Public Private Partnerships In INDIA

Introduction Orissa is one of the most progressive states in the eastern part of India. Known mostly for the vast natural resources, easily available workforce, investor-friendly government, favourable climate, Orissa attracts heavy investment in various sectors. In all the three sectors of the economy, such as primary, secondary, and tertiary Orissa has gained remarkable achievement over the past few years. Orissa has been a forerunner in industrial growth, agri based businesses and tourism. The state has huge potential in marine based agro-processing businesses. Its huge mineral deposits, sufficient water and power supply offer excellent opportunity for the investors to establish their operation in the state. With a vast mineral deposit the state ranks sixth in mineral production in India. Various mineral resources found in the state are bauxite, coal resources, iron ore, nickel and chromite resources. The main agriculture products in the state are coconut, cotton, fruits, groundnut, jute, oil seeds, potato, pulse, rice, spices and vegetables etc. The Gross Domestic Product (GDP) of Orissa grew at 11.25 per cent between 1999-00 and 2005-06. The state recorded a GDP of USD 21.7 billion in 3005-06. Majority of the growth is been driven by the secondary and tertiary sectors. Iron and steel have been a primary sector in which the state has received tremendous investments over past few years. There are 45 projects for capacity over 56 MT per annum of steel. Similarly telecom has been another thrust area. Some of the major investors in metal sector are Aditya Aluminium, Arcelor Mittal, Bhusan Group, Essar Steel, Hindalco, Jindal Group, L&T-Dubal, POSCO, Tata Steel and Vedanta Resources. Advantages Orissa Vast reserve of natural resources Good Infrastructure in terms of roads, railway, power, telecommunications etc Investor friendly government Strong inflow of direct foreign investments Competitive industrial environment Low establishment cost

Executive Summary Orissa is located on the eastern coast of India. The state is Bounded by the Bay of Bengal in the east, West Bengal in the north-east, Bihar in the north, Madhya Pradesh in the west and Andhra Pradesh in the south. Orissa is richly endowed with a variety of natural resources like minerals and forests, a long coastline, sea, sweet water and brackish water bodies, rivers and rivulets and a rich cultural heritage offering a wide range of fine manifestations having both aesthetic and commercial value. Orissa is a forerunner in the field of industrial development, trade and economy, for the past few years. The state has a vast depository of natural resource, minerals and ores. The state is complete with all the infrastructure needed for industrialisation, such as sufficient power supply, water resources, roads, railway, port, telecommunication facility, human resources etc. Some of the factors influencing growth of the state are; Availability and ease of use of factor inputs such as land and labour; Availability of adequate physical and social infrastructure Governance and regulatory framework in terms of rules and regulations governing entry, operation, and exit of firms, stability in regulation, integrity of public services, law and order and investment facilitation; and Provision of incentives and access to credit.

The state has significant geological potential and ranks sixth in mineral production in India. Orissa accounts for 32.9 per cent of iron ore, 24 per cent of coal resources, 50 per cent of bauxite, 95 per cent of nickel and 98 per cent of chromite resources of India. Orissa has with vast mineral deposits like coal, iron ore, manganese ore, bauxite and chromite. The government of Orissa has formulated the famous Industrial Policy Resolution 2007 and Vision 2020, which solely focuses on the private sector as the main vehicle of growth. This state aims at achieving faster growth in sectors such as mining, tourism, handicrafts, and other manufacturing sub sectors.

Economic Snapshots
Capital Domestic Ports Land Area (sq km) Coastline Climate Summer Rainy Season Winter Average Rainfall (mm) Number of Districts Number of Cities/Towns Number of Villages Principal Language Population (in million, 2001 Census) Share of Urban Population States Share in Indias Population Sex Ratio (females per 1000 males) Literacy Rate Birth Rate in 2005 (per thousand persons) Death Rate in 2005 (per thousand persons) Infant Mortality Rate in 2006 (per thousand live births) Advantages Orissa Bhubaneswar Airport Biju Patnaik Airport, Bhubaneswar Paradeep, Gopalpur 155,707 482 km Tropical climate March to June July to September October to February 1480 30 102 51,061 Oriya 36.80 14.93% 3.58% 972 63.6% 22.3 9.5 75

Vast reserve of natural resources Good Infrastructure in terms of roads, railway, power, telecommunications etc Investor friendly government Strong inflow of direct foreign investments Competitive industrial environment Low establishment cost

Economy

Orissa is one of the most vibrant economies of the emerging India. The state has has remarkable geological potential. Orissa ranks sixth in mineral production in the entire country. With vast mineral deposits, such as coal, iron ore, manganese ore, bauxite and chromite. Orissa attracts numerous investors across the globe to set up business in the state. Orissa government is putting great emphasis on the growth and development of industry in the state. SGDP of Orissa

