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Madhya Pradesh: Means Business

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Title: Madhya Pradesh: Means Business


1
Madhya Pradesh Means Business
Roads
2
Overview
Overview
Madhya Pradesh (MP) State that means business
  • MP is the second largest State in the Country
    stretching over 308,000 sq kms.
  • The State is blessed with large mineral resources
    of coal, diamond, limestone, methane etc.
  • MP is among the top 4 states of the Country for
    industrial investments.

Economic Snapshot
Madhya Pradesh is emerging as a key growth center
for the Country
  • Per capita GSDP USD 369
  • Manufacturing sector USD 8.5 bn
  • (Registered Unregistered)
  • Gross state domestic product (GSDP) USD
    23,983.63 Mn
  • Average growth rate 5.5 per annum

Advantage MP
Madhya Pradesh has one of the upcoming industrial
base in India
  • The State is centrally located
  • Investor friendly Government policies
  • Total electricity generation capacity
    6,449.25 MW
  • Indias first greenfield SEZ
    Indore SEZ
  • Industrial Centers 8

Power
Electricity generation capacity at present is
6,449.25 MW and estimated to rise to a surplus in
2008-09
  • MP is rich in low grade coal suitable for power
    generation.
  • Potential of hydro-energy generation.
  • Installed power capacity (MPs share)
  • Hydel Power Generation 852.7 MW
  • Thermal Power Generation 2,147.5 MW

Ministry of Power (powermin.nic.in)
Source Indiastat.com (as on 23 Feb 2006)
3
Enabling Infrastructure
  • The State is well connected with the rest of
    India with almost 425 trains passing through the
    State on a daily basis. Of these 175 trains pass
    through the State capital Bhopal alone.

MP IS CENTRALLY LOCATED AND WELL CONNECTED WITH
ALL MAJOR CITIES IN INDIA
RAILWAY NETWORK
  • 25 airstrips.
  • Convenient air links from key Indian cities like
    Delhi Mumbai to Bhopal, Jabalpur, Gwalior,
    Indore and Khajuraho.
  • 5 operational airports.
  • Indore airport has the capability of handling
    international cargo.
  • An international airport proposed in Bhopal.

GWALIOR
KHAJURAHO
AIRPORTS
INDORE
BHOPAL
JABALPUR
  • The total length of roads spanning MP is 67,600
    kms.
  • National highways of 5,200 kms run through the
    State.
  • 18 National highways including trunk routes of
    Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore,
    Delhi- Hyderabad.
  • The total length of State highways in the State
    is 9,885 kms.
  • Convenient linkages to western ports i.e. Kandla
    Port, Jawahar Nehru Port Trust.

