Infrastruction Project Report

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Infrastructure & Economic Development in Odisha
CHAPTER-1
INFRASTACTURE & ECONOMIC DEVELOPMENT
IN ODISHA
INTRODUCTION:-
Odisha boasts three of the major ports in India i.e. Paradip Port, Dhamra Port and
Gopalpur. The government of India has selected the coastal region of Odisha,
stretching from Paradip in the north to Gopalpur in the south, to be developed as
one of the five or six Special Economic Regions (SERs) of the country. The
government of India and the state government of Odisha would work together to
erect world class infrastructure in this region along the lines of the Rotterdam,
Houston, and Pudong regions. This would stimulate further private investment in
petrochemicals, steel, and manufacturing.
A recent Morgan Stanley report forecasts that Odisha would be flooded with
massive investments for manufacturing related activities in the same manner that
Bangalore had attracted software investment in the 1990s. The scale of the
investments in Odisha would, however be much higher. As of July 2006, the total
planned investment in the state is a whopping $90 billion. This includes some
S.C.S (A) College, Puri

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investment in research, education, hospitals, roads, ports, airports, and hotels.
There are many multi-state irrigation projects in development, including Godavari
River Basin Irrigation Projects.
The Government of Odisha have set up a Trust namely "Odisha Rural & Urban
Infrastructure Development Fund (OUIDF)" in the Housing & Urban Development
for the purpose of developing and financing Infrastructure Projects under taken by
Urban Local Bodies, Statutory Bodies, Public Sector Undertakings and Private
Investors and attract inter alia, investments, professional advice from institutions
for financing Infrastructure Projects.
In order to meet its goal of maintaining the current growth rates with out
jeoparadising the environment and its natural resources, Odisha requires an
adequate expansion of its Urban Infrastructure particularly in the areas of Water
Supply, Sanitaion and Waste Management. Financing the required Urban
Infrastructure continues to post challange for the Urban Local Bodies (ULBs).
Thus comprehensive reform linked " Project Developemnt" and " Urban
Finanicing Institutional Framework" to support mobiliosation of external financing
and private sector investment are considered appropriate relevant and timely.
With the above backdrop Govt. of Odisha decided to avail a loan from KfW,
German Developemnt Bank to implement a Project for 58 million euro for the
year, 52.5 million euro as loan and grant from KfW with 5.5. million euro as equity
contribution by the Govt. of Odisha. Accordingly the following documents were
executed by Govt. of Odisha with KfW, Germany on 2nd August 2012 detailing
the guideline of Loan Fund, Grant Fund and Project Development Fund.
PROGRESS IN INDIA ECONOMIC DEVLOPMENT BY ODISHA

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Indias rise in recent years is a most prominent development in the world
economy. India has re-emerged as one of the fastest growing economies in the
world. Indias growth, particularly in manufacturing and services, has boosted the
sentiments, both within country and abroad. With an upsurge in investment and
robust macroeconomic fundamentals, the future outlook for India is distinctly
upbeat. According to many commentators, India could unleash its full potentials,
provided it improves the infrastructure facilities, which are at present not sufficient
to meet the growing demand of the economy. Failing to improve the countrys
infrastructure will slow down Indias growth process.
Therefore, Indian governments first priority is rising to the challenge of

maintaining and managing high growth through investment in infrastructure sector,
among others. The provision of quality and efficient infrastructure services is
essential to realize the full potential of the growth impulses surging through the
economy. India, while stepping up public investment in infrastructure, has been
actively engaged in involving private sector to meet the growing demand.

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The demand for infrastructure investment during the 11th Five Year Plan
(2007-2011) has been estimated to be US$ 492.5 billion (Planning Commission,
2007). To meet this growing demand, Government of India has planned to raise the
investment in infrastructure from the present 4.7 percent of GDP to around 7.5 to 8
percent of GDP in the 11th Five Year Plan. In general, efforts towards
infrastructure development is continued to focus on the key areas of physical and
social infrastructure. The present paper is a shorter version of the India country
report carried out by the author on-behalf of RIS for ERIA. This version presents a
quick profile and prospects of Indias physical infrastructure sector.
Objectives of study:-
After studying this Unit, you should be able to:

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Show the linkage between physical infrastructure and development;
Substantiate the role of different stakeholders in providing physical
infrastructure;
Analyses the issues arising out of massive infrastructure development; (eg
social/human development vs. infrastructure development;
Estimate the importance of PPP in infrastructure development; and To give

financial and other assistance to Urban Local Bodies, Statutory Boards and
Departments, Public Sector Undertakings and Private Investors or setting up
infrastructure projects in the State of Odisha as per the guidelines issued by the
Trust. The ultimate goal of the trust is to become financially self-sustainable
and facilitate debt financing of Urban Infrastructure Projects in Odisha in a
Non-guaranteed mode.
To guarantee the performance of any contract or obligations and the payment or

money or dividends and interest on any stocks, shares or securities of any
company, corporation, firms or person in any case in which such guarantee may
be considered directly or indirectly to further the main objects of the Trust.\To
invest any money of the Trust not immediately required, in any investment as
may be thought proper and as may be necessary.
To do all other things necessary and conducive to the attainment of all these
objectives.
Methodology:-