Year 1999-00 2000-01 2001-02 2002-03 2003-04 2005-06

SGDP(USD billion) 8.16 7.53 8.75 9.62 12.32 14.08

Source: Office of the Accountant General Orissa Over past few years, Orissa has grown remarkably in terms of state gross domestic product (GSDP). The GSDP of the state has improved impressively at a growth rate of 9.53 per cent between 1999-00 and 2005-06. The same has increased from USD8.16 billion in 1999-00 to USD14.08 billion in 2005-06. Remarkable growth has been observed in all the three sectors, such as primary (comprising agriculture and livestock, fishing and mining and quarrying), secondary (comprising manufacturing, construction and electricity, gas and water supply) and tertiary (comprising communication, financial services, real estate and related services, public administration and other services). Notably, the secondary and tertiary sectors have contributed a lot towards the improved economy of the state. Sectoral Contribution of GSDP

Sector Primary Secondary Tertiary

Percentage 24.1 31.7 44.3

The secondary and tertiary sectors in particular have shown significant increase in contribution to GSDP. The primary sector currently accounts for 42.7 per cent of the Net State Domestic Product (NSDP). The secondary sector shows a growth rate of 15.4 percent, while the tertiary sector account for about 41.9 percent.

Infrastructure
Orissa offers goos infrastructure in the fields, such as energy, transport, irrigation, finance, communication, and social infrastructure -education and health. This has attracted huge inflow of foreign direct investment to the state. Social Infrastructure Education Orissa is a forerunner in the field of education in the entire eastern region of the country. There are a large number of high ranked educational institutes, such as the National Institute of Technology, Rourkela, and Xavier Institute of Management, Bhubaneswar. The state has 9 universities, 88 engineering / MCA colleges and 18 medical colleges. Some of the new institutes that are coming up include IIIT Bhubaneswar, NISER and IIT Kharagpur Campus at Bhubaneswar. The prestigious Vedanta Group plans to establish a world-class technical university with an annual intake of 100,000 students in 95 disciplines. Sri Sri Ravishankar Vidya Mandir Trust has also signed a Memorandum of Understanding (MoU) with the state government to establish Sri Sri University of Art of Living with facilities to house 15,000 students and 1,500 faculty. Health Orissa has about 1,701 government allopathic medical institutions with 13,886 hospital beds in the state. By the end of 2004-05, there were 174 hospitals, 231 community health centres, 120 primary health centres (PHCs), 1,162 PHCs (with new facilities) and 14 mobile health units in Orissa. The state has launched a Total Sanitation Campaign to provide sanitation to all households in all the 30 districts by 2009-10. Access Infrastructure Transport The state is developing its transport network to extend support to the growing industry base in the state. The participation from the private sector has been a great help in furthering the establishment of a world-class infrastructure. Roads Orissa has about 238,000 km of roads, which includes 3,508 km of National Highways, 5,102 km of State Highways and 30 km of State Expressways. Public Private Partnership (PPP) initiative is being encouraged in the construction of new highways in the state. Some of the major projects recently completed in Orissa are the Bhubaneswar-Cuttack Highway, Talcher-Gopalpur Highway and the four laning of Cuttack-Paradeep Highway. Railways The total railway line length in Orissa, at the end of 2005-06 was 2,340 km. Orissa is a link between the eastern and western part of India through the railway network of South-Eastern and East-Coast Railways. The commissioning of the Talcher- Sambalpur Railway has proved to be a vital link between the coastal and western Orissa. The KoraputRayagada and Daitari- Banspani lines have also been completed. The Haridaspur-Paradeep and Angul-Sukinda Rail links are vital to connect the mineral-rich regions in the state to industries. The Daitari-Banspani and Khurda RoadBolangir railway links are under construction. Ports Paradeep Port in Jagatsinghpur district of Orissa, a major port of India, handled 38.5 million tonnes of cargo in 200607. Paradeep Port has its own railway system, water supply and bunkering facilities, and repair and maintenance facilities. The port implements the single-window service facility through its Central Documentation Centre (CDC). Besides housing the Traffic, Marine and Finance & Accounts departments, The CDC also extends customs and banking service facilities. Paradeep port handles various commodities, such as chrome ore, coking coal, fertilisersfood grains, fertilisers, food grains, iron ore and thermal coal. Other important ports are Gopalpur Port in Ganjam district and Dhamra in Bhadrak. The Orissa Government is encouraging private firms to step into the port sector to create infrastructure. This will boost up the upcoming metallurgical projects. Aviation Orissa has a domestic airport located at the state capital of Bhubaneswar in Khurda district. The airport is under expansion and modernisation.The airport connects the state with Delhi, Kolkata, Chennai, Nagpur, Mumbai and Hyderabad. Besides, there are 13 airstrips and 16 helipads. Power Orissa was the first state to initiate the reforms in the power sector. As part of the power sector reform, It undertook unbundling, corporatisation, and privatisation of the power sector. Orissa Power Generation Corporation Ltd (OPGC) has been established as a wholly owned government company with a view to establishing, operating and maintaining thermal power generating stations in the state. Orissa Hydro Power Corporation Ltd (OHPC) looks after hydroelectricity in the state. Four distribution companies, namely Western Electricity Supply Company of Orissa Ltd (WESCO), North Eastern Electricity Supply Company of Orissa Ltd (NESCO) and Southern Electricity Supply Company of Orissa Ltd (SOUTHCO), have also been created. Industrial Infrastructure Orissa government has taken several steps to improve industrial infrastructure. This has been a pivotal step towards promoting huge investments in the state. Some of the key features include;

