Raj focusing on infrastructure to boost tourism

By PTI |

Better residential and other basic facilities will be created in villages

Jaipur: Noting that tourism plays a significant role in development, Rajasthan Chief Minister Vasundhara Raje said her government was focusing on improving the infrastructure of the state to give the sector a boost.

This will take the state to new heights at a greater pace, Raje said while speaking during a presentation at her office.

The presentation, given by a firm, was aimed at exploring possibilities for development of tourism in the state.

Tourism is the key to the state's advancement, Raje said, adding that proper planning is required for this.

The Chief Minister underlined the need to connect tourism with rural traditions, folk arts and handicrafts that fortifies tourism and generate employment opportunities for the local youth, according to a release.

Raje said better residential and other basic facilities were needed to be created in villages for the tourists to stay, experience and enjoy the rural life in its native form.

The Chief Minister said her government was focusing on infrastructure development to boost tourism.

Chief Secretary Rajiv Mehrishi, Member of Chief Minister's Advisory Council Mira Mehrishi, Additional Chief Secretary (Infrastructure) C S Rajan, Principal Secretary (Finance) P S Mehra, Principal Secretary (Tourism) Shailendra Kumar Agarwal, Secretary (Planning) Akhil Arora and Director (Tourism) Vikram Singh were among those present in the meeting. See more at: igovernment.in

WB keen to fund city's two new mega Metro projects

By PTI | 15th September 2014

The proposed Dahisar-Bandra-Mankhurd Metro line is estimated to cost Rs 28,900 crore

Mumbai, September 15: With the Japanese government taking a lead in funding the megapolis' many signature infrastructure projects, the World Bank has evinced interest in funding the proposed Charkop-Dahisar and Wadala-Teen Hath Naka Metro projects.

The Japan International Cooperation Agency (JICA) has already committed to fund the Mumbai Metropolitan Region Development Authority's (MMRDA) two ambitious projects-- the just announced Rs 23,136-crore Colaba-Seepz Metro and the 22 km Rs 9,630-crore Mumbai Trans Harbour Link (MTHL), which still remains on paper.

"The MMRDA is undertaking large infrastructure projects which require huge investments. Recently, the JICA has committed to funding two major projects in the city and it has also shown interest in funding some more projects as well.

"At the same time, the World Bank has also expressed interest in funding two other proposed metro projects which we will be soon taking up," MMRDA additional metropolitan commissioner Sanjay Sethi told PTI here.

The World Bank had earlier funded two phases of Mumbai Urban Transport Projects implemented by the authority. While phase I involved Santacruz-Chembur and Jogeshwari-Vikhroli link roads, phase II was to strengthen the suburban railway networks and improving its operational efficiency.

The state government recently merged the stalled Charkop-Bandra-Mankhurd Metro line with the proposed Dahisar-Charkop corridor by converting the entire line underground instead of the originally planned elevated line.

The proposed 40.2-km Dahisar-Bandra-Mankhurd Metro line is estimated to cost Rs 28,900 crore with all the 37 stations underground.

The cost of 32-km Charkop-Bandra-Mankhurd corridor was originally pegged at Rs 7,660 crore, while the 7.8-km Charkop-Dahisar corridor was estimated to cost Rs 4,680 crore.

The state has also cleared a 30.8-km-long metro link connecting Wadala on the easter fringe to Teen Hath Naka on the northwestern fringe that will have 31 stations. The link will have 10 underground stations while the rest will be on elevated line.

Source: www.igovernment.in

LIC & IIFCL to invest Rs 10k cr in take-out financing scheme

Mumbai: India Infrastructure Finance Company Ltd (IIFCL) and Life Insurance Corporation (LIC) have drawn up plans to invest Rs 10,000 crore during 2011-12 in the infrastructure sector, through the take-out financing route.

They have agreed to jointly buy out up to 40 per cent of infrastructure loan portfolios of banks, each having 20 per cent exposure.

“IIFCL will take all the initiatives with the banks regarding the portfolios. We have earmarked a total of Rs 10,000 crore, each investing Rs 5,000 crore, for the current financial year,” S K Goel, chairman IIFCL told Business Standard.

Under the scheme, IIFCL is allowed to take up to 75 per cent of bank loans for an infrastructure project on to its books, thereby freeing banks’ capital and enabling them to lend in new projects.

Since IIFCL has inherent expertise in infrastructure financing, it will carry out all the due diligence of the projects, Goel added.