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With the advent of both cloud and on-premises infrastructure solutions, we
recognize that the landscape can be tricky. We work with you to develop an
infrastructure solution that meets your needs, and we have developed a
methodology that allows us to deploy a solution that not only works today but
provides the necessary documentation to help you expand for the infrastructure of
tomorrow as well. It starts with proper discovery. We meet with your infrastructure
team to gather all the information we can about your current environment. We talk
through needs and review the options out there today. An architecture design
document is crafted by our team with all the details from the discovery
process. This document includes the current landscape of your environment, along
with a migration or upgrade plan that maps the rest of the process our team will use
to get you from point A to point B. Any necessary software, hardware, and
configuration needs are included along with a rough timeline so that you can plan
accordingly.
SCOPE OF THE STUDY:-
This research work focuses on the role infrastructures such as economic and
social infrastructures have played in the promotion of Small and Medium Scale
Enterprises (SMEs) in Nigeria paying special attention to the impact the
government of Nigeria has on the development of Small and Medium Scale
Enterprises. The research intends to study the essential problems encountered by
Small and Medium Scale Enterprises and suggest ways by which they can be
adequately and efficiently promoted. Most of the information and data needed for
the study would be gathered from existing literature and from some selected
business owners in FCT Abuja.
LIMITATION OF THE STUDY:-

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Limitations faced in the course of the research were accessibility to
information, difficulty in accessing the target sample during working hours due to
the busy nature of their operations, inability to use a large sample size due to time
and resource constraints, unwillingness of small business owners to pour out their
grievances for fear of victimization if found out.
CHAPTER -2
About of Infrastructure & Economic
Development in Odisha
INFRASTRUCTURE:-

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Economy of Odisha has remarkable agricultural as well as industrial
production within India. Odisha is the first state in the country formed on
linguistic basis in 1936 having rich heritage in art and culture and gifted with
abundant natural resources. Odisha is one of India's leading Information
Technology, Industrial, Education, Healthcare destination. Odisha's industry is
mineral based and mineral contribution in its value is highest in the country.
This state is a highest producer of aluminum in India. Important minerals in
Odisha are iron ore, coal, bauxite, chromite, manganese and graphite. Odisha
made an impressive real growth rate of 8.09% in 2012-13. Odisha made a
growth rate of 11.01% in agricultural sector,
According to World Bank Infrastructure is an important part of

development providing and delivering basic services that people need for
everyday life e.g. safe drinking water, electricity, roads, sanitation etc.
RBI has provided a composite definition on Infrastructure lending not simply
on infrastructure alone. As per RBI any credit facility in whatever form
extended by lenders, banks, Financial Institutions or Non banking Finance
Companies to an infrastructure facility as stated below falls within definition of
Infrastructure lending. In other words, a credit facility provided to a borrower
engaged in:

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1. Developing, or
2. Operating & Maintaining, or
3. Developing, operating and maintaining any infrastructure facility that
is a project in any of following sectors, or any infrastructure facility of
similar nature.
a. A road, including toll road, a bridge or a rail system
b. A highway project including other activities being an integral part of
highway project.
c. A port, airport, inland waterway or inland port.
d. A water supply project, irrigation project, water treatment system,
sanitation and sewerage system or solid waste management system.
e. Telecommunication services whether basic or cellular, including
radio paging, domestic satellite service, network of turning,
broadband network and internet services.
f. An industrial park or SEZ.
g. Generation or generation or distribution of power
h. Transmission or distribution of power by laying a network of new
transmission or distribution lines.
i. Construction relating to projects involving agro-processing and
supply of inputs to agriculture.
j. Construction for preservation and storage of processed agro products,
perishable goods such as fruits, vegetables and flowers including
testing facilities for quality.
k. Construction of educational institutions and hospitals.
l. Any other infrastructural facility of similar nature.
ODISHA INFRASTRUCTURE MARKET:-

Odisha Infrastructure development now is exceptionally well in industrial
growth among other states in India. Odisha's industries are mostly mineral
based and retain 10 percent of total capacities of the nation. Odisha is the most
favored foreign direct investment destination in India. Odisha has abundant
natural resources and a large coastline. It contains a fifth of India's coal, a

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quarter of its iron ore, a third of its bauxite reserves and most of the chromite.
Rourkela Steel Plant[1] was the first integrated steel plant in the Public Sector in
India. It receives unprecedented investments in steel, aluminium, power,
refineries and ports. India's topmost IT consulting firms, including Satyam
Computer Services, TCS (Tata Consultancy Services), Mindtree,
PricewaterhouseCoopers and Infosys have large branches in Odisha. IBM,
Cognizant, Bosch and Wipro are setting up development centers in Odisha. So
far, two of the S&P CNX 500 conglomerates have corporate offices in Odisha,
for example, National Aluminium (2005 gross income Rs.51,162 million) and
Tata Sponge Iron (2005 gross income Rs.2,044 million).
Odisha is notable as one of the first Indian states to have tackled its
structural problems during the post-1994 Indian economic reforms. Odisha was
the first state in India to begin to privatise its electricity transmission and
distribution businesses. Over the period between 1994 and 2000 Odisha's
former state electricity board (SEB) was restructured to form Gridco. This
corporation was then divided into Transco and a collection of distribution
companies. Attempts were then made to sell the distribution companies to the

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private sector. Like many other states, in 1996 Odisha was losing over 50% of
the electricity it was delivered. The scale and importance of these reforms is
notable and an important milestone in India's dramatic economic development.
Infrastructure spend in Odisha is estimated to be Rs. 20.3 tn (USD 430
bn) during the current 5 year plan. Power, roads, Telecom & railways to
witness maximum spend.
TYPES OF INFRASTRUCTURE:-
Broadly infrastructure is classified as
1. Physical Infrastructure which generally covers the following
a. Transportation including urban mass transportation: Roadways,
Railways, Airways and water supply and transportation etc
b. Power generation, transmission and distribution
c. Telecommunication
d. Port handling facilities
e. Solid waste collection and disposal facilities
f. Irrigation facilities
SEZ has a different characteristic in as much as it contains all the ingredients
of a physical infrastructure while being otherwise considerably led by Real
Estate Intervention.
1. Social Infrastructure generally covers following
a. Education.

