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Construction : Focus | May 2016 | Source : Infrastructure Today

En route to MAHA growth

The Maharashtra government is pulling all the stops to ensure that the state becomes the preferred destination for infrastructure investment. The excellent law and order environment in the state also strengthens its position as a preferred place for large-scale economic activity.
By signing Memorandums of Understanding (MoUs) worth Rs.8 lakh crore, Maharashtra managed to outpace other states in the recently held Make in India week. The MoUs being signed by various companies, and with these firms indicating their investment intentions, clearly showcases the faith being reposed in Maharashtra by the industry. This is a far cry from the situation a couple of years back.

A case in point is the Schindler Group. When this group announced its intention to invest Rs.300 crore in Maharashtra three years back, the then UPA government in power gave it a red carpet welcome. However, the red carpet invitation turned into a nightmare for the company when, despite the entire plan being ready, the erstwhile government ordered Schindler to freeze its plans. The reason given was ostensibly the River Regulation Zone Policy.

Another example is a chemical project of Sudarshan Chemical worth Rs.1,100 crore, which has now been resurrected with the scrapping of the River Regulation Zone Policy. In fact, just because of the scrapping of this policy, various companies are expanding their manufacturing units in MIDCs.

Apurva Chandra, Principal Secretary (Industries), Government of Maharashtra says, ´With the current government scrapping the River Regulation Zone Policy, now the company´s plant is not only up and running, it also plans to expand its current production unit.´

In fact, it is now evident that the current state government is taking a fresh look at the existing policies on its books and is weeding out those which it feels are irrelevant. The UK follows a similar approach.

Adi Godrej, Chairman, Godrej Group is all praise for the current government led by Chief Minister Devendra Fadnavis. He says, ´This government does not allow crony capitalism under its regime, which was not the case in most of the past governments.´

However, Godrej has some advice for the government, ´The present regime should create a climate where a start-up need not go through bureaucratic hurdles. It will kill their instinct.´

Reducing permissions
India languishes at the bottom of the table in the World Bank´s ease of doing business index. Be it contractual obligations, construction permissions or setting up an industry, these days investors come with a package of negotiations. Says a source in the Maharashtra government, ´These negotiations have put enough pressure on the government, to change its attitude towards investors, by way of either amending a particular policy or scrapping it.´

Recently, the Municipal Corporation of Greater Mumbai (MCGM) has made available its building proposal manual online. The number of no-objection certificates required for construction has been halved to 58 from 119. Builders can now expect to get all construction-related permissions at one go, within 60 days of submitting their proposals, as against 365 days earlier.

´This was an enormous task for us,´ a visibly excited Ajoy Mehta, Commissioner, MCGM told Infrastructure Today on the sidelines of CII´s Doing Business in Maharashtra event.

According to Mehta, earlier, scrutiny used to be done at multiple levels and accordingly changes were made in the relevant reports. Now scrutiny is done only in two parts - the fact check at the Assistant Engineer level and the final report at the Executive Engineer level, thus eliminating layers of decision-making. At present, in Maharashtra, MCGM is the only corporation which has integrated its processes with the Airports Authority of India and the Archeological Department of India. In the next phase, Mehta divulged, ´We will integrate our system with all departments including railways, environment and defence.´

The state government has its ambitious ´Make in Maharashtra´ plans to boost job creation and growth through the manufacturing sector. It has slashed the number of permissions required for starting new industries from 76 to 37 by eliminating unnecessary procedures; it plans to bring the number further down to 25.

Meanwhile, the revenue department has also done a commendable job. The department has made available land records of 7/12 extract going back up to 200 years in the public domain, in addition to around 29 lakh property documents. Swadheen Kshatriya, Chief Secretary, Maharashtra lauded the efforts of the revenue department. He says, ´The objective of going digital is to gain investor confidence.´ He explains the revenue department´s objective, ´World over, land records have presumptive value which can be challenged. We want to give investors a conclusive value to the land document.´