A senior LIC official said there are some issues that need to be addressed.

“The main issue is the sharing of the liabilities. We are yet to take a call on the extent of liability which LIC can bear in case an asset becomes non-performing. We need to understand the risk carefully before entering into a particular project. Then we also need to understand to what extent we can invest under the sector investment norms,” the official added.

According to the Insurance Regulatory and Development Authority (Irda) guidelines, LIC’s exposure in a single project is capped at 10 per cent of the total investiable fund. The insurance regulator also mandates life insurers to invest at least 15 per cent of their controlled funds in infrastructure and social sectors.

According to sources, the idea of roping in LIC to partner IIFCL in the take-out financing scheme was mooted by the finance ministry in the wake of the lukewarm response of the take-out financing scheme floated by the infrastructure financier. So far, IIFCL has been able to disburse only Rs 90 crore of the total sanctioned amount of Rs 3,000 crore under the take-out financing scheme.

India to invest $1tn in infra sector in 12th Plan

The move is aimed at achieving the nine per cent growth target for the next Five Year Plan

Prime Minister Manmohan Singh said good road infrastructure was crucial to achieving nine per cent growth, targeted for the next Five Year Plan (2012-13 to 2016-17), and adequate investment would be made towards that.

At the same time, he insisted that the awards on private sector were placed in a fair and transparent manner so as to dispel any fear or charges that the government was resorting to any form of favouritism or arbitrary decisions, reports IANS.

"Infrastructure will play a key role in achieving our growth target of nine per cent. Our effort is to double the investment of $500 billion in the 11th Five Year plan to around $1 trillion in the 12th plan," the Prime Minister said.

"It is also necessary to ensure projects are awarded in a fair and transparent manner to avoid suspicion of favouritism," he told a conference on 'challenges and opportunities in public-private partnership in national highways'.

According to Road Transport and Highways Minister CP Joshi, the government will award contracts under public-private partnership to lay around 7,800 km of national highways worth an estimated Rs 50,000 crore by the end of this year.

"Contracts worth Rs 21,000 crore have already been awarded in the first four months," he said, hoping that the target of 20 km of national highways every day would be met.

245 infrastructure projects awaiting green nod

Of the 245 projects seeking clearance from the Ministry of Environment and Forest, 136 are in the mining sector

New Delhi: About 245 infrastructure projects — a majority of them in the mining sector — are pending with the Environment Ministry, officials said.

Of the 245 projects seeking environment clearance, 136 are in the mining sector followed by 77 in building and construction sector, the statement issued by the Ministry said, reports IANS.

Besides, 22 thermal power projects and 10 hydro power projects are pending with the Ministry, it added.

India plans debt fund to finance infrastructure

New Delhi: India will soon set up a debt fund to facilitate financing of long-term infrastructure projects. The government said on Friday it has finalised the broad structure of the fund that would be set up either as a trust or a company.

"Infrastructure debt fund is a novel attempt to address the issue of sourcing long-term debt for infrastructure projects," the Finance Ministry said in a statement, reports IANS.

After consultations with potential investors, infrastructure companies, regulators and experts, the Finance Ministry has finalised the broad structure.

As per its draft, the proposed fund would be set up either as a trust or as a company.

A trust based infrastructure debt fund (IDF) would normally be a Mutual Fund that would issue units while a company based fund would normally be a form of non-banking financial company that would issue bonds.

Finance Minister Pranab Mukherjee had on February 28 announced in the budget for this fiscal (2011-12) the setting up of debt funds through special purpose vehicles to attract foreign investments in various infrastructure projects.

To attract off-shore funds into IDFs, Mukherjee had also announced that tax on withheld interest payments on the borrowings by the IDFs would be reduced from 20 per cent to 5 per cent. Income from the IDFs is also proposed to be exempted from income tax.

"The structure of IDFs would be closely reviewed for its efficacy and further refinement. RBI will issue regulations for setting up of IDFs on the company route," the statement said.

India aims to invest over US $1 trillion on infrastructure projects during the 12th Plan period (2012-17) as against the estimated US $500 billion during the current plan period.

Infrastructure projects, given their long pay-back period, require long-term financing in order to be sustainable and cost effective. However, banks which have been the main source of funding these projects are unable to provide long-term funding given their asset-liability mismatch.

IDFs through innovative means of credit enhancement is expected to provide long-term low-cost debt for infrastructure projects by tapping into source of savings like Insurance and pension funds which have hitherto played a comparatively limited role in financing infrastructure.