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b. Primary Mass education facilities.
c. Medical.
d. Sanitation and sewerage.
e. Legal and general administrative framework.
IMPORTANCE OF INFRASTRUCTURE:-
World Bank has observed that greater focus needs to be placed on QUALITY
NOT QUANTITY of Infrastructure services. It is important from mainly
following perspective.
1. As a key driver for all round growth with enhancement in the efficiency
level.
2. Most infrastructure utilities e.g. Education, Supply of clean drinking
water, health, Sanitation etc touch the population at all levels
3. Up keeping of environment for safe living
4. Poverty alleviation as a consequence of overall development of
productive sectors
5. Easy and cost efficient access to markets both for inputs and outputs is
possible out of infrastructure developments.
6. The availability of adequate infrastructure is imperative for the overall
economic development of the country. Infrastructure adequacy helps
determine success in diversifying production, expanding trade, coping
with population growth, reducing poverty and improving environmental
conditions.
POLICY FRAMEWORK:-
11th Five Year Plan
A. Investment targeted in 11th five year plan: Rs. 20 lakh crore in the
infrastructure sector
Power Rs. 6.6 lakh crore,
Roads Rs.3.1 lakh crore,
Telecom : Rs.2.5 lakh crore

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Ports, Airports, Oil& Gas Pipelines, etc. : Rs. 7.3 lakh crore
B. Private sector participation envisaged at Rs. 6.2 lakh crore at inception.
Investment of private sector currently envisaged is Rs. 7.4 lakh crore.
12th Five Year Plan:-

A. Investment in Infrastructure sector constitutes about 5% of the GDP in 11th
Plan; expected to be increased to ~10% in 12th Plan.
B. Investment in Infrastructure sector targeted at Rs. 41 lakh crore in the 12th
Five Year Plan 1. 30% investment envisaged through PPP.
C. Assuming Debt: equity ratio of 70:30, equity requirement would be Rs. 0.7
lakh crore per annum and debt requirement of Rs.1.7 lakh crore.
Availability of Bank credit:-
A. Growth in infrastructure sector lending by Rs.1.5 lakh crore for the 12
months ended November 2010 (a 45% growth in 1 year period).
B. Exposure to infrastructure sector currently at Rs.4.8 lakh crore
C. Incremental funding availed during this period by:
Power: Rs.78,000 crore (53% of incremental sector lending);
Telecom: Rs.47,000 crore (32% of incremental sector lending);
Roads: Rs.17,000 crore2 (11% of incremental sector lending);
Ports, Airports, Oil& Gas Pipelines, etc: Rs.6,300 crore (4% of
incremental sector lending).
D. Banks Infrastructure sector exposure at ~14% of the total outstanding bank
credit of Rs. 33.70 lakh crore (as on November 19, 2010).
Power: Rs.2.4 lakh crore (7% of outstanding bank credit);
Telecom: Rs. 0.98 lakh crore (3% of outstanding bank credit);
Roads: Rs.0.82 lakh crore 3 (2% of outstanding bank credit);

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Ports, Airports, Oil& Gas Pipelines, etc: Rs.0.62 lakh crore (2% of
outstanding bank credit).
Issues and remedies in financing of Infrastructure Projects:

Implementation hurdles:-
A. Land acquisition & Clearances: To develop a policy framework to
handover land along with clearances to reduce delays.
B. Termination payments are based on the authoritys project cost estimates,
and give out a lower termination payments as compared to actual project cost,
which is generally higher in the range of 20-40%.
C. Perceived as a huge risk by stakeholders.
Funding from Odisha Banks:
A. Banks have internal sect oral ceilings at 12-15% of gross advances for each
sector.
Policy to classify infrastructure as a priority sector and stipulate a
specific percentage of a banks total lending to be in the infrastructure
sector.
B. ALM mismatch: Banks have a typical liability profile of 3-5 years whereas
infrastructure financing is required for 10-15 years and beyond.
Further incentivize deposit mobilization beyond 10 years through tax
incentives - interest income on FDs to be tax free.
Spread reset and put call option being done to circumvent the mismatch
issue.
BENEFITS:-
TO PRIVATE SECTOR

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1. Scope for reasonable return on opportunities arising out of funding gap
of investment which government may not be in a position to meet out of
fiscal resources
2. Tax concessions
3. Participation in market competition in areas which were monopolized by
government
4. Embedded Option
With a view to ensuring smooth implementation and continuation of
infrastructural projects involving Private sector participation a provision of
Embedded Option in the contract is often made. Such option includes:
a. Government`s optin ot legislate
b. Such guarantees may also cover
i. Minimum revenue stream
ii. Anti competition adventure
iii. Restriction of pricing of services for a specific period
To Public Sector
1. Increasing efficiency in execution of projects.
2. Enhancing implementation capacity.
3. Reducing risk for the public sector.
4. Mobilizing financial resources.
5. Freeing scarce public funds for other uses.
TYPES OF INFRASTRUCTURAL FINANCE AVAILABLE:-
In case of infrastructure projects the guidelines issued by RBI permit banks

extending following types of financial assistance
Fund Based
a. Term loan
b. Cash credit
c. Unsecured overdraft

