Mining, water, agri business, metals and tourism new focus areas for state after reforms in power, roads with help of WB funds

When Orissa’s tryst with the World Bank began in the Nineties, it desperately needed the funds. For the international agency, Orissa promised to be an exciting role model?a poor state transformed with its benevolence. The engagement continues even today. So when World Bank president Robert Zoellick visited Orissa on Thursday, interspersed with the boat rides and temple visits was a promise to forge partnerships in new areas, while expanding the possibility of what already is on the ground.

After all, a stellar beginning was made when the state grabbed the bank’s offer of loans to usher in reforms in the power sector in the early Nineties. It was not because of the state?s penchant for reforms, but a compulsion. The power sector in Orissa was almost short-circuited. Generation was low, T&D losses were as high as 60%, and no one was willing to lend money to the state government. Then chief minister Biju Patnaik had no option but to take up the World Bank?s offer.

The $415 million power sector reform programme was a pioneering effort to unbundle the Orissa State Electricity Board (OSEB) and ultimately privatise the distribution companies. In fact, the nation learnt from the Orissa experience while ushering in power sector reforms in the rest of the country.

After this success, the World Bank is now supporting four projects in the state?National Hydrology Project, Orissa State Road Project, Orissa Community Tank Management Project, and Targeted Rural Initiatives for Poverty Termination Infrastructure (Tripti) or Orissa Rural Livelihood Project. While the total investments in these projects would be $600 million, the World Bank is chipping in with $392.66 million as soft loan.

Happy with Tripti’s success, aimed at elevating the socio-economic status of the poor in 10 districts of the state, Zoellick promised to extend it to the remaining 20 districts of the state. On his way to Bhitarkanika, he also met some beneficiaries of the project and bought handicraft items.

?I was impressed to meet people in the communities who are learning new skills to begin new livelihood activities that can support conservation efforts,? said Zoellick. ?What is remarkable is that despite the challenges they face, they have enthusiastically embraced the conservation efforts by participating in eco-development committees, where they receive training and incentives,? he said.

In a meeting with chief minister Navin Patnaik, new areas like mining sector reforms, urban water and water management were identified, where the bank would support the Orissa government.

The WB through its private arm IFC would leverage private investment in PPP projects in agri business, downstream metal manufacturing, tourism and also small and medium-scale companies. The chief minister also requested the WB chief to resume funding for the Orissa State Road Project, which has been suspended since July 2011. The World Bank was unhappy, as the civil works were not ?with due regard to quality, safety and environment safeguard?. Moreover, it wanted that the project should be executed with ? adequate contract management through application of appropriate legal/contractual remedies?.

Zoellick assured Patnaik of the bank’s support in the areas identified, besides resuming funding for the road project if the state takes adequate steps to remove the impediments.

The $281.17 million project aims to widen and strengthen three major state roads?Bhawanipatna-Khariar road (68 km), Bhadrak-Chandbali road (95km), and Berhampur-Taptapani road (41 km). State finance minister Prafulla Chandra Ghadei, however, is quite hopeful that the project would be revived soon, adding that the state government has completed a few actions to bring the project back on track.