The Times Of India, 25 June 2014, New Delhi: Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) is seeking Rs 7,500 crore for three smart city projects, an ambitious experiment, which is expected to get a boost from the Narendra Modi government as it embarks on revamping infrastructure projects in the country.
The demand for funds in the Budget is expected to be discussed on Wednesday, when the DMIC Trust meets, amid concerns from the finance ministry about the slow implementation of the project and questions over some of the agreements signed by the company executing the massive project that entails setting up of seven greenfield smart cities between Delhi and Mumbai. The investment in the project is estimated at over $100 billion, with the Japanese government agencies providing cheap financial support, while the Centre and the states will chip in with equity and land.
Sources said the equity will be used for the special purpose vehicle in Dholera in Gujarat, where a new city is planned, and a similar project in Shendra, 17 km from Aurangabad, in Maharashtra.
DMICDC had sought the Rs 7,500 crore funding when the interim Budget was presented but the finance ministry turned down the plea, arguing that it can’t be raising funds from the market when the projects are not ready. “The government can’t be borrowing at 9% and let someone sit idle with that cash,” said a senior finance ministry official.
The company, however, countered it by saying that the Centre needs to chip in with equity since the states had already provided their share by way of land. “The projects are ready but they are getting delayed because the Centre is yet to provide its share of capital. This equity will be leveraged to raise debt and set up the projects,” said an official, who did not wish to be identified.
Officials also said that the finance ministry had been raising unnecessary concerns over projects that had been cleared by it earlier. In the 2014-15 interim Budget, the government had provided about Rs 650 crore for implementation of the project.
Mega infrastructure projects, such as the DMIC, are expected to get a push from the Modi administration, which has vowed to shore up the creaky infrastructure in the country and has promised to build 100 new cities. The government is expected to fast-track the DMIC and other industrial corridor projects as it aims to boost manufacturing and attract investments in the infrastructure sector. The Modi government is also expected to ensure that contracts are rolled out swiftly and will keep a close eye on project implementation.