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d. Bills purchase/bills discounting facilities
2. Non Fund Based
a. Term bank guarantee.
b. Short term bank guarantee for procurement of raw materials.
c. Short term bank guarantee for obtaining unsecured loan from others.
d. Letter of credit facility.
CHARACTERISTICS OF INFRASTRUCTURE
FINANCE:-
Infrastructure projects differ in some very significant ways from
manufacturing projects and expansion and modernization projects undertaken
by companies.
Longer Maturity
Infrastructure finance tends to have maturities between 5 years to 40 years.
This reflects both the length of the construction period and the life of the
underlying asset that is created. A hydro-electric power project for example
may take as long as 5 years to construct but once constructed could have a life
of as long as 100 years, or longer.
Larger Amounts
While there could be several exceptions to this rule, a meaningful sized
infrastructure project could cost a great deal of money. For example a
kilometer of road or a mega-watt of power could cost as much as US$ 1.0 mn
and consequently amounts of US$ 200.0 to US$ 250.0 mn (Rs.9.00 bn to
Rs.12.00 bn) could be required per project.
Higher Risk
Since large amounts are typically invested for long periods of time it is
not surprising that the underlying risks are also quite high. The risks arise from

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a variety of factors including demand uncertainty, environmental surprises,
technological obsolescence (in some industries such as telecommunications)
and very importantly, political and policy related uncertainties.
Fixed and Low (but positive) Real Returns
Given the importance of these investments and the cascading effect
higher pricing here could have on the rest of the economy, annual returns here
are often near zero in real terms.16 However, once again as in the case of
demand, while real returns could be near zero they are unlikely to be negative
for extended periods of time (which need not be the case for manufactured
goods). Returns here need to be measured in real terms because often the
revenue streams of the project are a function of the underlying rate of returns.

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CHAPTER-3
Various Infrastructures in Odisha
Infrastructure is a broad concept linked to every facet of the economy and
human life. The term infrastructure has been used since 1927 to refer collectively
to the roads, bridges, rail lines and similar public works that are required for an
industrial economy to function. Transportation, communication, sewage, water and
electric systems are all a part of infrastructure. These systems tend to be high-cost
investments. In general, infrastructure is location-specific and cannot be moved
from place to place. However, the term infrastructure is also used to refer to the
basic architecture of any system; mechanical, social, political or cultural. The
expanded definition of infrastructure includes transport (e.g. roads, railways, ports
and airports), public utilities (e.g. electricity and water supply), public services
(e.g. fire service, flood protection, police), national services (e.g. the defense,
monetary and postal systems and the legal and regulatory system) along with
soft infrastructure, which denotes institutions that maintain the health and
cultural standards of the population (e.g. public education, health and social
welfare).
Roads :-
Odisha Roads are a measure to the development of a region and form the very
essence of economic and social development. KMC Constructions has primarily
been into the development of roads and has successfully executed the completion
of major highways, expressways, airport runways, and roads across towns, cities,
factories and many such other areas. KMC Constructions has been one of the chief
contractors of NHAI and has undertaken projects worth hundreds of Crores even in
the most recent years.

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The Odisha government today said its focus would be on development of road,
power and railway infrastructure under public-private partnership (PPP) mode. The
decision in this regard was taken at a meeting of the Governing Body of Odisha
PPP Technical Society chaired by Planning and Coordination Minister Maheswar
Mohanty. Stating that PPP initiatives of the state government has achieved success
with at least 12 projects made operational and 54 others in the pipeline, Mohanty
said the focus now would be on roads, power and railway infrastructure. "Different
special funds have been created to achieve this target. These funds are Odisha
Infrastructure Project development Fund, Odisha Viability Gap Fund, Project
Development and Facility Fund for Road Sector and Odisha Urban Infrastructure
Development Fund," the minister said.
About Rs 98 crore has been put in these funds for undertaking different
technical studies, matching support to central viability gap funding, engagement of
transaction advisors, conducting feasibility studies and activities, he said. An
Empowered Committee under the chairmanship of the Chief Secretary has been
constituted to sanction the projects entailing investment up to Rs 500 crore. The

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projects entailing investment above Rs 500 crore would be considered by High
Level Authority Chaired by the minister.
Works Department is headed by the Engineer-in-Chief-cum-Secretary to

Government. Besides there are 2 Additional Secretary, 1 F.A.-cum-Additional
Secretary, 2 Under Secretary and 1 A.F.A.-cum-Under Secretary. The field
formation of Works Department has 1 Engineer-in-Chief (Civil), 7 Chief
Engineers[C.E., DPI & Roads, CE, Buildings, C.E.NH, CE, World Bank Project &
CE. RD & QP, C.E Directorate of Designs, Chief Engineer-cum-Chief Manager,
Technical State Procurement Cell] and 1 Chief Architect at Heads of Department
level. There are 12 (R&B) Circles, 3 N.H. Circles, 1 Mechanical Circle and 1
Electrical Circle and 1 P.H. Circle in charge of Superintending Engineers, who are
responsible to the concerned Chief Engineers for the administration and general
professional controls of the public works in charge of officers of the Department
within their Circles.
Rural connectivity is one of the key factors for the socio-economic development of
the State. One of the major activities of the Rural Development Department is
construction and improvement of rural roads. The Department has been entrusted
with the responsibility of maintaining 27,901 km. of rural roads. Besides, there are
784 major bridges under this Department.
Buildings
Rural & Urban Development Department is entrusted with construction and
maintenance of Government buildings located in rural areas. The RW Organization
maintains 12,48,133 square meter plinth area of 12002 residential buildings and
36, 21,788 square meter (plinth area) of 15827 Non-Residential buildings.

