Finance minister Pranab Mukherjee has agreed to provide R17,500 crore for the Delhi Mumbai Industrial Corridor (DMIC), in what could pave way for the Cabinet approval for the ambitious project that envisages creation of seven new cities along the corridor with a total investment of $90 billion.
The plan is to set up industrial and infrastructure projects along the 1,483 km-long corridor linking New Delhi and Mumbai. With Mukherjee?s nod, the cabinet committee on infrastructure will consider the proposal shortly, official sources told FE.
The project encompasses six states ? National Capital Region of Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat and Maharashtra. The government will invest R2,500 crore each in the seven cities to be developed.
The project will be monitored and implemented by the Delhi Mumbai Industrial Corridor Development Corporation. Currently, Infrastructure Leasing & Financial Services (IL&FS) owns 41% in the firm and Infrastructure Development Finance Company (IDFC) 10%.
The remaining 49% is owned by the government. Since IL&FS and IDFC are interested in the downstream projects, they are reportedly keen to exit the monitoring body to avoid any conflict of interest. The government is in talks with the two companies to buy them out and convert the corporation into a wholly-owned government subsidiary. The firm will coordinate project development, financing and implementation and will be headed by a full-time CMD. It will have representation from the central government, state governments and financial institutions. Several Indian and Japanese companies are likely to sign joint venture pacts. An official from finance ministry said: ?Mitsubishi, Hitachi, Toshiba and JVC have already been roped in for the project.?
The funds for the project will come from the Indian government, Japanese depository receipts issued by Indian companies, Japanese loans and investment by Japanese firms. A large part of the funds will come from the Japan International Cooperation Agency (JICA). An official said: ?Work on issues like land acquisition and other clearances is going on smoothly in most states expect Uttar Pradesh.?
This project incorporates nine mega Industrial zones of about 200-250 sq km, high-speed freight line, three ports and six airports, a six-lane intersection-free expressway and a 4,000 MW power plant. Several industrial estates and clusters, industrial hubs, with top-of-the-line infrastructure will be developed along this corridor to attract more foreign investment. The project will include both PPP viable and non-viable projects. According to official estimates, over 180 million people, almost 15% of the country?s population, will be impacted by the corridor. The project will be implemented in two phases. The first phase of the project will be completed by 2018.
