Funding river connectivity projects
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Large scale irrigation projects (or river connectivity projects) have low IRR. Govt is unable to raise huge quantum of equity out of its budget, and farmers have limited ability to pay for higher water availability. Yet govt is keen to complete these projects: firstly to fulfil its commitment to doubling farmers incomes by 2022, and secondly to uplift backward areas under its "Transformation of Aspirational Districts" initiative.
http://niti.gov.in/writereaddata/files/Presentaion-by-CEO-NITI-Aayog.pdf
Some progress
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Gadkari had earlier suggested borrowing unhedged in dollars against India's foreign exchange reserves. This sounded unrealistic. Plan seems to have evolved since then:
✴ Rs 8 lakh crore is the total requirement. Gadkari is seeking low-cost long-term funds from foreign investors -- currently, he is negotiating with investors from East Asia like S. Korea, Japan and Singapore.
✴ Gadkari says, "five proposals of Rs 3lakh crore are ready to tender. I shall be able to earn monies from developing 60,000 MW HE under the river connectivity project."
✴ "I have also reduced costs through using pipelines instead of canals, and will triple irrigation effort by promoting drip and sprinkler systems."
Other updates: 13 expressways are planned incl Rs 1lakh crore Delhi-Mumbai e-way. Funding will not be an issue. 50% of Bharatmala highway projects will be started soon & DPR of all others completed by 2018. 20B litres of biofuels can be made from waste crop residues.
Large scale irrigation projects (or river connectivity projects) have low IRR. Govt is unable to raise huge quantum of equity out of its budget, and farmers have limited ability to pay for higher water availability. Yet govt is keen to complete these projects: firstly to fulfil its commitment to doubling farmers incomes by 2022, and secondly to uplift backward areas under its "Transformation of Aspirational Districts" initiative.
http://niti.gov.in/writereaddata/files/Presentaion-by-CEO-NITI-Aayog.pdf
Some progress
Gadkari had earlier suggested borrowing unhedged in dollars against India's foreign exchange reserves. This sounded unrealistic. Plan seems to have evolved since then:
✴ Rs 8 lakh crore is the total requirement. Gadkari is seeking low-cost long-term funds from foreign investors -- currently, he is negotiating with investors from East Asia like S. Korea, Japan and Singapore.
✴ Gadkari says, "five proposals of Rs 3lakh crore are ready to tender. I shall be able to earn monies from developing 60,000 MW HE under the river connectivity project."
✴ "I have also reduced costs through using pipelines instead of canals, and will triple irrigation effort by promoting drip and sprinkler systems."
Other updates: 13 expressways are planned incl Rs 1lakh crore Delhi-Mumbai e-way. Funding will not be an issue. 50% of Bharatmala highway projects will be started soon & DPR of all others completed by 2018. 20B litres of biofuels can be made from waste crop residues.
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- Excellent interview as it covers all areas. Good level of scepticism by interviewer, is met with confident replies on roads, expressways, Ganga cleaning and waterways. Real Estate developers are entering the road building sector and giving good competition. Indebted established firms can now be bypassed and work contracts awarded in spates and without compromise. Land acquisition is the major hurdle (eg Mumbai-Goa, Bihar & Uttarakhand were mentioned. Gadkari said the same in UP investors meet— ie. Centre will do UP’s big projects if UP govt just acquires land on its behalf). Expressways around Delhi have taken off with more to come, eg Delhi-Meerut & Delhi-Shamli-Dehradun e-ways. Lucknow-Kanpur expressway should get started, as will Chennai-Salem and Chennai-Bengaluru in the South. Other e-ways have not yet made headway. Ganga cleaning seems to boil down to completing projects, all of which will be tendered by March 2018. This ensures 80% results as there will be other unresolved issues.
Ganga waterway will be disappointing if freight transport stops at Varanasi, and does not go up to Lucknow or Delhi (as 3m draft cannot be maintained). North-East waterways (Brahmaputra and Barak rivers) are very comprehensive in Assam, though these rely on waterways in Bangladesh to connect to the rest of Eastern India. Other projects were not spotlighted.