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Department is also executing building projects under Deposit Scheme out of
NRHM funds for Health & Family Welfare Department.
Odisha Railway zone

The East Coast Railway (ECoR) is one of the sixteen railway zones of
Indian Railways. It came into existence on 1 April 2003. As the name suggests,
most of the railway routes of the zone are near the east coast of India.
Consequent upon the parliaments approval, East Coast Railway was first out of
the seven new zones to be inaugurated by the then Honble Prime Minister of India
Sri H.H. Devegowda on 08.08.1996. The Officer-on-Special Duty took over charge
of the newly declared Zone on 16 September 1996. Initially, only one division
namely Khurda Road was attached to this railway. Subsequently the zone became
fully operational with effect from 01.04.2003.
East Coast Railway was first of the seven new zones inaugurated on 8 August
1996. Initially, only one division, Khurda Road, was attached to this railway. The
zone became fully operational with effect from 1 April 2003 with three divisions

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Khurda Road, Visakhapatnam, and Sambalpur. The headquarters building of
zone was constructed by CMM Infraprojects Ltd of Indore in 2009.
DIVISIONS
The geographical jurisdiction of East Coast Railway zone extends over three states
encompassing almost all of Odisha along with parts of Srikakulam, Vizainagaram
and Visakhapatnam districts of northeastern Andhra Pradesh and Bastar and
Dantewada districts of Chhatisgarh state. The zonal headquarters is at
Bhubaneswar in Odisha. The zone has three divisions: Sambalpur, Khurda Road
and Waltair.
ELECTRIFICATION
The East Coast Railway line integrated with the commissioned Howrah-Chennai
electrified trunk route on 29 November 2005. There was a missing link between
Kharagpur and Visakhapatnam stations and all trains from Howrah towards
Chennai side had to undergo a locomotive change from electric to diesel at
Kharagpur and vice versa at Visakhapatnam in order to pass through Odisha. Even
trains from New Delhi such as the Bhubaneswar Rajdhani had to undergo the
change at Kharagpur. This frequent loco change on a trunk route became a time
consuming & inconvenient process. With electrification along the 765km
Kharagpur-Visakhapatnam stretch, trains got speeded up and the need for double
headed diesels for high speed express trains was eliminated thus saving on diesel
consumption and a cleaner travel. Additionally the line branching off Khurda road
towards Puri was also electrified. As of now, Cuttack-Paradeep and branch line
from Jakhapura towards Barbil are electrified too.

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MAJOR RAILWAY STATIONS

The major railway stations in the entire zone are Visakhapatnam, Vizianagaram,
Sambalpur, Khurda Road, Puri, Bhubaneswar,Jajpur Road,Balasore, Bhadrak,
Berhampur, Cuttack, Rayagada, Koraput, Titlagarh. Most of the major stations fall
in the state of Odisha. Visakhapatnam will be delinked from EcoR once Centre
announces new railway zone for Andhra Pradesh and Its in the contention to
become headquarters of the new zone.
Civil Aviation:-
Odisha boasts three of the major ports in India i.e. Paradip Port, Dhamra
Port and Gopalpur. The government of India has selected the coastal region of
Odisha, stretching from Paradip in the north to Gopalpur in the south, to be
developed as one of the five or six Special Economic Regions (SERs) of the
country. The government of India and the state government of Odisha would work
together to erect world class infrastructure in this region along the lines of the
Rotterdam, Houston, and Pudong regions. This would stimulate further private
investment in petrochemicals, steel, and manufacturing. A recent Morgan Stanley
report forecasts that Odisha would be flooded with massive investments for
manufacturing related activities in the same manner that Bangalore had attracted
software investment in the 1990s. The scale of the investments in Odisha would,
however be much higher. As of July 2006, the total planned investment in the state
is a whopping $90 billion. This includes some investment in research, education,
hospitals, roads, ports, airports, and hotels. There are many multi-state irrigation
projects in development, including Godavari River Basin Irrigation Projects.
The Committee on Infrastructure has approved the report of

the task force for the development of 35 non-metro airports.

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Development of airports in Indias North Eastern Region (NER) will
be taken up by AAI on a priority basis. Through an Act of
Parliament, Airport Economic Regulatory Authority (AERA) is
proposed to be set up to fix, review and approve tariff structure
for the aeronautical services and monitor pre-set performance
standards at Indian airports. The Authority will ensure a level
playing field for all categories of airport operators and also
oversee and deal with natural monopoly and common user/
carrier segments of airports. Government has adopted an overall
liberal approach in the matter of grant of traffic rights under
bilateral agreements with various foreign countries. A revised air
services agreement was signed with USA that led to increased co-
operation in the aviation sector. Under this agreement, both sides
can designate any number of services to any point in the territory
of the other country with full intermediate and beyond traffic
rights. Similarly, traffic rights were enhanced with 19 other
countries Australia, Belgium, Canada, China, Egypt, France,
Germany, Italy, Japan, Kuwait, Mauritius, the Netherlands, New
Zealand, Oman, Scandinavian countries, Singapore, Spain, UAE
(Sarah), UK to provide for more flights and better connectivity
with these countries and also more commercial opportunity to all
operating carriers.
The signing of a new Air Services Agreement is the first
milestone for the purpose of establishing air connectivity with
new destinations. During the recent past, a number of new Air
Services Agreements were initialed (signed) based on modern

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practices in the civil aviation sector. Air Services Agreement with
some countries were signed a long time ago and needed updating
in view of the changed circumstances and developments in the
international civil aviation scenario, and with respect to newer
standards and recommended practices. Some of these countries
are Australia, Brazil, Finland, Iceland, New Zealand, Qatar, Tunisia,
UK and USA. The tourist charter guidelines were significantly
liberalized in 2004.
All airports in the country were opened for international
tourist charters flights and Indian passport holders were also
allowed to travel on the tourist charter flights. Recently,
Government has decided to liberalise the tourist charter
guidelines further. A major fleet acquisition is underway by the
national carriers, namely Indian Airlines, Air India and Air India
Charters Limited. The project of Indian Airlines for acquisition of
43 Airbus aircraft has been approved by the Government.
Ports :
Odisha is in the process of upgrading several airstrips in different districts. The

government has conducted a feasibility study and is in consultation with aircraft
operators to fly to these airstrips to ferry tourists and entrepreneurs. A senior
official told IANS that connecting Bhubaneswar and Jeypore on the one hand and
Bhubaneswar, Sambalpur, Jharsuguda and Rourkela on the other by small aircraft
would be economically viable.

