In an exclusive interview to The Sunday Guardian, Ajay Bhadoo, Secretary to Gujarat Chief Minister and CEO of the Gujarat Infrastructure Development Board (GIDB), spoke his mind on a variety of issues. Excerpts:
Q. By when is the Dholera Special Investment Region (SIR) of the Delhi Mumbai Industrial Corridor (DMIC) expected to be ready to allot land to “anchor investors”?
A. The work in the Activation Area of about 22.50 sq km of the Dholera Special Investment Region is in progress under the auspices of a new SPV named Dholera Industrial City Development Limited. Two major tenders for roads and services and office building have been awarded and ground work is likely to start by October this year. Simultaneously, we will be aggressively marketing for Dholera through pre-Vibrant Summit events, exhibitions, seminars and roadshows, both within and outside the country. In view of the above, the land allocation will be initiated during and subsequent to Vibrant Summit events to all prioritised anchor tenants who have been approaching us since last the Vibrant event and ongoing national and international events through business promotion by both the state and Centre. Thus, the land allocation will coincide with such events.
Q. Will there be a specific and elaborate land allotment policy as far as the Dholera SIR is concerned? If so, can you give some details of the land allotment policy at Dholera SIR?
A. We are planning propose a dedicated land allocation policy for DSIR and work has already been initiated to prepare this policy. We are going to propose compatible, comparable and comprehensive policy of land allocation taking into consideration the prevailing market, other investment areas, land use planning of DSIR. A final draft would be put up to the Board of the Dholera City Development Company for consideration and approval soon and will be open to the public thereafter.
Q. One of the most important future projects of the GIDB is the construction of the Dholera International Airport project. According to reports, the Dholera International Airport Company, formed for the purpose, has obtained all the necessary approvals such as site clearance, environment clearance, in-principal approval and ‘No objection clearance’ etc. from the Government of India. When is the airport likely to be operational?
A. To accomplish the prestigious International Airport Project near the upcoming DSIR, the state government has formed the Dholera International Airport Company Limited (DIACL). DIACL has got done the DPR and Master Planning by the Airport Authority of India. Subsequently, DIACL obtained necessary clearances and approvals from the Government of India like site clearance, No Objection Certificate, environment clearance and In-Principle Approval for the airport project. Adhering to the Greenfield Airport Policy 2008 of GoI, DIACL will develop the proposed airport project in PPP mode. To take the project forward, DIACL is in the process of appointing a Transaction Advisor (TA). The RFQ cum RFP document for appointment of TA has already been floated on 19 May 2016 and within two months, TA will be selected. While structuring the airport project, DIACL will also ascertain the possibilities of developing MRO facilities and Aviation Zone in the nearby government land. With bankable financial model of the project, DIACL will initiate the process of selection of a private developer. The TA assignment is expected to be completed in 20 months. The private developer selected through open tendering would then implement the airport project.
Q. The Diamond Research and Mercantile (DREAM) city project is one of the major (Diamond Research) projects to be located at Surat. What is the status of the project?
A. The Government of Gujarat will establish a Diamond Research and Mercantile (DREAM) City at Surat. The DREAM City shall primarily consist of an Anchor Investor - Diamond Bourse for trading of rough, cut and polished diamonds nationally and internationally, along with Research and Services and allied infrastructures for making the DREAM City Project self-sustainable.
The preliminary study suggests that by 2039, the project has a potential of generating direct and indirect employment to the tune of 95,959 and 37,573 respectively and GDP contribution of US $5.497 billion. Further, the project will save on the transportation cost between Mumbai to Surat provided it attracts prospective diamond traders. Two investment intention agreements have been signed during VGGIS-2015 wherein one is a major Anchor Tenant viz. Surat Diamond Association.
The DREAM City Project shall be implemented by the Diamond Research and Mercantile (DREAM) City Company Limited (DreamCCL), a state government-owned Special Purpose Vehicle (SPV) being formed especially for implementing this project successfully and expeditiously. The feasibility study and concept plan of the project is complete and the Detailed Master planning of the area is in progress by a reputed consulting firm from Netherlands.
