Government mulls JV entity to boost PPP projects

The government is mulling an institution modelled on Partnerships UK (a major player in developing PPP projects in the United Kingdom) to build viable PPP projects in India. The proposal is likely to be part of the Union Budget 2008-09.

The proposed institution will be a 50:50 JV between the government and infrastructure financial institutions. It will work with government bodies from the conceptual stage of a PPP project and take over certain tasks from the government, like PPP project analysis, and VGF in case a key project lacks commercial viability. It will assist in developing the PPP policy and contract standardisation, project evaluation and implementation, and provide support to PPPs. It will also bear the risk of outcome of the development and procurement process.

Gujarat integrated township policy by March 2008

The Gujarat government is expected to implement its integrated township policy by March 2008.

A rough draft has been released containing a template of procedure and infrastructure norms. It is learn that, six categories of townships have been proposed including technology parks, education-based townships, medical and healthcare townships, tourism-related townships, logistics parks and residential townships.

The policy will open the urban corridors stretching across Vapi to Ahmedabad and Ahmedabad to Rajkot, for private investment form local and foreign developers, to set up integrated townships. Townships will also be permitted at growth nodes emerging around various industrial clusters, infrastructure hubs like ports and periphery of existing urban centres.

New industrial policy soon for Rajasthan

The Rajasthan government is in the process finalising a new industrial policy soon, to infuse growth in the industries within the state. It is learnt that presently a draft policy is being prepared with consultations to include more incentives and attract further investors in the state.

MNRE issues guidelines for solar power projects

The Ministry of New and Renewable Energy (MNRE) has issued guidelines for generationbased incentives for grid interactive solar power generation projects having maximum capacity up to 50 MW during the 11th Plan period. The ministry will provide a generation based incentive of a maximum of Rs.12 per kWh to the eligible projects which are commissioned by 31 December 2009, after considering the power purchase rate (per kWh) provided by the State Electricity Regulatory Commission (SERC). This incentive will be provided through the Indian Renewable Energy Development Agency (IREDA) and any project that is commissioned after 31 December 2009 will be eligible for the incentive with a 5 per cent reduction and a ceiling of Rs.11.40 per kWh.

The generation-based incentive will continue to decrease corresponding to the utility signing a PPA at a higher rate. The proposed annual escalations agreed with the utility, as in force, must be reflected in the PPA. The generationbased incentive approved for a grid interactive photovoltaic (PV) power generation project will be available for a maximum period of 10 years from the date of approval and regular power generation from that project, provided the utility continues to purchase power from that grid interactive PV power plant.

It is learnt that, the state agencies and utilities will assist and support the project developers to evacuate power from the project site, similar to other renewable energy based projects. The grid interactive solar PV power projects will be considered for generation-based incentive on first-come-first served basis. The Ministry has clarified that all Central and state power generation companies and public/private sector PV power project developers who have or propose to set up a registered company in India will qualify for generation-based incentives.

Government to no longer permit IT units to set up within industrial parks

To reduce tax exemptions for industrial parks, the government may henceforth disallow development of new IT units in these parks and tighten the norms for manufacturing units within such parks. This amended industrial park scheme 2008 was notified on 08 January 2008. It has raised doubts for the 350 parks proposed by real estate developers like DLF, Ansal Properties and Singapore's Ascendas, among others. Industrial parks so far are entitled to income tax breaks till 31 March 2009.

The scheme has also raised queries about the basic infrastructure requirements that industrial park developers must provide. The new scheme mandates the developer to provide a minimum built-up area of 50,000 sq.m, as against the earlier process. Also, the administrative control of the industrial park scheme has been transferred to the revenue department (Central Board of Direct Taxes) under the Finance Ministry.

Previously, the scheme was jointly administered by the Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and the Revenue Department.