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Paradip Port is one of the Major Ports of India serving the Eastern and Central
parts of the country. Its hinterland extends to the States of Odisha, Jharkhand,
Chhattisgarh, West Bengal, Madhya Pradesh and Bihar. The Port mainly deals with
bulk cargo apart from other clean cargoes. There is unprecedented growth in the
traffic handled at this Port in the last decade. The Port has got ambitious expansion
programme to enhance its capacity up to 260.50 MMTPA by 2023 to meet the ever
increasing demand
WHY PREFER THE PORT OF PARADI
The Port operations are carried out round the clock 365 days.
With annual cargo handling capacity of 108.50 million metric tonnes, the
Port occupies the top spot amongst all Major Ports of the country in terms of
capacity.
The Port has a capacity of evacuating as many as 25 rakes in a day, which

will further increase on completion of ongoing railway projects.
The Port is adding 2 lakh square meters of stack yard to the present 23 lakhs
square mtrs. of stack yard.
The port is also creating storage space of 12,000 sqmtrs. to handle food
grain.
Up to 14.5 mtrs. draft at the berths maintained round the year.

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14nos. of berths in the inner harbour waiting for the vessels up to 95,000
DWT.
3 SPM of IOCL are operational to handle VLCC up to 3,50,000 DWT size.
Equipped with state of the art equipments and technology.
Cost effective and efficient service.
51.95 MMTPA Surplus Capacity.
17640 MT birthday output, 2.24 days of Vessel turnaround time(PortA/C).

Seamless rail and road connectivity
FLASH NEWS
Applications are invited Online for Plot allotment. Interested firms are
requested to click on" Online Plot allotment" The single Point Mooring
(SPM) of Indian Oil Corporation has become operational from 28.12.08 and
the Port has handled VLCCs successfully. This facility adds about 15 MTPA
capacity to the Port.
Power:-
Since independence, generating capacity has increased from 1362 to
over 100,000 MW. However there are widespread shortages of power

in almost all parts of the country.
Inadequate inter-regional transmission links;
Inadequate and ageing sub-transmission & distribution network
leading to power cuts and local failures/faults;

Large scale theft and skewed tariff structure;
Slow pace of rural electrification;

28
Inefficient use of electricity by the end consumer.
Urban Infrastructure:-
Urban infrastructure consists of drinking water, sanitation, sewage systems,
electricity and gas distribution, urban transport, primary health services and
environmental regulation. The process of urbanization has gathered considerable
momentum in recent years and this has put urban infrastructure and services under
severe strain. Urban transport is one of the key elements of urban infrastructure.
The major objective of urban transport initiative is to provide efficient and
affordable public transport. A National Urban Transport Policy (NUTP) has been
formulated with the objective of ensuring easily accessible, safe, affordable, quick,
comfortable, reliable and sustainable mobility for all. Revised guidelines for
preparation of comprehensive city transport plans and DPRs have been prepared
and circulated to all State Governments/UTs for availing of financial assistance to
the extent of 40 per cent of cost as Central assistance under the present scheme of
Urban Transport Planning. Detailed guidelines have also been formulated for the
guidance of the States and cities and preparation of DPRs for both rail-based and
road-based public transport. Delhi and Kolkata have introduced Metro Rail system
in their cities. Delhi Mass Rapid Transit System (MRTS), a joint venture between
the Government of India and the Govt. 120 of National Capital Territory of Delhi,
is being implemented by the Delhi Metro Rail Corporation (DMRC). The
Bangalore Mass Rapid Transit System (MRTS) contemplates construction of metro
corridors along East-West (18.1 km.) and North-South (14.9 km.) in Bangalore.
The Government of Karnataka has got financial appraisal of the project conducted
recently. The estimated completion cost of the project is Rs.56.05 billion.
Bangalore Metro Rail Corporation (BMRC), a joint venture company, is executing

29

the project, which is scheduled to be completed by 2011. The first section of 7 km.
will be completed in 2009.
CHAPTER -4
Infrastructure Problem in Odisha
Odisha Economic development The long term growth of NSDP (over the period
1950-51 to 1988-89, at 1970-71 prices) has been 2.7 per cent which, one may say,
is not really satisfactory. Whether at 1970-71 or at 1980-81 prices, the economy
has posted the highest growth rate historically during the decade of the 1980s. At
1980-81 prices, the growth rate of NSDP has come down from about 4.8 per cent
to 3.8 per cent, which is also the case for all individual economic sectors, with the
exception of mining and quarrying (from 8.7% to 12.7%), unregistered
manufacturing (2.6% to 8.1%), communications (7.9% to 13.7%) and trade, hotels

30

and restaurants (from 5.7% to 6.8%). In particular, it is to be noted that the
agriculture and animal husbandry sector has seen a fairly sharp decline in the
growth rate in the 1990s - down to 1.9 per cent from 3.1 per cent in the 1980s.
STRUCTURAL CHANGE
There is a simple pattern of change in sectoral composition of NSDP : a decline of

about 16 percentage points in the share of Agriculture and Animal Husbandry
sector between 1980-81 and 1999-2000, which has been entirely taken up by a
corresponding increase in the share of the tertiary sector from 30.5 per cent to 46.0
per cent, with the secondary sectors share remaining more or less stagnant.
Workforce Characteristics
The available data clearly suggest that there has occurred a decline in employment
rates for both males and females and in both rural and urban areas between 1983-
84 and 1999-2000. Since labour force participation rate has not increased much
between 1987-88 and 1993-94, there has been a squeeze on employment during the
second half of the 1990s.
The other relevant point is that, unlike the sectoral shift of output, the sectoral
distribution of workers (across primary, secondary and tertiary sectors) has
remained broadly the same.
As regards status of employment, only a few pertinent observations may be made.

