangalore Port and Mineral Enterprise Limited, K-RIDE joins the hand to move this project forward, with the stake as follows

a. Government of Karnataka 40%
b. Ministry of Railways 40%
c New Mangalore Port Trust 9%
d. Mineral Enterprises Limited 9%
e. K-RIDE 2%

2. To have a better representation and smoother functionality HRMDC comes up with one Chief Executive Officer and assisted by Professional Board of directors from Government of Karnataka, Ministry of Railways, participant companies and other users of that
region .

3. This Rail Line also have greater challenges, which crosses Western Ghats passes through 55 kms of ghat section, on construction activities, train operations and maintenance of the
line, but a greater will power of karanatak finally made it.

4. Govt. Of Orissa is spending a lot in the name of KBK development, if it Could allocate some fund for this rail line, the development can be much more than the current trend, As the recent World Bank Survey says if one rupee is invested in terms of road, Rail infrastructure development, poverty elimination can be done 7 times better than others.

5. For details how Hasan- Mangalore rail line project is implemented, the following web Site can be visited. http://www.hmrdc.com/

I do not know about Karnataka, but the government of Orissa is involved in several Railway line construction through PPP. The two that are approved and underway are Haridaspur-Paradip and Angul-Sukinda. Then in their priority would be Gunupur-Theruvali (for shorter access to Gopalpur port), Bhadrakh-Dhamara (being built by DPCL), Gopalpur port connectivity and Vedanta University connectivity; followed by any other port connectivity for any other port that gets built such as Kirtania, Astarnga etc. Regardless, some way has to be figured out to get Khurda-Balangir connectivity done as soon as possible. A Business standard article in April lists some of the PPP driven plans of Orissa government.

Economic Times reports that Pentasoft plans a multiplex in Bhubaneswar and other cities. Following is an excerpt from that report.

As part of its expansion plans, the company has chosen Coimbatore, Hyderabad, Bhubaneswar and Mysore for the projects, which would have resorts, theme parks, children games and go-carting, Pentasoft CEO Hariharan told reporters here.

The multiplexes would be ‘replicas’ of the one in Chennai, ‘Mayajal’, he said.

A review of Mayajal in Chennai is at this site.

New Indian express reported that the vision document for twin cities has been completed.

The Vision for the planning area perceived around the following core ideas:

1. Cuttack and Bhubaneswar as twin cities in COMPLEMENTARY role.
2. Transformation of the Bhubaneswar – Cuttack Urban Complex to a world class urban centre as an important gate way for national and international investments.
3. Promotion of cultural, built and natural heritage in a sustainable manner.

I will update the roadmap in the next post..

Deepikaglobal reports that Hilton plans to open a Hilton Hotel and a Homewood Suites in Bhubaneswar. Bhubaneswar already has a Trident Hilton. Following is an excerpt from that report.

Speaking to mediapersons here today, DLF Home Developers Ltd Chief Financial Officer Surojit (Babu) Basak said, ”We plan to open two hotels under Hilton brands–Hilton Garden Inn, amid market segment hotel, and Homewood Suites, which are service apartments, entailing an investment of around Rs 500 crore. The hotels would have 600 rooms altogether. … The hotels would be operational in three years, he added.

The US-based Hilton Hotels is looking at ten-fold increase in the number of hotel property in India. Hilton Hotels would also open hotels in Delhi, Mysore, Bhubaneswar, Bangalore, Hyderabad, Goa and Kolkata. Homewood Suites, the longstay brand in Hilton’s portfolio, would debut at Kolkata, Bhubaneswar and Hyderabad.

A 3 week old Business standard article talks about the mall, multiplex and real estate scenario of Bhubaneswar. Following are some excerpts from that article.

Abhijit Das, regional director at property consultants Trammell Crow Meghraj, informs that there are 4-5 malls being planned in the city, most of them in the newly developing Chandrashekharpur area. ….

Looking at the maturing consumer, Saraf is planning a 5,00,000 sq ft mall on 5.5 acres of land which in all probability will include the city’s first multiplex, a large plaza and a 100-room, three-star hotel on top. …

Another retail mall project, also on the larger side, is the 6,00,000 sq ft Junction Mall from Bengal Shrachi Housing Development (another Kolkata-based company), coming up in the Jaidev Vihar area en route to Infosys City.

The company’s MD, Rahul Todi, says this will be the city’s first organised retail destination. Set to cost around Rs 120 crore, it will launch later this year (October-November). South Africa’s Bentel will be the architects on this project, and it will boast of a two-level car parking in the basement. …

There is quite a bit of short supply in the quality residential segment in Bhubaneswar, according to Anup Mohapatra, president, Real Estate Developers Association (REDA).

He points out that over the last two years, rates in the city have increased at least four-fold. There is demand for high-end residential property in the city, most of which is coming up towards the new IT developments taking place near Chandrashekharpur. If, for instance, the demand today is for 100 homes, the supply is lagging far behind at only 10-12 at the moment, he says.

