VGF for metros to be raised to 50%

A high-level Sub-Committee on Infrastructure has proposed 30 per cent increase in VGF, for metro projects. The present VGF is of 20 per cent. A proposal to this effect has been sent to the Finance Ministry for Metro Projects. Private players will enjoy benefits of higher VGF, provided they comply with stricter guidelines for preparing DPR, being outlined by the Urban Development Ministry. Moreover, projects will be scrutinised by government departments. It is mandatory for all city authorities to set up unified metro transport authorities that will ensure seamless disbursal of funds provided under the VGF policy. At present, the Centre provides 20 per cent loan as soft loans to such projects and the remaining 80 per cent is shared by the state government and private partners.

Jharkhand cabinet clears R&R policy

Investors intending to set up industries had good news awaiting them, as on 16 July 2008, Jharkhand cabinet cleared the Rehabilitation and Resettlement (R&R) policy. This approval will now allow the investors to acquire land and compensate the displaced people. The policy underlines the affected people to be compensated with jobs in industrial projects coming up on the land where they lived and invest in training them. The cabinet approval is likely to expedite several greenfield steel projects in Jharkhand. Major steel companies facing problems in land acquisition include Arcelor-Mittal, Tata Steel and Jindal steel.

Uttarakhand favour private participation power policy

The Uttarakhand government has announced a new power policy in favour of private participation. The policy gives priority to non-GoU (Government of Uttaranchal) agency, for constructing hydel projects of upto 25 MW in the state. The state government will not levy tax on power generation, transmission equipment and building materials for projects. There is also a proposal to set up four small hydel projects with $41.6 million aid from Asian Development Bank. The government has recently decided to hand over 35 year old hydro power projects to private companies to renovate and modernise them.

Bihar bit by IT bug, soon to have an IT policy

Bihar is gearing up to announce its IT policy. The thrust of new IT policy will be to attract national and multinational IT companies to invest in the state, for setting up world class IT infrastructure and connectivity for e-governance. It will also encourage broadband digital networks and national long distance operators (NLDOs) to build robust fibre optic network in Bihar. Cabinet approvals are likely to come in by end-July and the policy is expected to be formally announced by August 2008.

Participation in road projects restricted

The Ministry of Road, Transport and Highways has prepared a new document for RfQs, which restricts the number of road projects a company can bid for. Accordingly, a company can apply for prequalification stage in not more than 12 projects. A pilot implementation of the document will be at the Hospet-Bellary section of the national highway. A company is also disallowed from participating in a project if it has been shortlisted for the final bidding process in eight or more projects and declared by the authority as the selected bidder for four or more projects, in the previous four months. Earlier, there were no restrictions to the number of projects a company could apply for, but the new document will ensure a level-playing field for infrastructure companies and prevent cartelisation by the bigger players.