First, casual labour is relatively higher in Orissa as compared to other low income
States, and thus the extent of self-employment is lower. Second, regular wage
employment is greater in the case of male as compared to female workers. Third,
the degree of actualization has significantly increased in the case of rural female
workers in the 1990s.

31

The rate of open unemployment is the highest in Orissa among the low-income
States. The degree of visible underemployment is again higher in Orissa than for
other low-income States and all-India, and this is observed both for male and
female workers and also in both rural and urban areas.
Performance of Agriculture in Orissa - Intertemporal and Spatial Variations
For increasing agricultural productivity and accelerating agricultural growth of the

State, public investments in agriculture sector need to be stepped up substantially.
Keeping in view the importance of agriculture in creating employment, generating
income and ensuring self-sufficiency in food production, share of agriculture in
total plan outlay needs to be enhanced. Emphasis should be laid on providing
appropriate rural infrastructure and services. Irrigation facilities should be
extended to dry land and rainfed areas. Instead of constructing big dams and
reservoir canal projects ground water development should be encouraged by
providing subsidized credit for construction of wells and tube wells and for
purchase of diesel or electric pump sets. Other infrastructural facilities like rural
road, transport, power supply, marketing and storage should be improved.
Agricultural credit should be provided to the needy farmers in time and as per their
requirement. For better recovery of crop loans group-lending may be encouraged.
Effective extension services should be provided to the farmers.
Farmers should be motivated to diversify their cropping pattern by cultivating

more remunerative and cash crops, which include oilseeds, fibre crops, vegetables
and fruits. State Government should provide all-out support for cultivation of crops
having export potential. In this regard thrust should be given on development of
floriculture and horticulture in the State. Orissa has vast potential for development
of horticulture. Different agro-climatic zones have been identified for development
of specific fruits, vegetables and spices. Hill tracts of KBK districts and of

32

Phulbani and Gajapati districts have been chosen for intensive horticultural
activities. Cultivation of commercial fruits, use of hybrid vegetable seeds,
propagation of off-season vegetable cultivation, establishment of bio-centres for
production of quality planting materials, use of quality potato seeds, installation of
drip irrigation system, beneficiary oriented cultivation of oil palm etc. are the
major thrust areas in horticulture. A compact area approach may be applied for
propagating horticultural activities. This would help in developing the market and
also facilitate establishment of food processing and other downstream activities.
Farmers should be encouraged to follow mixed farming. Along with cultivation

farmers should undertake complementary activities like dairy, poultry, goatery and
piggery to supplement farm income. A mixed farming system is more desirable
from the view point of ensuring better utilisation of family labour and farm by-
products and also to meet the increasing demand for nutritious food and farm-yard
manure. Also, for adding value to agricultural produce, agro-processing industries
should be set up in rural areas. Agricultural inputs like quality seeds, chemical
fertiliser, pesticides should be made available to the farmers in time and as per their
requirement at reasonable prices. It is most important that all the inputs should be
supplied to the farmers under one roof and through one window, so that transaction
costs can be minimized. Farmers should be motivated to undertake joint farming
and to form user groups for efficient, equitable and sustainable management of
irrigation system and watershed. Micro-financing through formation of self-help
groups should be given due importance. The coverage of crop insurance should be
extended and instead of defined area approach individualistic assessment of crop
loss should be made and accordingly indemnities be paid. Land leasing should be
legalised with proper regulation of its terms and conditions for achieving efficient
production and equitable distribution of production gains. Last but not the least,

33

employment opportunities in the nonfarm sector should be created by accelerating
the pace of industrialization in the State, so that growing pressure on limited land
and declining size of land ownership holding can be checked.
Industrialization in Orissa: Structure, Policy and Prospects
This chapter discusses the various aspects of the industrial economy of Orissa in an
inter-regional framework. From the analysis, it is found that Orissas industrial
structure has hardly shown any improvement as compared to other States. In most
cases, the presence of highly capital intensive industries with cost disadvantages in
fuel, interest payment and depreciation has resulted in heavy losses. Moreover, the
prevalence of low wages in many industries causes low productivity of labour.
Because of poor agricultural base, the emergence of an active local entrepreneurial
class has been stifled. The persistently disadvantageous position of the State raises
basic questions of neglect and misdirected policies of the Centre as well as the
State.
Lack of proper infrastructure, especially, transport and power, has severely

impaired both growth and diversification of industries in the State. So, a serious
rethinking on the issue of greater use of power for the States industrialization,
rather than mere selling it, is essential. In order to activate the industrial sector,
development of railways and civil aviations is very much essential. Secondly, to
generate income in the rural sector and promote a viable rural industrial base,
larger investment in agricultural development needs to be made. Thirdly, for
further industrial development, a dynamic small enterprise promotion policy for
the State is needed. Fourthly, the State is endowed with a range of high-grade
minerals. But, these are not exploited properly. Mining activities should be
upgraded to the status of manufacturing industry wherein mineral processing upto