ROAD NETWORK
Source Department of Road Transport Shipping
(morth.nic.in)
Source www.destinationmadhyapradesh.com
4
Madhya Pradesh A Preferred Investment Destination
31 of the State under forest cover with a
largely unexploited species of rare, valuable
medicinal- herbal plants
Over 2,000 kms of roads being developed with
Private Partnership (BOT)
Offers diverse tourists destinations catering to
various segments of tourism such as religious
(Bhojpur), eco/ adventure (Panchmari), heritage
(Sanchi, Khajuraho) tourism etc.
Indias 1st operational Greenfield SEZ at Indore
Third largest producer of cement in India
Over 100 agricultural farms with an area of over
20,000 acres is available on lease to investor
Favourable climatic conditions for cotton and
over 40,000 power-looms are driving the textile
industry
Various blocks available for power, cement, iron
and steel units
Largest producer of pulses and oilseeds in the
Country (75 of soyabean production)
Over 18,000 technical graduates and 230,000
graduates add to workforce each year
12 blocks with reserves totalling 2,585 million
tons of coal has been identified
Over 144 BCM of coal bed methane reserves
available
Availability of coal and natural gas (G.A.I.L
pipeline) along with support from Government to
make investment in Thermal Power Plants lucrative
Source www.mpsidc.org Brochure MP Means
Business
5
MP The Right Place with the Right Environment
Savings in Office Space Rates (A comparison of
rates in Central Business Districts)
DESTINATION MADHYA PRADESH
Fastest mover in overall performance among the
big States in the Country.
Fastest mover in agriculture
Fastest mover in infrastructure development.
Bhopal and Indore have substantial cost
advantages, even when compared to other Tier III
and IV cities.
Savings in Land Cost
Ranks 2nd in terms of governance.
(Estimated Values for Multi-product SEZs)
Ranks 3rd in terms of law order
Cost of skilled labour is USD 2.4/day vis-a-vis
USD 3.5 USD 4.0/day in metros
The cost of land is one of the lowest in the
Country. Even central hubs such as Indore and
Bhopal fare well against other cities in terms of
low land cost.
MP is centrally located. The State is at an easy
distance from all the key consumer markets in the
Country.
Fastest mover is the State where the rate of
improvement between 2003 2006 was greater than
that between 1991 2003
Source (Reference RK Swamy)
- Distances rounded off
Source India Today (September 06 Issue)
6
Industrial Policy Catalyst for the Investments
  • The Government of MP has devised an investor
    friendly industrial policy, which is aimed at
    achieving global competitiveness. The policy
    emphasizes on industrial growth in the state
    through adopting cluster approach, establishing
    specialized infrastructure and offering
    favourable incentives.
  • The main thrust of this policy is
  • Establishment of a Madhya Pradesh Trade and
    Investment Facilitation Corporation which would
    take decisions about rationalization of taxes,
    facilities of mega projects and other related
    matters.
  • Enacting an Industrial Facilitation Act and to
    change the rules of business with a view to make
    single window system decisive and result
    oriented.
  • Developing infrastructure for supporting the
    identified industrial clusters
  • Reviving closed down/ sick industrial units by
    granting special packages.
  • Attractive incentive schemes.

SPECIAL INCENTIVES
  • Special package for Mega Projects on project
    basis by apex level investment promotion
    empowered committee headed by the Chief Minister.
  • Industrial investment promotion assistance 50
    to 75 of commercial tax for 3-10 years
  • Concessional registration charges and stamp duty
    exemption for Term Loans.
  • Interest subsidy on term loan for 5 years _at_ 3
    to 5.
  • For thrust sector industries, 25 capital subsidy
    would be provided limiting up to a maximum of USD
    56,000
  • Land on 75 concessive rate for Mega Projects
    limited to USD 4.4 million.
  • Entry tax exemption for 5 years.
  • 5 years electricity duty exemption on captive
    power generation
  • 15 capital subsidy to SSI up to USD 33,000 in
    backward areas
  • Infrastructure grant up to USD 0.22 million crore
    for developing private sector industrial parks
  • Partial reimbursement for Project report, ISO
    Certification, Patent and Technology Purchase cost
  • CLUSTER APPROACH
  • Indore Pharmaceutical, Textile, Food
    Processing, IT, Auto Components
  • Bhopal Engineering, Biotechnology, Herbal, IT,
    Food Processing
  • Jabalpur Garment, Mineral, Forest Herbal,
    Food Processing
  • Gwalior Electronics, IT, FMCG, Engineering,
    Food Processing
  • Rewa Refractories, Lime Stone, Forest Based
  • Sagar Mineral Processing