MoU monitoring
It is now evident that the current government means business. And with its peers competing with each other for investment, Maharashtra is trying its best to top the charts.
The government has signed 2,603 MoUs worth Rs.8.04 lakh crore during the Make in India week. Maharashtra has also said that 30 lakh jobs would be created from these fund inflows.
The state government has also allotted land to 198 industries following the agreements signed during the Make in India week in February.
In an exclusive interview with Infrastructure Today, Subash Desai, Industry Minister, Maharashtra said that these industries have bought land from the state and will soon start work. He added; ´Four other industries have come forward to invest `40,000 crore in the Smart Cities project as well.´
Meanwhile, to monitor the MoUs signed during the Make in India event, the state has also set up a task force under the Chief Secretary to pursue the agreements. The industries minister said that more agreements had been translated into reality in Maharashtra compared to other states.
The highest investment of Rs.4.06 lakh crore has been made in the industries sector, followed by Rs.2.3 lakh for the energy sector, Rs.1.1 lakh for housing, Rs.0.37 lakh for CIDCO, Rs.0.11 lakh crore for tourism and Rs.0.09 lakh crore in miscellaneous sectors.
For the the Smart City projects, Navi Mumbai Smart City (Orange City) has invested Rs.19,989 crore, Sunstream City Private Limited has invested `11,900 crore, Reliance Indus Infra has invested Rs.8,570 crore and Broadway Integrated Park Limited has invested Rs.1,200 crore. The proposals are in various stages of development and would soon be given all the permissions.
Desai also says that the government is ensuring that land is reserved in Maharashtra Industrial Development Corporation (MIDC) zones for small and medium businesses. However, the state has some catching up to do.
The latest economic survey report of Maharashtra suggests that under its ambitious Make in Maharashtra programme, the state has approved only 3 per cent of the projects signed during the last two years. As per the state government´s Economic Survey Report (ESR), 279 industrial projects with an investment of Rs.45,010 crore were approved in 2014-15 and 218 projects were approved with an investment of Rs.18,759 crore in 2015-16 (until October). Of these, only 16 projects have gone into commissioning.
Of the total stated investments of the projects approved in fiscal 2014-15 and the seven months thenceforth (till October), less than 2 per cent (Rs.1,069 crore) has so far materialised.
Chandra adds: ´Now, with the government leaving no stone unturned on reforms, Make in Maharashtra has to be go beyond slogans.´

Maharashtra´s port-led development
The recently held Maritime India Summit (MIS) 2016 has witnessed windfall investments for the state´s port-led development plans. In MIS 2016, the Maharashtra Maritime Board (MMB) signed a series of agreements with various companies to develop port-led projects.
These include development of a jetty at Mankhurd in north-east Mumbai by the Yogayatan Group, a floatel by WB International for Rs.7,400 crore (in phases), a separate captive jetty at Revdanda (Raigad) by Indo-Energy International (for a thermal power project) and an investment by JSW Infrastructure for its steel project, worth Rs.1,640 crore.
Others include a roll-on-roll-off (Ro/Ro) service, an LNG terminal and a PVC plant, which will come up at Dighi Port in Ratnagiri at a cost of Rs.1,200 crore.
The Jawaharlal Nehru Port Trust (JNPT) has also signed a pact with the Maharashtra Tourism Development Corporation (MTDC) for launching an amphibian bus service for Mumbai which would be procured by JNPT and operated by MTDC.
Among 25 major MoUs worth several crores signed by JNPT, other major ones include a Rs.135 crore food & steel processing unit by Roopam Group at Jalna, a `100 crore Free Trade Warehousing Zone by LMJ Logistics, a `200 crore investment in the Ihini Industrial and Logistics Park, Rs.250 crore by JWR Logistics, Rs.500 crore by Arshiya Ltd, Rs.759 crore by Monopoly Innovations for a biodiesel project, and a `475 crore biodiesel and edible oil project by Emami Agrotech Ltd.
Meanwhile, the state´s flexible approach towards its port policy has been helpful in encouraging new ideas and new partners. For connectivity purposes, the Maharashtra government is likely to form a Special Purpose Vehicle - the Maharashtra Port Connectivity Corporation - a dedicated organisation for providing connectivity to ports in the State.
JSW Infrastructure, a leading infrastructure development company, is working on several projects in Maharashtra that include, Jaigarh port phase-II, Jaigarh connectivity, Dharamtar port, Salav Captive Jetty, Nandgaon Captive Jetty and Nandgaon connectivity. The total investment is around Rs.10,000 crore.

Capt BVJK Sharma, Jt MD and CEO, JSW Infrastructure, says, ´We are targeting 200 mtpa of capacity through greenfield and brownfield expansions in the next four years.´
In addition, the Ministry of Shipping has identified Jaigarh Port for the formation of a Coastal Economic Region (CER) under the visionary Sagarmala Project on the West Coast, along with JNPT and Mumbai Port, which will drive the socioeconomic development of the region.