Development of industrial and social infrastructure in steel and mining corridors, including setting up of railway corridors, upgrading ports and developing expressways. Four new ports coming up with an investment of USD2 billion at Dhamra, Gopalpur, Jatadhari Muhan and Kirtania. Huge Investments in road and railways. Major expansion of Paradeep Port underway through public private partnership (PPP). Modernisation of Bhubaneswar Airport by Airport Authority of India with an investment of over USD60 million. Setting up of Bio-pharma park in Bhubaneswar through PPP. Setting up of Integrated Textiles Parks at Daleiput, Khurda and Choudwar.

Telecom and IT The state had 3.8 million wireless connections and 770,000 wireline subscribers at the end of August 2007. The Orissa government improved the state of telecom infrastructure to assist businesses especially. It has been a key factor in establishing a largely growing IT and IT enabled Services base in the state. The state has created a number of IT Parks and towers. The Infocity, Bhubaneswar is an IT Park is spread over 350 acres. It houses companies, such as Infosys, Wipro, TCS and MindTree.

Policy Orissa state government has developed a clear and focused policy in the fields, such as agriculture, industry, information and communication technology, tourism, port, power, fisheries. State Agricultural Policy Orissa is blessed with a wide range of fertile soil and climate suitable for agriculture. Agriculture has been a prominent sector in developing the state. Majority of the population is dependent on agriculture for livelihood. The state agricultural policy emphasises agriculture for agro-based industries, biotechnology-based industries, commercial purposes, food processing industries and modern farming techniques. The policy aims at formation of Kisan Sahayak Kendra (KSK). The Kisan Sahayak Kendras are dedicated for counselling prospective to entrepreneurs on agriculture projects. Salient Features of the State Agricultural Policy To generate employment opportunities and enhance the status of agriculture from the present level of subsistence agriculture to a profitable and commercial venture To utilise agriculture as the main tool for poverty eradication and promote entrepreneurship To make available knowledge of modern farming systems To Adopt integrated programmes to solve problems, such as water logging, soil erosion, wasteland, saline soil To create skilled labour for management of modern agriculture and help mechanisation of agriculture to increase productivity To establish agro-based industries and food processing industries for higher value addition and reorient agriculture towards exports To achieve self-sufficiency in the production of fruits, flowers, vegetables, potato, onion, milk, egg, fish and meat and increase area under tea, coffee, rubber, cashew and other plantation crops; To provide irrigation facilities to 50 per cent of cultivable land through completion of incomplete irrigation projects and promotion of individual and group enterprise To promote private enterprise in the marketing of agricultural produces.

State Industrial Policy Orissa government is committed to transform the state into a vibrant industrial state. The state industrial policy has been reformulated in March 2007 with broader vision and commitment toward attaining the goal. The state has identified tremendous potential in sectors, such as steel, aluminium and petrochemicals, mineral processing and value addition, chemicals and fertilisers, agro and food processing industries, handicrafts and handloom, export oriented industries and IT industries. Salient Features of the State Industrial Policy To create a business climate conducive to accelerate investment in industry and infrastructure projects To raise income, employment and economic growth To reduce regional disparities in economic development within the state To deregulate the business environment in the state To implement and make operational single window mechanism for industrial clearances To ensure balanced utilisation of natural resources for sustainable development

Power Policy Salient Features of the power Policy To issue license for transmission and distribution and set tariff TO prevent monopolistic behaviour by operators To safeguard the interests of the consumers To take measures conducive to an efficient electricity industry in the state

Orissa Tourism Policy Orissa Tourism Policy is formulated as a promoter and catalyst to create an environment for planned and sustained development of tourism. It also welcomes and encourages non-government sectors to participate in development of

the state of tourism in Orissa. Special Tourist Police has already been deployed at Puri, one of the most visited tourist destinations in the state. Salient Features of Orissa State Tourism Policy To maintain and improve the existing roads and planning of new roads to the tourist centres will be given due priority To develop peration of charter flights will be encouraged while improving the air service to the state; To establish Water sports and water transport services will be encouraged Incentives to hotels and other tourism-related activities will continue To establish a convention complex and golf course at Bhubaneswar Marketing and publicity of tourism potential and the facilities will be stepped up