For some Kolkata-based companies, Bhubaneswar is almost like an extension of their home ground and makes an attractive investment alternative. No wonder that apart from just malls, Todi is also planning to launch a high-rise, high-end residential project with 550-600 apartments spread over 14 acres. Situated on the Cuttack-Bhubaneswar National Highway, Neo City will have a club, swimming pool, and other lifestyle amenities.

The Sureka Group, which bought a 10-acre plot in Bhubaneswar recently, is also looking at a high-end residential development. Its MD, Pradeep Surekha, informs that the company is trying to procure more land at the same place.

We are looking at a total of 20 acres for the Rs 400 crore residential project, he confirms. He is also eyeing the growing organised retail demand in the city. The Surekha Group is planning a 5,00,000-6,00,000 sq ft mall but if it gets suitable land at the right place (at least 10 acres), a mall might be developed on 1 million sq ft space. Such is the scope for retail in the city, he explains.

NDTV reports discovery of gas and oil in the Mahanadi river basin. Following is an excerpt from that report.

Oil and Natural Gas Corporation (ONGC) has made five oil and gas finds in eastern offshore and north-east, the most significant being a gas discovery in the Mahanadi basin block where 3-4 Trillion cubic feet of gas reserves have already been established.

“ONGC made second discovery in Mahanadi basin in MN-DWN-98/3 block in east coast of India about 60-km off Paradeep coast in Orissa,” the company said.

The well MDW-4A at a water depth of 1,087 meters produced gas with a high flow potential from a depth of 1,800 meters. The state-run firm has 100 per cent interest in the block it won in first round of New Exploration Licensing Policy.

The company has so far drilled five wells in Mahanadi Basin and made the first discovery in 2006. It, however, did not say the reserve potential in the new discovery.

“This is again a new discovery and potential of the field is being assessed. The flow rate of oil is highest among the discoveries in North-East. Oil is of very good quality sweet crude with API gravity of 33 and pour point 300 degree Celcius,” it said.

Anubhuti Bishnoi in Indian Express reports on the progress towards making a 2-lane Ranchi-Vijaywada highway zig-zagging through 1219 kms of Orissa and passing though most of its tribal districts, many of which are naxalite infested. The article has a nice map showing which towns the road will pass through in Orissa. Following are some excerpts from that article. (Thanks to Manoj Sahu in Africa for mentioning this article in Agami Orissa.)

At a recent meeting chaired by Prime Minister Manmohan Singh, the Ministry of Shipping, Road Transport and Highways was asked to expedite finalisation of the Detailed Project Report (DPR) for the Vijayawada-Ranchi corridor cutting through Orissa, and take it up on a priority basis. … Around 1,219 km of the 1,729-km corridor planned between Vijayawada and Ranchi will fall in Orissa, and the state government had requested that its state highways, district and rural roads be incorporated in the corridor. Now 235.8 km of national highway sections, 878 km of state high ways and 104.5 km of rural roads will be a part of the corridor. The road from Vijayawada enters Orissa at Motu in Malkangiri district and leaves at Tiring in Mayurbhanj district on the north. … While the Ministry may not call the stretch NH as yet, with the Prime Minister taking a keen interest, it is set to be developed as per national highway standards. What that means is that tribal areas of Koraput, Malkangiri, Rayagada, Gajapati, Ganjam, Kandhamal, Anugul, Sambalpur, Deograh, Keonjhar, Mayurbhanj and Boudh, currently insurgency hotbeds, may emerge out of the hinterlands. Confirming that the project had been put on the fast track, a senior Ministry of Shipping, Road Transport and Highways official said: “The DPR of the corridor is underway and should be ready in six-seven months.”

Note: As mentioned by Digambara a map of the route is at http://tathya.in/story.asp?sno=592. I removed the faulty map that Indian Express printed.

Many may not know that to the west of Bhubaneswar lies the Chandaka widlife sanctuary with varieties of flora and fauna. This sanctuary is considered as the lungs of Bhubaneswar. Today’s New Indian Express has an article about this. Following are some excerpts.

The sanctuary is perhaps among the few in the country which boasts of a treasure trove of flora and fauna excepting the royal Bengal tiger. The coastal range of sal forests also end here with an intimate mix of evergreen and deciduous elements.

According to divisional forest officer (DFO) Akshaya Kumar Pattanaik, though elephant is the flagship species, two types of monkeys, three deer species and three other herbivores, nine types of carnivores including the panther, two types of civets, tree shrew and pangolins are spotted.

Also the sanctuary is home to 21 types of snakes, 16 lizards, one species of turtle and marsh crocodile. The avian types include 174 with 10 species of water fowl and waders, seven ground nesters, seven raptors and 17 song birds.

The elephant population (65 in 2006 census) is seen in group sizes of 18, 13, 8, 7, 5 and 4. Even joining of three or four family groups were also observed aggregating to a herd size of 38 at Bharatpur in the past.

Orissa tourism has a nice page on Chandaka. Following is a map of Chandaka from that site.