SPECIALIZED INFRASTRUCTURE
7
Doing Business Made Easy Through MPAKVN
In a bid to build a competitive environment
industries and their ancillaries would be
promoted in clusters based on the availability of
raw materials, skilled labour and market
potential. Under this Industrial Policy through
Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd
(MPAKVNs) scheme, the State Government, has
identified industrial clusters. Many of the
industrial giants have their establishments in
these areas, however 44 of developed area is
still untapped and open for investment.
Area Developed 2,262 Hectares Allotted 800
Hectares Units established 326 Major Groups JK,
Surya Roshini, Godrej, Grasim, Cadbury, Hotline,
Crompton Greaves Special Infrastructure ICD,
Food Park
Area Developed 273 Hectares Allotted 115
Hectares Units established 121 Major Groups
Birla, Jaypee Special Infrastructure Integrated
infrastructure development centres (IIDC)
Area Developed 790 Hectares Allotted 125
Hectares Units established 52 Major Groups
Raymond, Hindustan Petroleum, PBM, Ayur Special
Infrastructure Stone Park, Food Park
Area Developed 1,330 Hectares Allotted 618
Hectares Units established 286 Major GroupsHEG,
Crompton Greaves, PG, Godrej, Lupin, IFB, Oswal,
Nahar Special Infrastructure ICD, Food Park
BHOPAL AKVN
GWALIOR AKVN
JABALPUR AKVN
REWA AKVN
Area Developed 2,492 Hectares Allotted 1431
Hectares Units established 575 Major Groups
Tata, Ranbaxy, Eicher, Bridgestone, Hindustan
Motors, Kinetic, SRF, S Kumars, Gajra, Nicholas
Piramal, Indorama, IPCA, Bhilwara Special
Infrastructure SEZ, Crystal IT Park, Food Park,
Apparel Park
Malanpur, Malanpur Phase II, Banmore, Chainpura,
Siddhgawan, Pratappura
Rewa, Waidhan
INDORE AKVN
Mandideep, Pillukhedi, Mandideep Phase II
Borgaon, Maneri, Purena
Pithampur, Kheda, Dewas, Maksi, Megh Nagar
Source MPSIDC
8
Roads
9
Sector Profile Roads
10
Roads - Motoring Away
  • India has one of the largest road networks in the
    world (over 3.3 million km). The roads carry
    nearly 70 of freight and 85 of passenger
    traffic in the country.
  • Government expenditure on roads in India is
    significant - 12 of capital and 3 of total
    expenditure. Investment in the road sector is
    expected to touch USD 66.50 billion in 2005-07.
    As per National Highways Authority of India
    (NHAI), a total of 23,546 kms of roads would be
    constructed in the next two years. This
    construction would be conducted under following
    four programs, namely
  • Golden Quadrilateral (Program Under NHAI)
  • North-South and East-West (Program Under NHAI)
  • Port connectivity and other projects
  • Non NHDP (National Highway Development Program)
    Projects.
  • The focus of successive Governments on improving
    road connectivity across the country, has brought
    about significant investments in road
    development.
  • As per a recent World Bank study, the cumulative
    funding shortfall over the 10 year period is
    estimated at USD. 23.22 billion , approximating
    39 of the total requirement. The funding gap
    assumes that all the road user charges generated
    on the highways are returned to the highway
    sector. If the current proportion of road-user
    charge revenue is returned (56), then available
    funding for highways would be less than the
    maintenance needs, and the funding gap would rise
    to USD 39.11 billion.

Source National Highway Authority of India
(www.nhai.org)
11
MP Connecting India
  • MP has a well developed transport infrastructure
    of roads, rails and airports. 5200 km of
    National Highway runs across the state with
    total length of the roads estimated around 67,600
    km.
  • MP has the 3rd largest network of National
    highways in the Country after Uttar Pradesh and
    Rajasthan.
  • Since MP is centrally located within the country,
    most of the long haul road traffic in the
    north-south and east-west direction in the
    country has to pass through the state.
  • 18 National Highways including trunk routes of
    Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore,
    Delhi- Hyderabad complete their stretch by
    passing through the State.
  • State highways are of 9885 kms length,
    connecting key urban and tourist centers within
    the state
  • State roads provide convenient linkages to Kandla
    Port, Jawahar Nehru Port Trust.