Information and Communication Technology (ICT) Policy The Information and Communication Technology (ICT) Policy encourages widespread use of information technology for offering good governance to the citizens. It is aimed at developing a faster and transparent decision making through an e-governance system. Salient Features of Information and Communication Technology (ICT) Policy A combined application form to obtain clearances would be developed to centralise statutory/ non-statutory clearances and time bound clearances with provision of deemed clearances would be created for ICT industries All IT/ ITES industries will be exempted from the payment of Sales Tax for a period of five years from the date of their first billing Electrical energy consumption by IT/ ITES units shall be charged at industrial rate subject to approval of the Orissa Electric Regulatory Commission Important building infrastructure such as IT Parks, STPI Complex shall be free from power cuts Interest subsidy on loans from financial institutions/ banks at 5 per cent per annum to new units in IT/ ITES IT and ITES units are declared as public utility services IT/ ITES units are exempted from the clearance and routine inspections of the controlling and regulatory authorities of the State Government and are eligible for self-certification to the labour, ESI and EPF authorities IT/ ITES units will be exempted from clearance from electrical inspector for approving contract demand of load and appliances to be fitted in an IT unit IT/ ITES units will be exempted from the payment of electricity duty No stamp duty will be charged on land allotted by government to IT/ ITES units Price preference of 10 per cent will be available to local IT units participating in the e-Governance projects of the State Government.

Port Policy Ports are a critical infrastructure for exports and imports. Orissa has a coastline of 480 km with conducive, strategic and natural port locations. Paradeep, one of the major ports in India, offers tremendous opportunities for international trade. The state government has declared the Port Policy to develop the ports. The policy acts as a single window agency for development of ports and inland waterways. Salient Features of the Orissa State Port Policy

To decongest the existing major ports by developing minor ports on the Eastern Coastal region, so as to cater to the needs of increasing volumes of traffic To encourage shipbuilding, ship repairing, and ship breaking and to establish manufacturing facilities for heavy industries, in and around ports To establish connectivity of the ports with the riverine systems to increase the transportation of cargo through inland waterways; To handle 70-80 MT of cargo by 2006 in the port sector, as envisaged by the Ministry of Shipping, Government of India To increase Orissas share in the export and import sector, in national and international trade and commerce To provide facilities for coastal shipping of passengers and inter-state cargo traffi c and further extension of

these services to West Bengal, Andhra Pradesh, Tamil Nadu etc; To take up suitable facilitating measures as well as policy initiatives for attracting private sector investments in the development and operation of existing and new minor ports

State Reservoir Fishery Policy Salient Features of the state reservoir fishery policy are; To attract increasing investments from private sector To augment fish production from the vast untapped/ undertapped reservoir resources through scientific management To develop skills among fishermen and fisher women in reservoir operation and organisational strengthening To generate gainful rural employment with special reference to fishing communities and economic rehabilitation of displaced persons To generate substantial revenue for the state To introduce systematic management strategies both for conservation and sustained fi sh production; To stimulate entrepreneurship for fishery sector with special reference to reservoir fishery To substitute traditional methods by introduction of advanced technology in operation of reservoir fishery Orissa Public Private Partnership Policy The Public Private Partnership (PPP) is a suitable approach in the infrastructure sector. It aims at supplementing scarce public resources, creating a more competitive environment and helping to improve efficiencies and reducing costs.The infrastructure sectors covered by the policy include airports, airstrips and heliports, inland container depots and logistics hubs, ports and harbours, railways roads, bridges and bypasses and urban infrastructure. It also includes facilitating the development of industrial parks, theme parks like IT and biotechnology parks, knowledge parks, special economic zones, townships and trade fairs. Salient Feature of Orissa Public Private Partnership Policy To leverage State and Central Government funds, support private investment and to create a conducive environment so as to utilise the efficiencies, innovativeness and flexibility of the private sector to provide better infrastructure and service at an optimal cost To set up a transparent, consistent, efficient administrative mechanism to create a level playing fi eld for all participants To prepare a shelf of projects to be offered for PPP and take them forward with assistance of the owner departments through a transparent selection process To put in place an effective and efficient institutional mechanism for speedy clearance of the projects; To provide necessary risk sharing framework in the project structure so as to assign risks to the entity most suited to manage them To create a robust dispute redressal mechanism and regulatory framework for PPP projects; To provide the required viability gap funding where the essential projects are intrinsically unviable; To facilitate implementation of the objectives of the policy by the creation of Orissa Infrastructure Development Fund.

Business Opportunities
Orissa has been a favourite investment destination for numerous business for long time. The state has got immense potential in the field of metallurgy and mining, agro-food processing, cement, iron, steel and fero-alloys, fisheries, tourism, and many more. District Wise Business Opportunities in Orissa District Angul Bolangir Baleswar/Balasore Bargarh Boudh Cuttack Deogarh Dhenkanal Gajapati Ganjam Jagatsinghapur Jajpur Jharsuguda Kalahandi Kandhamal Kendrapara Key Industry Areas Agriculture Forest based industry Minerals (fero alloy, aluminium) Cement Paper Sugar Fertilizer Iron and steel Handloom Information Technology Power Tourism Industries Mining and mineral-based industries, aluminium, coal mines, power generation and fertilisers, SSIs in engineering units, fly ash bricks, grinding Mining and mineral-based industries. SSIs in agriculture-based industries, engineering and Alloys, paper mills, tourism, fishing Mining, cement, fisheries, animal husbandry, SSIs in engineering, glass and ceramics, paper products, rice mills and agro-based products Mining, textiles, SSIs in agro-based products and textiles Paper mills, textile and steel industries, handicraft and cottage industries (silver filigree, brass and metal works, stone carving, cane and bamboo products among others), food-processing Coal industries at Talcher, power generation, steel and food based industries Tourism, timber based industries, bamboo works, refectories and asbestos industries Fisheries, horticulture, SSIs in agro-based industries, engineering and metal works Chemicals, sugar, textiles, SSIs in food-based products, glass and ceramics, textiles Shipping, food processing, manufacturing, repairing and fisheries Mining, food based industries Steel and related industries Mining, sugar mill, cotton mill, oil seed based industry. Food based industries, graphite industry, forest based products Food based industries

