Five states to get priority in Centres infra spending

Written by Gireesh Chandra Prasad | Gireesh Chandra Prasad | New Delhi | Updated: Aug 1 2011, 05:52am hrs
New infrastructure projects in Gujarat, Andhra Pradesh, West Bengal, Tamil Nadu and Orissa are set to get a major push in the five years starting 2012 as various government agencies will be prioritising building of roads, rail networks, airports and sea ports in these states that are setting up mega petroleum and petrochemical investment regions.

Five massive regions meant to attract investments in the petrochemical and allied sectors are now at various stages of implementation at Dahej in Gujarat, Visakhapatnam-Kakinada in Andhra Pradesh, Haldia in West Bengal, Paradeep in Orissa and Cuddalore and Nagapattinam in Tamil Nadu. These investment zones, each of which is not less than 250 square kilometres, are expected to attract a collective investment of R8,63,664 crore and create more than 40 lakh jobs during the 12th Five-Year Plan.

The idea is to give a boost to the domestic manufacturing sector and to capitalise on the rising Asian demand for petrochemicals. It is the responsibility of the government to provide infrastructure connectivity to realise this ambitious plan.

We will get infrastructure build for these projects using various existing schemes through appropriate prioritization, K Jose Cyriac, department of chemicals and petrochemicals secretary, said. Government entities like the National Highways Authority of India, shipping ministry and the railways ministry would emphasise on fresh projects in these regions while allocating resources in the coming years. In the case of small connecting roads wherever required, the state governments concerned would include them in their own development plans.

The funds needed for providing infrastructure to the petroleum, chemicals, and petrochemicals investment regions (PCPIRs) may be a small fraction of the overall resources available to these agencies during the 12th Plan period starting 2012, during which, linkage among ports and existing road and rail network and enhancement in container capacity is proposed to be achieved.

The government has spent more than R1,21,374 crore on roads, transport, highways and railways during the ongoing 12th Five-Year Plan that comes to an end next year, according to the data available with the Planning Commission. The apex think tank has recommended that infrastructure spending be stepped up by an extra 0.7% of GDP in the next five years in order to target an economic growth of 9-9.5%.

Infrastructure projects for PCPIRs executed as public-private partnerships will get the central governments viability gap funding (VGF) as well, said Cyriac. VGF of 20% of the project cost, which could go by another 20% in some cases, helps in making economically essential projects commercially viable in addition to bringing private sector efficiency.