Madhya Pradesh: Means Business

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Madhya Pradesh: Means Business

Roads

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Overview

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.

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

Total electricity generation capacity 6,449.25 MW*

India’s first greenfield SEZ Indore SEZ

Industrial Centers 8

The State is centrally located

Investor friendly Government policies

Madhya Pradesh has one of the upcoming industrial base in India

Economic Snapshot Madhya Pradesh is emerging as a key growth center for the Country

Madhya Pradesh (MP) – State that means businessOverview

MP is rich in low grade coal suitable for power generation. Potential of hydro-energy generation. Installed power capacity (MP’s share)

Hydel Power Generation: 852.7 MW* Thermal Power Generation: 2,147.5 MW*

Power Electricity generation capacity at present is 6,449.25 MW and estimated to rise to a surplus in 2008-09

*Ministry of Power (powermin.nic.in) **Source: Indiastat.com (as on 23 Feb 2006)

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• 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.

• 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.

• 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.

Enabling Infrastructure

MP IS CENTRALLY LOCATED AND WELL

CONNECTED WITH ALL MAJOR CITIES IN INDIA

*Source: Department of Road Transport & Shipping (morth.nic.in) **Source: www.destinationmadhyapradesh.com

INDORE BHOPAL

JABALPUR

GWALIOR

KHAJURAHO

4

Third largest producer of

cement in India*

12 blocks with reserves

totalling 2,585 million tons

of coal has been identified

Largest producer of pulses

and oilseeds in the Country

(~75% of soyabean

production)

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)

Over 18,000 technical

graduates and 230,000

graduates add to workforce

each year

Over 144 BCM of coal bed

methane reserves available

Over 100 agricultural farms with

an area of over 20,000 acres is

available on lease to investor

India’s 1st operational

Greenfield SEZ at Indore

Favourable climatic

conditions for cotton

and over 40,000 power-

looms are driving the

textile industry

Availability of coal and natural gas

(G.A.I.L pipeline) along with support

from Government to make investment

in Thermal Power Plants lucrative

Offers diverse tourists destinations

catering to various segments of

tourism such as religious (Bhojpur),

eco/ adventure (Panchmari), heritage

(Sanchi, Khajuraho) tourism etc.

Madhya Pradesh: A Preferred Investment Destination

Various blocks available

for power, cement, iron

and steel units

*Source: www.mpsidc.org & Brochure: MP Means Business

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0%

20%

40%

60%

80%

100%Vishakapatnam

Chennai

Greater Noida

Chandigarh

Jaipur

Indore

0

50

100

150Mumbai

Delhi

Bangalore

Chennai

PuneHyderabad

Indore

Bhopal

Ahemadabad

Mumbai(780 Kms)

(MPV - 1000) Pune(800 Kms)

(MPV - 206.51)

Bangalore(1400 Kms)

(MPV - 254.52)

Chennai(1430 Kms)

(MPV - 362.84)

Hyderabad(840 Kms)

(MPV - 257.9)

Delhi(740 Kms)

(MPV - 789.5)

Ahmedabad(570 Kms)

(MPV - 220.63)

Kolkata(1350 Kms)

(MPV - 613.19)

Key Markets

(Distance From Bhopal)

MPV – Market Potential Value

Source: (Reference: RK Swamy)

MP: The Right Place with the Right Environment

MP is centrally located. The State is at an easy distance from

all the key consumer markets in the Country.

DESTINATION MADHYA PRADESH

- Distances rounded off**Source: India Today (September ‘06 Issue)

Fastest mover* in overall

performance among the

big States in the Country.

Fastest mover in agriculture

Fastest mover in

infrastructure development.

Ranks 2nd in terms of

governance.

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

* Fastest mover is the State where the rate of improvement between 2003 & 2006 was greater than that between 1991 & 2003

Bhopal and Indore have substantial cost

advantages, even when compared to other Tier

III and IV cities.

Savings in Office Space Rates

(A comparison of rates in Central Business Districts)

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.

(Estimated Values for Multi-product SEZs)

Savings in Land Cost

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Industrial Policy: Catalyst for the InvestmentsThe 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.

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

• 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 @ 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

SPECIAL INCENTIVES

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E Crystal IT Park Indore

Food ParksMandsaur, Khargone, Chhindwara, Hoshagabad, Mandla and Bhind

Stone Park Katni

Herbal Park Rewa

Granite Park Chhatarpur

Life Sciences Project Bhopal

Apparel Park Indore (SEZ)

Gems & Jewellery Park Indore

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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

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.

Total developed area

7,147 Hectares

Total allotted area3,089

Hectares

Total units established

1,360

Growth centres 19

Doing Business Made Easy Through MPAKVNIN

DO

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AK

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Major Groups:HEG, Crompton

Greaves, P&G, Godrej, Lupin, IFB,

Oswal, Nahar

Special Infrastructure: ICD, Food

Park




Major Groups: JK, Surya Roshini,

Godrej, Grasim, Cadbury, Hotline,

Crompton Greaves

Special Infrastructure: ICD, Food

Park

Area Developed: 273 Hectares



Major Groups: Birla, Jaypee

Special Infrastructure: Integrated

infrastructure development centres

(IIDC)

Area Developed: 790 Hectares



Major Groups: Raymond, Hindustan

Petroleum, PBM, Ayur

Special Infrastructure: Stone Park,

Food Park

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Pithampur, Kheda, Dewas, Maksi, Megh Nagar

Malanpur, Malanpur Phase II, Banmore, Chainpura, Siddhgawan, Pratappura

Rewa, Waidhan

Borgaon, Maneri, Purena

Mandideep, Pillukhedi,

Mandideep Phase II

Source: MPSIDC

Sector Profile

Roads

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Roads: Motoring Away

MP: Connecting India

MP: Offering Specific Incentives

Government Initiatives: MP Road Policy

MP: An Investment Destination

Way Forward

Connecting Further

Sector Profile: Roads

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• 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.