Orissa has witnessed a strong inflow of investments for the past couple of years. The state is a favourite destination for a number of industries. There are 45 projects for capacity over 56 MT per annum of steel in the state. The state is also facilitating four new aluminum projects with more than four MT per annum capacity worth USD 10 billion. The service sector has been witnessing tremendous growth and further potential of development. These include telecom and IT.

The area of construction; road infrastructure, housing projects and commercial complexes, have seen maximum inflow. Orissa has also attracted one titanium project with an investment of USD 250 million Some of the major investors in the metal sector include players, such as POSCO, Arcelor Mittal, Tata Steel, Bhusan Group, Jindal Group, Essar Steel, Hindalco, Vedanta, Aditya Aluminium, L&T-Dubal etc. The state has a 15-mtpa mega petrochemical complex by Indian Oil Corporation with an investment of USD 6 billion. Three-Tier Single Window Clearance Mechanism The state adopts Three-tier Single Window Clearance Mechanism to facilitate speedy implementation of industrial projects. Some of the key features of the mechanism includes; Government has enacted Orissa Industries (Facilitation) Act, 2004 for implementing the Single Window Clearance System for faster and one-point clearance of industrial projects, single point dissemination of industrial project related information and streamline the inspection of the industries by different agencies/ authorities. District Level Single Window Clearance Authority under the Chairmanship of Collector for projects involving investment less than USD 11.9 million. State Level Single Window Clearance Authority chaired by the Chief Secretary for projects involving investment of USD 11.9 million or more but less than USD 238 million. High Level Clearance Authority chaired by the Chief Minister to examine and consider proposals for industrial and other projects involving investment of USD 238 million or above.

Iron, Steel and Ferro Alloy Industry Orissa is one of the biggest producers of iron and steel in India. The state accounts for about 32.9 per cent of all the iron ore deposits in the country. This makes Orissa the favourite designation for many domestic as well as international players to set up their iron and steel plants. The sate has huge reserves of other minerals, such as coal, dolomite and limestone, which is required for the industry. There are abundant water resources, surplus power availability, good road and rail network, port facility at Paradip and two more new ports coming up at Gopalpur and Dhamra. Aluminium Industry Orissa has nearly 50 per cent of the bauxite reserves of India. This makes the state the first choice for setting up aluminium and aluminium based industries in Orissa. The supportive facilities, such as adequate water and power supply are much encouraging. Small Scale Industries and Cottage Industries The small scale industries in Orissa have much business potential. The industry is characterised by attributes, such as high export promotion prospects, high value addition, low capital investment requirement and low gestation period. The Orissa State Co-operative Handicrafts Corporation is the prime authority that is engaged in encouraging exporters, enlarging marketing opportunities, introducing new design and technology and strengthening the production base in the handicrafts sector. Growth of Small Scale Industries in Orissa Year 2000-01 2001-02 2002-03 2003-04 2004-05 Growth of Cottage Industries Year 2000-01 2001-02 2002-03 2003-04 2004-05 Cumulative Number of Units 22431 48627 73668 96955 114763 Cumulative Number of SSI Units 66206 70125 74133 78564 83075

Agro-Based Industry in Orissa The prime main agriculture products produced in Orissa are rice, pulse, oil seeds, vegetables, groundnut, cotton, jute, coconut, spices, potato and fruits. There is tremendous scope for agro-based industries, such as cattle poultry, coconut oil, cotton oil, dal-milling, dehydration of vegetables, edible oil milling, maize milling, mushroom cultivation, non-edible oils, potato chips, rice milling, sugar mills many more. Orissa witnesses coconut cultivation over an area of more than 50,000 hectares. The opportunities in the agro-based industries in Orissa has This has given a boost to industries like fertilisers.

Mining Industry Orissa is one of the country's richest states to mineral resources, The state accounts for 98 percent of chromite, 95 percent of nickel, 50 percent of bauxuite, 32 percent of iron ore and 24 percent of coal. The mineral belt in the state has spread over in an area more than 6000 Sq. Km. Some of the other important minerals found in the state are: manganese, lime stone dolomite, graphite, decorative stones, beach sand, china clay, tin ore etc.