34

certain stages could be undertaken in the region. Fifthly, modern agro and forest
based industries need to be encouraged in the State. Finally, preference should be
given to the new areas of industrial activities with special emphasis on location in
underdeveloped districts.
Power Sector Reform in Orissa: A Case Study in Restructuring
The 70s and 80s saw a resurgence of the notion that, transferring assets from the
public sector to private enterprises would raise both locative and technical
efficiency, leading to greater economic well-being of the region. This led to a spate
of privatization decisions in several countries, both in the developed and
developing ones. Moreover, such change in the ownership was not confined to a
particular industry. Even the State monoliths like electricity boards,
telecommunications, and railways were open for private participation.
The experiment and the experiences of the power sector reforms undertaken in the
State of Orissa are analysed in that backdrop. The Orissa Power Sector has
completed three crucial stages of the reform process - corporatisation, unbundling
and privatisation of distribution. The regulatory body has also been functioning and
has issued four tariff orders so far. However, the sector is faced with a serious
financial crisis. The transmission company, GRIDCO, is virtually bankrupt and the
distribution companies (Wesco, Nesco, Southco and Cesco) are incurring
significant losses. The study stresses that, problems like high T&D losses, low
collection performance, inefficient human-resource, rationalising the tariff
computation should be addressed immediately to put the sector on the path of
recovery. Finally, efforts should be made to reform the sector rather than just
privatising and substituting the public monopoly with a private monopoly.
DEVELOPMENT SCENARIO OF THE VILLAGE

35

In a poor and backward State like Orissa it is least expected that the development
scenario of the village and the pace of socio-economic transformations could be
better. Our socio-economic survey of different types of villages in different regions
of Orissa clearly reveals that the State has to make a longitudinal perspective plan
for the transformation of the subsistence oriented backward agricultural economy
in order to solve the problem of poverty and to improve the quality of life of rural
people. Dependence of population on primary sector occupations is quite high,
whereas agriculture with its present State of infrastructure and technology and,
above all, operational holdings is itself not in a position to provide a substantial
form of gainful livelihood to the majority of rural population in Orissa. There have
been little occupational diversifications of population at the village level. Irrigation
infrastructure created through many development projects has failed to achieve
desired goal across space and people.
CHAPTER-5
Finding, Conclusion & Bibliography
Finding:
Odisha Infrastructure services are essential to achieve development targets in any
economy some of its major dimensions include the level of economic growth, level
of education, level of health services, degree of modernization, status of women,
level of nutrition, quality of housing, distribution of goods and services, and access
to communication. But neither human well- being nor of economic growth is
possible only through the provision of economic infrastructure as well as social
infrastructure. Health and education along with support infrastructure such as
shelter, sanitation, power, telephony, and road connectivity that can give economic
growth a human face. By improving the quality of human resources and enhancing
capability, these indicators act as stimulants to growth. As K. C. Pant rightly said

36

Infrastructure sector may not always be an engine of growth directly but they are
essential rails on which the wheels of economic progress can proceed with
sustained speed. Without a strong and viable infrastructure, it is difficult to achieve
rapid and sustained growth of the order of 7 to 8 percent, which is necessary for
progressively eradicating poverty.
Conclusion :-
Economic growth and poverty reduction in Asia are closely tied to its ability to
reap benefits from regional economic integration. Though logistics have not yet
become a serious constraint, action will be required to enhance both the quality and
quantity of infrastructure to improve overall efficiency. Growing cross-border
economic activities in Asia have important implications for the demand for
infrastructure development in the region. Infrastructure needs for feeder seaports
and logistics services, among others, will continue to rise rapidly.
With the emergence of the PRC and India as important destinations for exports and
sources of imports, cross-border connectivity with different regions of these
countries features prominently in Asias infrastructure development plans. For the
neighboring economies in Southeast Asia, South Asia, and Central Asia, export-
related transport and logistics will be particularly important, especially those
geared toward serving the PRC and India. For poorer countries and poorer areas
within countries in which infrastructure is a major constraint to expanding
economic opportunities, improved access to larger regional markets will be key to
economic success. The efficiency of cross-border infrastructure connectivity will
be an important determinant of a countrys prospects for economic growth,
employment creation, poverty reduction, and social improvement.

37

Through greater investment in logistics and infrastructure, Asia can further
strengthen its productivity and competitiveness. It can gain more from improved
connectivitysuch as cross-border transport corridors on land and a series of
feeder ports and regional hubsfor promoting exports and imports. Connectivity
can be increased by improving overall efficiency: by building, rehabilitating,
upgrading, and modernizing infrastructure services, equipment, and facilities;
supporting capacity building for asset management and maintenance; coordinating
cross-border services and harmonizing regulations, procedures, and standards; and
facilitating trade and customs. Various stakeholders need to work together to
ensure success in this difficult area.
Bibliography:-
Book Mark: Dutta & Sundaram:- Indian Economy
Govt. of India:- Economic survey ( Annual Report )
www.pppindiadatabase.com
www.rites.com
www.delhimetrorail.com

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Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

PROGRESS IN INDIA ECONOMIC DEVLOPMENT BY ODISHA

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

Therefore, Indian governments first priority is rising to the challenge of

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

Estimate the importance of PPP in infrastructure development; and To give

To guarantee the performance of any contract or obligations and the payment or

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

LIMITATION OF THE STUDY:-

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

According to World Bank Infrastructure is an important part of

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

ODISHA INFRASTRUCTURE MARKET:-

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

12th Five Year Plan:-

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

Issues and remedies in financing of Infrastructure Projects:

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

TYPES OF INFRASTRUCTURAL FINANCE AVAILABLE:-

In case of infrastructure projects the guidelines issued by RBI permit banks

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

Works Department is headed by the Engineer-in-Chief-cum-Secretary to

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

Odisha Railway zone

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri

Infrastructure & Economic Development in Odisha

MAJOR RAILWAY STATIONS

The Committee on Infrastructure has approved the report of

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Infrastructure & Economic Development in Odisha

S.C.S (A) College, Puri