Roads - Motoring AwayIndian Road Network*

Indian road network of over 3.31 million Km. is second largest in the world and consists of :

Length (In Km)

Expressways 200

National Highways 66,590

State Highways 1,28,000

Major District Roads 4,70,000

Rural and Other Roads 26,50,000

Total Length 3.31 million km

(Approx)

Status of National Highways as on 31st July, 2006*

Single Lane/Intermediate Lane 32%

Double Lane 56%

Four or more Lanes 12%

*Source: National Highway Authority of India (www.nhai.org)

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• 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.

FROM TO DIST.

Bhopal Delhi 740 Km

Bhopal Mumbai 780 Km

Bhopal Chennai 1435 Km

Bhopal Bangalore 1400 Km

Bhopal Hyderabad 840 Km

Bhopal Kolkata 1350 Km

Bhopal Kandla 930 Km

Bhopal Ahmedabad 570 Km

MP: Connecting India

DISTANCES OF MAJOR CITIES FROM THE STATE CAPITAL*

Distances rounded offSource: NHAI (www.nhai.org)

ROAD MAP OF MP

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• 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.

FEATURES OF MP BOT SCHEME• 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.

MP: Offering Specific Incentives

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.

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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

1. 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.

2. 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

3. 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

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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

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.

MADHYA PRADESH ROAD POLICY

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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.

Distance Before At Present

Hoshangabad - Harda 100 km 8 hrs 2 hrs

Hoshangabad - Seoni 90 mins 45 mins

• 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.

Name of the Project Length (Kms) Project Cost (Mn USD)

Dewas – Ujjain - Badnawar 98.26 11.09

Hoshangabad – Piparia - Panchmarhi 126.00 12.66

Hoshangabad – Harda – Khandwa 185.00 18.00

Satna – Maihar – Umaria 141.00 11.84

Rewa – Amarkantak 246.00 24.72

Indore – Edelabad 203.00 27.56

Ujjain – Jhalawad 134.00 14.82

Jabalpur – Narsinghpur – Piparia 140.00 16.65

Raisen – Rahatgarh 101.40 12.82

SOME SUCCESSFULLY COMPLETED BOT PROJECTS

• 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.

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.

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B.O.T. PROJECTS (PROPOSED)

S.No Name of projectLength (kms)

Estimated cost (Mn USD)

1 Sehore – Dewas 142 ~103.00

2 Lebad – Nayagaon 250 ~184.00

3 Chandrapur – Badwani 100 ~12.50

4Matkuli – Tamia – Chindwada

108 ~21.00

5Mandsaur – Sitamau (up to Rajasthan Border)

44 ~5.60

NATIONAL HIGHWAY PROJECTS (PROPOSED)

S.No Name of projectLength (kms)

Estimated cost (Mn USD)

1 NH 75 (Km 0 to 85) 108 ~120.00

2 NH 7 (Km 544 to 652) 104 ~115.50

3NH 3 (Khalghat to Maharashtra Border)

88DPR IN

PROGRESS

4NH 12 (Bhopal – Deori – Jabalpur)

297DPR IN

PROGRESS

5NH 59 (Indore – Jhabua – Ahmedabad)

169

6NH 69 (O’ganj – Bhimbhekta)

13DPR IN

PROGRESS

7NH 75 (Jhansi to Khajuraho)

100

8NH 86 Ext (Bhopal to Sanchi)

40

ADB PHASE III (STATE HIGHWAY PROJECTS COMING UP)

S.No. Name of project SH no. Total length (kms)

1 Shivpuri – Sheopur – Pali 06 143.60

2 Kurwai – Chanderi – Pichoore 19 183.00

3 Bareli – Piparia 19 32.00

4 Damoh – Hata – Amanganj 49 112.00

5 Chhilpi – Baiihar – Balaghat 26 135.00

6 Khandwa – Khargone 26 87.00

7 Satna – Chitrakoot 11 74.00

8 Chiraidongri – Seoni 11A 97.00

9 Malhara – Amanganj 10 90.00

10Hoshangabad – Nasarrullaganj – Khategaon

22 90.00

11 Silvani – NH12 Junction 16 53.00

12 Banher – Bistan (Maharashtra) 31 25.00

13 Khargone – Mandleshwar – Mhow 01 119.00

14 Balaghat – Nainpur 11 75.00

15 Tala – Shahdol 10 85.00

16 Morena – Porsa 02 50.00

17 Indore – Ujjain 17 55.00

18 Shyampur – Goras 23 58.00

19 Dindori – Mandla – Lakhnadon 40 134.00

20 Katni – Barhi – Tala 10 60.00

21 Gairatganj – Gadarwra 44 85.00

22 Bela – Govindgarh – Churhat 52 63.50

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.

Way Forward…

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.

BO

T

Source: mprdc.nic.in

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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

Madhya Pradesh: Means Business

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