Mineral Resources as a percentage of National Reserves Mineral Iron Ore Bauxite Nickel Chromite Coal Percentage of national reserves 32.9% 50% 95% 98% 24%

IT/ITES and Electronics Industry The few recent years have witnessed the growth and development of the IT, IT enabled Serves and electronics industries in Orissa. However, the IT sector is dominated by Small and Medium enterprises with a total number of more than 300 units. The growth of software export in 2006-07 was recorded to be 58 per cent against national average of 28 per cent. Orissa is targeting software exports of USD one billion by 2011-12. Orissa has vast talent pool to cater to the needs of this industry. The state produces 20,000 Bachelor of Technology and MCA graduates every year.

Key Players
National Aluminium Company Limited (NALCO) Incorporated as a public sector enterprise of the Government of India in 1981, National Aluminium Company Limited (NALCO) is Asias largest and one of the worlds seventh largest integrated aluminium complex. The main units of NALCO in Orissa are at Damanjodi (Mines & Refi nery complex) and Nalconagar-Angul (Smelter & Power Plant Complex) are engaged in bauxite mining, alumina refining, aluminium smelting and casting, power generation, rail and port operations. These units employ the worlds latest and finest technologies in the aluminium manufacturing industry. Hindalco Industries Ltd Hindalco, one of the largest producers of primary aluminium in Asia, is the worlds largest aluminium rolling company. Owned by the Aditya Birla Group, Hindalco acquired the Indian Aluminium Company Ltd (INDAL). The Indal units at Hirakud, Orissa comprise of two smelters, one located, with a captive power plant and coalmines. Vedanta Group The London-based holding company of Sterlite group, Vedanta Resources Ltd, is a key player in the aluminium industry in India. Vedanta Resources Ltd has established the Vedanta Alumina Ltd, a 0.5 million tonne per annum capacity aluminium smelter at Jharsuguda. The group is setting up an alumina refinery at Lanjigarh, Kalahandi district of Orissa. This project has a capacity of 1.4 million tonnes per annum. Vedanta operates several bauxite mines within the aluminium operations of group companies, BALCO and MALCO. Rourkela Steel Plant (RSP) Rourkela teel Plant (RSP) is one of the largest steel plants of the Steel Authority of India Limited (SAIL) in India. Established in 1955, RSP is a major producer of flat, tubular and coated steel products and produces 1.6 million tonnes of diversified steel items per annum. The plant has made major improvements in the areas , such as steel quality, packaging, with highest class of service delivery and customer satisfaction.RSP focuses largely on the CRNO, galvanised plain and corrugated sheets and tin plates and packaging of HR coils.

Tata Sponge Iron Ltd (TSIL) Tata Sponge Iron Ltd (TSIL) was initially established by Tata Steel in collaboration with IPICOL. The primaty aim of the unit was to to introduce industrialisation to a backward area of Orissa. Loacted at Bilaipada, near Joda, TSIL incorporates an indigenous technology for making sponge iron.

Arcelor Mittal Arcelor Mittal has signed a Memorandum of Understanding with the Orissa Government for setting up a 12 mtpa steel plant. The plant is estimated to be set up at an investment of more than USD 9.5 billion, in Keonjhar district. The entire plant will be completed in two phases of 6 mtpa each.

Paradeep Phosphates Ltd (PPL)

Incorporated in 1981, Paradeep Phosphates Ltd (PPL) was established as a joint venture between the Government of India and the Republic of Nauru. PPL is currently held by fertiliser majors Zuari-Chambal Group and OCP of Morocco. PPL is a major producer of phosphoric fertilisers. It produces diammonium phosphate with a capacity of 2,400 tonnes per day in the first phase. Its second phase produces phosphoric acid and phosphorus pentaoxide.

Reliance Energy Ltd (REL) Reliance Energy Limited (REL) has been actively participating in the initiative of the Orissa Government for privatising its distribution systems. REL has invested about USD 260 million in three electricity distribution companies, namely Western Electricity Supply Company of Orissa Limited (WESCO), North Eastern Electricity Supply Company of Orissa Limited (NESCO) and Southern Electricity Supply Company of Orissa Ltd (SOUTHCO). NESCO. WESCO and SOUTHCO cater to a consumer base of 0.40 million each with an annual energy input of 2,500 MW, 3,700 MW and 1,600 MW.

National Thermal Power Corporation (NTPC) National Thermal Power Corporation (NTPC), Indias largest and the worlds sixth largest electricity generation company shares about 19.5 per cent of installed capacity in India. NTPC generates 27.7 per cent of total electricity of India. NTPC has two coal-based power plants in Orissa at Talcher and Angul with an installed capacity of 460 MW and 3,000 MW, respectively.

Infosys Technologies Ltd Infosys Technologies Limited is Indias leading software services and IT consulting firm. Infosys has has a worldclass development centre at Bhubaneswar with a decade of strong presence in the state. The development centre at Bhubaneswar is engaged in fostering Infosys relationships with its clients from countries, such as Canada, Europe and North America.