Housing commitments
Recently, the Maharashtra Chamber of Housing Industry (MCHI) and CREDAI jointly signed an MoU with the Maharashtra government. Under the agreement, around 28 developers are likely to invest Rs1.10 lakh crore in six projects for constructing 5.69 lakh affordable homes. Prakash Mehta, Minister for Housing, Maharashtra lauded the efforts of MCHI and urged the Chief Minister to formulate a structured definition of affordable housing.
´We want to construct 25 lakh affordable units in the state and we have undertaken a small initiative in this regard,´ Mehta said.
According to an MCHI official, in terms of revenue, these 5.69 lakh homes will translate into sale value of around Rs.3 lakh crore for the government, and will yield taxes of around Rs.75,000 crore.
During the MoU ceremony, Chief Minister Fadnavis also gave his commitment to the industry body for a hassle-free permission regime which will help in completing the affordable housing projects in the Mumbai Metropolitan Region.
Meanwhile, in another development, CIDCO´s Navi Mumbai Airport Influenced Notified Area (NAINA) is also receiving major investment commitments. CIDCO has signed MoUs worth `29,000 crore to develop township projects in the NAINA region, including the Khalapur Smart City project.
One of the major investors who has shown interest in the development of the NAINA region is Wadhwa Construction and Infrastructure. The company has committed Rs.10,000 crore, followed by Marathon Group (Rs.4,960 crore) and Running Acres Estates (Rs.4,550 crore).
CIDCO has struck a deal with the local villagers to develop the Khalapur Smart City project entailing an investment of around Rs.7,900 crore.
In this regard, the city corporation has signed an MoU with three civic bodies, including Khalapur Nagar Panchayat, Kalote Mokashi Gram Panchayat and Nadode Gram Panchayat, representing 11 villages to develop Khalapur Smart City.
For the Khalapur project, CIDCO has acquired land to the tune of 10,000 acres from villagers. According to an official from CIDCO, the company will form a Special Purpose Vehicle for this project, which will be responsible for developing internal infrastructure.
CIDCO says that the estimated cost of the project is Rs.7,909 crore. The SPV will be required to raise Rs.3,827 crore, while CIDCO will infuse Rs.4,622 crore.
´We are targeting to commence work on this project by 2017,´ adds the official.

The DMIC route
The Delhi-Mumbai Industrial Corridor (DMIC) covers eight districts of Maharashtra, passing through Dahanu Road, Virar, Vasai Road, and Diva, terminating at JNPT. Once completed, the mega project will create 2.3 million industrial jobs and additional industrial output of Rs.20 trillion. In this connection, the Maharashtra government has already signed a State Support Agreement and a shareholding agreement with the Centre for the first phase. During the first phase of DMIC, industrial areas will be developed at Dighi Port in Raigad and Shendra-Bidkin near Aurangabad.

To begin with, the Shendra-Bidkin Industrial Area will be developed at an investment of Rs.17,391 crore spread over 84 sq km in Aurangabad. Initially, the government will develop 32 sq km. The project covers a multimodal logistics park at Karand, an exhibition-cum-convention centre at Aurangabad and a water supply scheme for Shendra. Meanwhile, the Shendra-Bidkin area will be developed as a Smart City with innovative technologies introduced for sustainable development and improved quality of life. Investment in sectors like rubber, plastic, petroleum, chemicals, transport equipment, machinery, metal, alloy, fibre and textiles, leather and food processing are expected to come up in big way.

Increasing Road Network
For doing business, every state is required to strengthen its road network for seamless transportation. Maharashtra is staking a lot on this initiative. Speaking to Infrastructure Today on the sidelines of the Make in India event, Chief Minister Devendra Fadnavis said that the Centre has given the state an assurance of investing Rs.3 lakh crore for the infrastructure development in Maharashtra over the next three years.

For the roads sector, the Centre, with the help of the Maharashtra government, will complete projects worth Rs.68,000 crore by December 2016. Meanwhile, the Centre will also increase the length of National Highways in the state from the present 7,000 km to 22,000 km.

´We are also working on preparing a detailed project report for the Nagpur-Mumbai Super Communication Expressway. In addition, we have also undertaken a big road construction plan under annuity basis along with rural road projects under the Chief Minister Gramin Sadak Yojna which is around Rs.3,000-3,500 crore,´ Fadnavis added.

Factfile


  • In land allotment and obtaining construction permits, Maharashtra scored third position behind MP and Gujarat, according to the DIPP.
  • According to DIPP assessment, Maharashtra ranked 8th amongst 32 states with a score of 49.43 per cent.
  • Maharashtra has completed digitisation of 90 per cent of its land records.
  • Time obtaining for electricity connections has been reduced from 82 days to 15 days.
  • Maharashtra has abolished the Industrial Location Policy which restricted expansions.
  • The entire MIDC land bank has made available online for investment purposes.

- Rahul Kamat

 
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