ROAD MAP OF MP
DISTANCES OF MAJOR CITIES FROM THE STATE CAPITAL
Distances rounded off
Source NHAI (www.nhai.org)
12
MP Offering Specific Incentives
  • In terms of infrastructure, roads in particular
    has been recognised as the thrust area by the
    Government of MP.
  • In order to promote involvement of the private
    sector in construction and maintenance of roads,
    the Government has decided to offer projects on a
    Build-Operate-Transfer (BOT) basis.
  • Private sector participation initiative has been
    taken by MP Government as large funding amounts
    are required for such mega ventures.
  • Type Of Projects Identified For Private Sector
    Participation
  • Considering the usefulness to serve the economy,
    the intention of the Government is to involve
    Private Sector for taking up development of
    following type of projects on State Highways
  • (i) By passes
  • (ii) Bridges
  • (iii) Railway Over Bridges
  • (iv) Widening of existing roads
  • (v) Ring Roads near big cities.
  • (vi) Improvement/ maintenance of existing roads
    etc.
  • There is a significant opportunity for BOT in the
    national highways segment as they carry more than
    40 of the traffic even though they constitute
    just about 2 of the total road network in the
    country.

FEATURES OF MP BOT SCHEME
  • Foreign investments in the development of
    selected stretches of State Highways to maintain
    and operate them generally for a period up to 30
    years (concession period) after opening the
    facility for traffic and the entrepreneur is
    permitted to collect and retain toll as approved
    by the Government
  • Private entrepreneurs will design, construct,
    maintain and operate the facility from their own
    resources or funds borrowed from financial
    institutions, banks, open market etc.
  • To ensure free flow of traffic, the normal checks
    by the authorities will be conducted at entry and
    exit points only. The traffic on such facilities
    will be normally regulated by the entrepreneur.
  • Basic facilities for the traffic en route,
    provision for developing and operating highway
    related facilities such as restaurants, motels,
    fuel stations, rest/parking areas, shopping
    malls, transport nagars and other related
    facilities could be made. The income from such
    facilities will also enhance the viability of the
    project.

The Government is paying special attention
towards the quality of roads being constructed.
With the number of projects proposed, the private
sector participation is foreseen for the overall
development of the State.
13
MP Offering Specific Incentives
  • The State Government is also focusing on the
    development of the National Highways that run
    through the State to promote the participation of
    private investors. These works include the
    following
  • Rehabilitation of the roads
  • Maintenance
  • Construction of new patches
  • For NHDP in particular, the private sector has
    responded enthusiastically. Under this programme,
    projects valued at over USD 1.33 billion are
    being implemented. The NHDP has been extended to
    cover a 50,000 km road network, and these future
    works will be undertaken on a BOT basis (through
    toll or annuity).
  • GOVERNMENT DIRECT SUPPORT
  • The State Government will identify priority
    projects, and allow the private sector to design,
    construct and operate the toll roads. The choice
    of entry/ exit points may be mutually agreed
    between the Government and the entrepreneur.
  • The land for highway development will be acquired
    by the Government and given to the entrepreneurs
    on certain terms and conditions for the land.
  • Tax holiday for five years for road
    infrastructure development project as per the
    policy decision of Central Govt.
  • OTHER SUPPORT FROM THE GOVERNMENT
  • Project Implementation
  • The entrepreneurs will enjoy full freedom in
    carrying out the assigned project. However, they
    will have comply with certain standards, safety
    of structures, specifications, satisfactory
    operations and management as laid by the
    Government.
  • The Public Works Department (PWD) will play a
    major role in approvals and implementation.
  • Registration of entrepreneurs under special
    category
  • The State Government has registered entrepreneurs
    for carrying out work on a B.O.T. basis.
  • 35 firms have already been approved under this
    category
  • Modification in B.O.T. contract
  • Further to the inputs received from the
    entrepreneurs, the contract agreement to be used
    for the B.O.T. scheme has been modified and made
    more comprehensive to facilitate smooth working
    and execution.