Business

Obtaining Approvals

Approvals/Clearances required Incorporation of Company Registration/Industrial licence/Industrial Entrepreneurs Memorandum (IEM) Allotment of land Permission for land use in case industry is located outside an industrial area

Departments to be consulted Registrar of Companies District Industries Centres for SSI/Secretariat for Industrial Assistance (government of India) for Large and Medium Industries IDCO IDCO Department of Town and Country Planning Local Authority/District Collector Orissa State Pollution Control Board (OSPCB)

NOC and consent under Water and Air Pollution Control Acts Forest & Environment Clearance Approval of construction Activity and Building plan Sanction of Electricity

Ministry of Forest & Environment, Government of India Developmental Authority

Distribution Companies-Central Electricity Supply Utility of Orissa (CESU), NESCO, SOUTHCO, WESCO Transmission CompanyGRIDCO Water Resources Department Chief Inspector of Factories & Boilers OSFC/Commercial Banks like IDBI, ICICI Limited, SBI etc. Commercial Tax Department and Central and State Excise Department

Water Supply Factory & Boiler clearance Finance Orissa VAT Act, and Central and State Excise Act

Source: Team Orissa and Directorate of Industries, Orissa

Cost of setting up business

Cost Parameter Industrial land (per sq mtr) Office space rent (per sq ft per month) Residential rent (for a 2,000 sq ft house,per month) 5-star hotel room (per night) Commercial & Industrial Electricity

Cost Estimate USD 2 to USD 10 USD 0.2 to USD 1.2 USD 95 to USD 200 USD 95 to USD 150 7.5 cents/kWh to 10 cents/kWh

Contact for Information Information pertaining to investment opportunities or setting up a new business unit in Orissa can be obtained from: Industrial Promotion and Investment Corporation of Orissa Limited (IPOCOL) and Team Orissa IPICOL House, Janpath, Bhubaneswar- 751022 Phone: +91-0674-2542601 Fax: +91-0674-2543766 Email: [email protected] Website: www.ipicolorissa.com Directorate of Industries Director of Industries, Orissa Killa Maidan,Cuttack-753001 Phone: +91-0671-301892 Fax: +91-0671-301227 Email : [email protected] Website: http://ws.ori.nic.in Orissa State Finance Corporation (OSFC) O.M.P. Square, Cuttack- 753003 Phone: +91-0671-2443659 Fax: +91-0671-2443644/2444193 Email: [email protected], [email protected] Website: www.osfcindia.com Orissa Industrial Infrastructure Development Corporation (IDCO) IDCO Tower, Janpath, Bhubaneswar- 751022 Phone: +91-0674-2540820/2542784 Fax: +91-0674-2542956 Email: [email protected] Website: www.idcoindia.com Confederation of Indian Industry Plot No 8, Forest Park, 1st Floor, Bhubaneswar 751009 Tel +91-0674-2531013 Fax +91-0674-2530944 Email [email protected] Web www.ciionline.org Orissa Small Industries Corporation Limited Industrial Estate Madhupatna, Cuttack- 753010 Phone:+91-0671-2341458/2342404,2344612

Fax: +91-0671-2341875 Email : [email protected] Website: www.osicltd.com Agricultural Promotion & Investment Corporation of Orissa Limited (APICOL) 326, Baramunda, Bhubaneswar- 751003 Phone: +91-0674-2561203/2561874 Fax: +91-0674-2563306 Email: [email protected] Website: www.agriorissa.com Orissa Mining Corporation Limited (A Government of Orissa Undertaking) OMC House, Bhubaneswar- 751001 Phone: +91-0674-2394578/778 Fax: +91-0674-2391629 Email: [email protected] Website: www.orissamining.com

Ports

OVERVIEW

SIZE
Indian ports handled cargo of 510 million tonnes in 2004-05, 10.8% increase over 2003-04 80% of the port traffic by volume is dry and liquid bulk, remaining 20% is general cargo, including containers o Containerised cargo has grown at a rate of 15% p.a. over the last 5 years India has 12 Major Ports and 185 Minor Ports along 7,517 km long Indian coastline o Cargo handled by Major Ports has increased by 9.5% p.a. over last 3 years o Major ports handle 75% of the total traffic
The JNPT port where the capacity will be over 3 million TEU by 2006

The port sector has seen significant investment by major global port operators

Of the 12 Major Ports, 11 ports are run by Port Trusts while the port at Ennore is a corporation under the Central Government. These ports handled 383 million tonnes of cargo in 2004-05 Two major Government projects underway: o Project "Sethusamundram": Dredging of the Palk Strait, in Southern India to facilitate maritime trade through it o Project "Sagarmala": $22 billion project for the modernisation of Major and Minor Ports

STRUCTURE
Government of India dominated maritime activity in the past. Policy direction is now oriented to encouraging the private sector to take the lead in port development and operations

Many Major ports now operate largely as landlord ports - International port operators have been invited to submit competitive bid for BOT terminals on a revenue share basis Significant investment on BOT basis by foreign players including Maersk (JNPT, Mumbai) and P & O Ports (JNPT, Mumbai and Chennai), Dubai Ports International (Cochin and Vishakhapatnam) and PSA Singapore (Tuticorin) Minor ports are being developed by domestic and international private investors: Pipavav Port by Maersk,

Mundra Port by Adani Group (with a terminal operated by P & O)

POLICY
100% FDI under the automatic route is permitted for port development projects 100% income tax exemption for a period of 10 years Tariff Authority of Major Ports (TAMP) regulates the ceiling for tariffs charged by Major ports/port operators (not applicable to Minor ports) A comprehensive National Maritime Development Policy is being formulated to facilitate private investment, improve service quality and promote competitiveness.