Q. One of the state government’s mandate is study of the potential for development of islands in Gujarat and establishment of an island development Authority. As we understand, the above task has been given to GIDB. What is the progress on the same?
A. The Government of Gujarat, through the island development study, aims at building up a case to do the initial mapping of the islands of Gujarat, assess and assimilate data on their current status in terms of topographic conditions, Demography, vegetation, natural resources, and development potential in terms of tourism, commerce, residential, marine and the like. The GIDB has initiated the overall island mapping and development potential study for the islands of Gujarat with respect to Analysis of the Coastal Regulation Zone Policy ( Notification), Government of India viz-a-viz the activities permissible for island development, analysis of the position of each such island viz-a-viz the Government of India Policy on environment protection, eco-sensitivity, wildlife protection and forest development, assess potential for traffic along with their origin-destinations due to trade and commerce taking place at some of the major islands of Gujarat. The study shall also include the island development of Lakshadweep, Andaman &Nicobar and one or two international case studies like Singapore in terms of legal and institutional framework and benchmark their successful developments for Gujarat specific island development.
The studies are also under progress for three individual islands namely BeytDwarka, Shiyal bet and Pancham-Bela –khadir islands for their development potential assessment.
Q. Gujarat has promoted Public-Private Partnerships (PPP) to a great extent and the GIDB is a “focal point organisation” mandated under the GID Act to promote private sector partnership. Based on PPP experiences over the past few years, the GID Act has been amended in the past. Has this resulted in attracting more PPP investments in Gujarat?
A. Gujarat has gone ahead in the promotion of Public-Private partnerships to a great extent. Gujarat has a legal framework in the form of the GID Act, organisation for developing PPPs in the form of GIDB and sector policies in place to attract private sector investments. GIDB is a focal point organisation mandated under the Act to promote private sector partnership. GIDB plays a pivotal role in project structuring, undertaking feasibility studies, prepare and approve concession agreements, oversee bidding process, lays down priorities of the project, advise in matters of policy and undertake master plan exercise. GIDB also plays nodal role in railway projects taken up with PPP. The GIDB is a high-powered body under the chairmanship of the CM.
The BOT law of the state entitled “Gujarat Infrastructure Development Act -1999” has been framed. The Act provides for a regulatory framework for private sector participation in financing, construction, maintenance and operation of infrastructure projects undertaken on a private sector participation- basis in Gujarat. This Act has also given a statutory status to the Board under which the GIDB acts as a nodal agency for development of infrastructure in the state.Based on PPP experiences over the past few years, the Act has been amended in 2006 to attract further PPP investments in Gujarat. Section 9 of the Act provides for competitive bidding as a preferred mode of developer selection. Section 10 of the Act provides for developer selection by inviting comparative bids. Section 10 A of the Act provides for direct negotiation in certain specific cases. The major amendments to the Act are:
1. Financial assistance from the state government to the project increased to 20% instead of 15% subsidy originally proposed.
2. Concession period for a project can be extended beyond 35 years on mutually agreed terms between both parties.
3. Projects of special nature can be directly negotiated instead of going through the competitive bid process. These projects include:
A project which is innovative or involves proprietary technology or franchise which is exclusively available with the person globally.
A project wherein competitive public bidding as provided in Section 9 has failed to select a developer.
A project to provide social services to the people, including community services and public utilities.
An infrastructure project which is an essential link for another bigger infrastructure project owned or operated by the same Entity/person.
Some of the projects implemented in Gujarat in PPP mode through competitive bidding under the GID Act 1999 are the Zadeshwar Bridge, Dahej Chemical Terminal, Hazira & Dahej LNG Terminals, Hazira and Dahej container terminals and bulk cargo terminal, four laning of roads like Bhuj-Bhachau Road, Nakhatrana- Panandhro Road, container terminals at Mundra, and the like. Some of the projects implemented under Section 10 of the GID Act are three mini Hydro power projects and one Floating Storage and Regassification unit (FSRU) Terminal at Jafrabad. The specific amendments like enhancement of concession period or increase in financial assistance from 15% to 20% is in accordance with the Government of India’s policies for PPP.