Starting of 5 interlinking projects will end the arduous process of gaining permissions, and starts projects that will define a legacy. Getting an agreement on South India river inter-linking will be a major achievement because it means they will have found a novel solution to a highly intractable problem. It almost guarantees fast implementation & excellent all-round benefits. However, AP is creating trouble (by insisting on the old failed approach) & Telangana will no doubt insist on Central funds for its over-sized irrigation projects before agreeing. It should be a no-brainer as relatively small amount of water will be taken from Godavari (which is anyway wasted) for TN & Karnataka—and there is no land acquisition required.
Another major achievement would be to collect crop waste and create farmers wealth (or rural growth) approaching Rs 2 lakh crore!! It will be even better if private sector is involved. It would be a great success if manufacturing of all components of electric vehicles is done in India, with Indian auto companies at the helm. Piecemeal growth of EV that depends on ambitions of cities & states and works very well in practice. After all, EV is for intra-city travel & institutional adoption by cities can’t be forced on reluctant authorities. There are quite a few willing states, eg Delhi, Maharashtra, AP, Gujarat.
Lastly, the toughest task is to dramatically improve road safety. The plan is getting torpedoed by states, eager to flaunt their autonomy and happy to keep the status quo. I can be wrong as proposals are very laudable and highly worthwhile given there are 1.5 lakh death on roads each year, and most are avoidable. Execution will not be easy due to complexity of work required, corruption factor and the need to change mindsets of habitual offenders.
Nitin Gadkari Interview: Budget and Beyond with Nitin GadkariREPLY 47w - Eastern Peripheral Expressway (E Delhi orbital e-way) is completed and ready to use. Western Peripheral Expressway (in W Delhi) is with a private contractor and due for completion by June 2018.
REPLY 45w - UP govt is well on its way to start work on the 341-km Poorvanchal Expressway from Lucknow to Ghazipur.
UP has spent Rs 6,100 crore from its own funds to buy 91% of the land required. It started to raise Rs 12,000 crore 15-yr funding for construction, from various external sources (3yrs construction + 12yrs repayment).
REPLY 45w - Bogibeel road-rail bridge will be completely finished before the end of 2018.
"While all the civil work would be completed by July this year, two more months would be needed to finish the electrical and signalling work on the 4.94 km bridge, said Mahender Singh, Chief Engineer, construction, Bogibeel project."
REPLY 45w - State govt will be building road, rail and air on priority to help tourists flows and also strengthen national security. It shares 260km border with Tibet.
Strategically important Rohtang Pass, 8.8-km horseshoe-shaped road tunnel was completed late 2017. Its opening will open route to cold deserts of Lahaul Valley (a potential tourist location). It will reduce travel times by 4 hrs or 45km.
A bigger airbase could be built close to the existing army base in Pathankot. Kangra airport (225km from capital) is considered ideal. CM has also asked M of Defence for funds to start the strategic 498-km Pathankot-Leh rail line. State wants it declared a national project and prioritised.
"I met the DM soon after assuming office. She assured that they will try to get construction started within a year," said CM Thakur. The survey is expected to be completed by 2019 after which the construction of the rail line is expected to start. But land and funds will be a challenge.
HP is facing a severe fiscal crunch. It desperately wants to improve revenue, via:
1. Develop new (virgin) tourist destinations: tourism is a money-spinner but popular tourist resorts like Shimla, Manali, Narkanda, Kasauli, Kalpa and Dharamsala are chock-a-block with the tourists.
2. Illegal mining was clamped down on following a tragedy. So efforts are being made to ignite safer mining by simplifying mining laws.
3. Horticulture
4. Hydroelectric power: concessions to power producers.
5. HP wants to collect its share of royalties from Punjab & Haryana, for completed HE projects re. Bhakra Beas Management Board (BBMB) hydro projects.
REPLY 45w
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