Cargo handled by Major Ports in India

Source: Indian Ports Association

OPPORTUNITY

OUTLOOK
Cargo handling at all the ports is projected to grow at 7.7% p.a. till 2013-14 with Minor ports growing at a faster rate of 8.5% compared to 7.4% for the Major ports o Traffic estimated to reach 960 million tonnes by 2013-14 o Containerised cargo is expected to grow at 17.3% over the next 9 years The New Foreign Trade Policy envisages doubling of India's share in global exports in next five years to $150 billion o A large portion of the foreign trade to be through the maritime route: 95% by volume and 70% by value

POTENTIAL
Growth in merchandise exports projected at over 13% p.a. underlines the need for large investments in port infrastructure Investment need of $13.5 billion in the major ports under National Maritime Development Program (NMDP) to boost infrastructure at these ports in the next nine years o Under NMDP, 219 projects have been identified for the development of Major ports o Public-Private partnership is seen by the Government as the key to improve Major and Minor ports * 64% of the proposed investment in Major ports envisaged from private players The plan proposes an additional port handling capacity of 530 MMTA in Major Ports through: o Projects related to port development (construction of jetties, berths etc.) o Procurement, replacement or up-gradation of port equipment o Deepening of channels to improve draft o Projects related to port connectivity Investment need of $4.5 billion for improving Minor Ports

Civil Aviation & Airports

OVERVIEW

SIZE
India has 125 airports; of these 11 are designated international airports In 2004-05, Indian airports handled 60 million passengers and 1.3 million tonnes of cargo o Passenger traffic grew at over 22% in 2004-05 over 2003-04; Cargo grew at 21.6% over the previous year
Development of airport infrastructure is a focus area for the Government

STRUCTURE
Currently all 125 airports are owned and operated by the Airports Authority of India (AAI)

There has been a significant uptrend in domestic and international air travel

The Government aims to attract private investment in aviation infrastructure o Privatization of the Delhi and Mumbai airports is in progress - bidders have submitted final bids. Expected investment of about $3.5 billion o New international airports at Bangalore and Hyderabad are being built by private consortia with a total investment of about $600 million o 25 other city airports are being considered for private investment Air India and Indian Airlines are the Government owned international and domestic flag carriers respectively. Indian private airlines - Jet, Sahara, Kingfisher, Deccan - account for around 60% of the domestic passenger traffic. Some have started international flights.

POLICY
100% FDI is permissible for existing airports; FIPB approval required for FDI beyond 74% 49% FDI is permissible in domestic airlines under the automatic route, but not by foreign airline companies o 100% equity ownership by Non Resident Indians (NRIs) is permitted AAI Act amended to provide legal framework for airport privatization 100% tax exemption for airport projects for a period of 10 years

'Open Sky' Policy of the Government and rapid air traffic growth have resulted in the entry of several new privately owned airlines and increased frequency/flights for international airlines.

Airport Statistics 2003-04

Bangalore Chennai Delhi Hyderabad Kolkata Mumbai

Source: Director General of Civil Aviation, AAI

OPPORTUNITY

OUTLOOK
Passenger traffic is projected to grow at a CAGR of over 15% in the next 5 years o To cross 100 million passengers p.a. by 2010 Cargo traffic to grow at over 20% p.a. over the next five years o To cross 3.3 million tonnes by 2010 Major investments planned in new airports and upgradation of existing airports

POTENTIAL
Favourable demographics and rapid economic growth point to a continued boom in domestic passenger traffic and international outbound traffic International inbound traffic will also grow rapidly with increasing investment and trade activity and as India's rich heritage and natural beauty are marketed to international leisure travellers. o Consequent high demand for investments in aviation infrastructure Government is taking steps to increase participation by private industry

Major opportunities lie in: o Modernisation/upgradation of Metro airports - induction of partners for Chennai, Kolkata expected subsequently o Development of 30 non-metro airports - induction of partners for Chennai, Kolkata expected subsequently o Greenfield airport projects planned in resort destinations and emerging metros such as Goa, Pune, Navi Mumbai, Ludhiana, etc. Estimated investment of over $15 billion for airport development over the next 5 years

For additional information: Ministry of Civil Aviation (http://civilaviation.nic.in), Airport Authority of India (http://www.airportsindia.org.in/aai/main.htm)