Source www.mp.nic.in/pwd
14
Government Initiatives MP Road Policy
  • The main aim of the MP Road Policy is to work
    towards the up gradation of the existing road
    infrastructure so as to provide an efficient road
    network system along the length and breadth of
    the State keeping in mind that the accruing
    benefits may be passed on evenly to all sections
    of the society
  • Government of MP has made recent amendments in
    the Indian Tolls Act of 1932, so as to encourage
    private sector participation in mega ventures.
  • The major roads in the State have been
    rehabilitated or have been taken up for
    rehabilitation. The State has come up with road
    renewal programmes under which maintenance of the
    existing road infrastructure will be undertaken.
    The envisaged activities will be according to the
    following renewal regime
  • National Highways - One third of the road length
    every year
  • State Highways - One fifth of the road length
    every year
  • Major District Roads - One sixth of the road
    length every year
  • Village Roads - One eighth of the road length
    every year
  • All the major towns and district headquarters are
    linked with roads having high quality surfacing
    and riding comfort

MADHYA PRADESH ROAD POLICY
  • The main objectives of the Road Policy are
  • To provide connectivity to villages with a
    population of more than 1000.
  • The road network for villages having population
    less than 500, will be so planned that an all
    weather road will be available at a distance of 3
    km in plain areas and at a distance of 5 km in
    hilly areas.
  • Improvement of existing State road network system
    to 2 lane/ 4 lane roads to cater the need of the
    projected traffic.
  • To enhance the road infrastructure in towns and
    cities.
  • To effectively utilise the present resources.
  • To constantly update the highway technology by
    adopting modern techniques of construction and
    training of department personnel.
  • To ensure high standard of road safety and travel
    comfort.

15
MP An Investment Destination
  • The State Government of MP has taken initiatives
    to improve the condition of the roads on a
    priority basis. The budgetary allocation for
    roads has been increased from USD 90 Mn in
    2003-04 to around USD 210 Mn in 2005-06.
  • In the past 2 years, 12,500 kms of roads were
    constructed which is now projected to increase to
    40,000 kms more in the next 3 years
  • The State Government is encouraging the
    involvement of private sector to take up the
    projects on a BOT basis.
  • These initiatives by the Government are showing
    immediate results, with the traveling time being
    decreased significantly.
  • All the divisional headquarters have been
    connected to the State capital by road. It is now
    proposed that all the district headquarters will
    be connected to the Divisional headquarters.
  • At present 1000 kms of roads have already been
    laid down on a B.O.T. basis and construction of
    another 1100 kms is in progress.
  • Madhya Pradesh Road Development Corporation
    (MPRDC) is the nodal agency carrying out all the
    developmental work in association with the
    private sector.
  • It is proposed that MPRDC will carry out the
    development of 3000 kms of road in the next 3
    years with assistance from NABARD and the Central
    Government.

Leading Road Developers such as Ramky
Infrastructure Construction Private Limited,
Unitech Limited, KNR Constructions Limited,
Madhucon Projects have sizeable presence in the
State and are involved in several National and
State Government projects. The peaceful
environment in the State and the cooperative
State Government facilitates faster
implementation of the project thereby increasing
the profitability of the project.
16
Way Forward
The State Government has already completed the
work on a total of 2977.25 km length of roads
with the total cost of USD 361.22 bn. There are
various projects where the Government is seeking
private partner investment. Following are some of
the identified projects that are proposed to come
up in the near future. Many of these high density
roads will be developed under BOT/ private
development methods. This offers a significant
opportunity for infrastructure players to invest
in the sector.
Considering the successful completion of other
mega projects and the potential lying in the up
coming ventures, the road sector in MP is poised
to become the most lucrative areas for private
investors in times to come.
BOT
Source mprdc.nic.in
17
Connecting Further
National Highways Authority of India
www.nhai.org
Public Works Department, Madhya Pradesh
www.mp.nic.in/pwdmp
Madhya Pradesh Road Development Corporation
mprdc.nic.in
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