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Presentation on Strategies for Infrastructure Development in Karnataka

Presentation on Strategies for Infrastructure Development in Karnataka. By: V. P. Baligar. Importance of Infrastructure. Basic requirement for economic growth Growth rates could have been higher with better infrastructure Essential for improving quality of life

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Presentation on Strategies for Infrastructure Development in Karnataka

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  1. Presentation on Strategies for Infrastructure Development inKarnataka By: V. P. Baligar

  2. Importance of Infrastructure • Basic requirement for economic growth • Growth rates could have been higher with better infrastructure • Essential for improving quality of life • Positive impact on Human Development Indices.

  3. Initiatives of Govt of Karnataka • Created a separate Department for Infrastructure in Sept 1996 • Formulated an Infrastructure Policy in 1997 • Incorporated ‘Infrastructure Development Corporation (Karnataka) Ltd’ (iDeCK) in June 2000 • Incorporated ‘Rail Infrastructure Development Company (Karnataka) Ltd (K-RIDE) in Nov 2000 • A Special Purpose Vehicle – Hassan Mangalore Rail Development Company Ltd (HMRDC) set up in July 2003 • Other Departments have set up institutions such as KRDCL, K-SHIP, KUIDFC, etc

  4. Central Govt Initiatives • Set up a PPP Cell in Dept of Economic Affairs • Formulated a Scheme: ‘Viability Gap Funding’ (VGF) to financially support PPPs • Established ‘India Infrastructure Finance Company Ltd’ (IIFCL) to provide long term finance to infrastructure projects • Model Concession Agreements drafted for Road Sector Aims to raise infrastructure investment from 4.7% of GDP to 8%

  5. Infrastructure: Challenges A.    Policy Level • Frequent changes in the policy • Lack of information on the policy and procedures • Complicated concession agreements B.    Demand Side • One Billion people • Rising aspirations • Unpredictable demand

  6. Challenges C. Accountability issues • Maintenance of transparency • Accountable to the legislature • Scrutiny by C&AG D. Bureaucratic hurdles • Clearances from a large number of agencies • Delay in processing • Corruption and harassment

  7. Challenges….. • E. Environmental issues • F. Legal problems • G. Land acquisition and rehabilitation • H. Operation and maintenance

  8. Infrastructure: Opportunities A. Agriculture: • Agriculture and Horticulture markets • Floriculture parks • Agro-food processing • Cold storages B. Energy: • Generation • Transmission • Oil and Gas pipe line

  9. Opportunities…. C.  Industrial Infrastructure: • Industrial parks • SEZ • Industrial townships  D.   Irrigation: • Canals and dams E.  Tourism: • Hotels and resorts • Convention centers • Trade fairs • Amusement parks

  10. Opportunities…. F. Transportation and Logistics • Roads and Bridges • Railways • Airports and Airstrips • Urban transport • Minor ports • Inland water ways • Truck terminals • Ware houses 

  11. Opportunities…... G.    Urban infrastructure • Townships • Water supply and sewerage • Solid waste management

  12. New Initiatives and Strategies • New Infrastructure Policy 2007 Drafted Objective: To provide a fair and transparent policy framework to facilitate and encourage Public Private Partnership (PPP) in upgrading, expanding and developing infrastructure in the State.

  13. Benefits of New Policy • Savings in costs due to innovative designs, timely projectimplementation and higher efficiencies in operations • Enhanced quality of services to users due to better managerialpractices & efficiencies • Reduction in, and gradual elimination of, pricing constraints • Enabling public funds to be earmarked for other commercially non-viable but socially justifiable projects • Financial innovation and development of cost-effective solutions • Greater employment opportunities in the infrastructure sector

  14. Strategies….. • Payment for Services - Inculcation of “Provider charges” and “User pays” Principles - Subsidies in user charges for economically weaker sections

  15. Strategies… Contractual Structure • Existing Assets: O & M Contracts, Lease of Assets, Rehabilitate, Operate Maintain Transfer (ROMT) Contract • New Assets: BT, BLT, BTO, BOT, BOOT, BOO, BOST, BOOST, BOLT B: Build, O: Own/Operate, L: Lease, S: Share, T: Transfer

  16. Strategies… • Setting up Special Purpose Vehicles(SPVs) where appropriate • Selection of Private Sector Partner through a transparent procurement process. • Procurement in all Projects to be on the basis of a transparent bidding process

  17. Strategies… Regulatory Framework • Suitable mechanisms to be worked out to facilitate expeditious land acquisition • Set up independent regulatory authorities for some sectors

  18. Institutional Framework • Infrastructure Development Department(IDD) to be the nodal agency to coordinate PPP projects • A PPP Cell to be set in IDD to assist in identification, development, implementation review of PPP projects • District Level Committee under DC to assist PPPs • Single Window Agency under the Chairmanship of CS/ACS to approve projects up to Rs 50 cr and to recommend projects over Rs 50 cr to HLC • High Level Committee under the Chairmanship of Chief Minister to approve projects above Rs 50 cr.

  19. THANK YOU

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