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Economic
Development Policy |
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ECONOMIC DEVELOPMENT BOARD |
INTRODUCTION
To
realise the vision of a progressive Madhya Pradesh the
government must spearhead the implementation process. It shall
kick start and catalyse development to attract inflow of private
investments. There is a compelling need to execute development
initiatives expeditiously and ensure effective utilisation of
the scarce resources. The State shall therefore constitute
a nodal agency to oversee and de-bottleneck the development
process. The Economic
Development Board shall be the nodal agency.
STRUCTURE
AND COMPOSITION OF THE EDB
The
Economic Development Board shall be chaired by the Chief
Minister and comprise of select members of the cabinet and
officers of the rank of Principal Secretary to the Government of
MP. A Project
Planning and Monitoring Unit (PPMU) headed by the Chief
Secretary shall be set up as a part of the EDB to plan and
monitor project implementation for both private and public
funded projects. Select large investment or critical public
investment infrastructure projects shall be overseen by the EDB.
Infrastructure projects, identified by the various departments
as showing potential for private involvement on a BOT/ BOOT/
other format and with a minimum investment of Rs. 10Cr. shall be
referred to the EDB.
MPSIDC shall be appointed as the implementing / facilitating
agency for public-private partnership projects within the EDB
since it has accumulated significant experience in privatising
infrastructure projects and has also been the co-promoter of the
country’s first private toll road project. In the light of its
revised role it may be renamed as the
Madhya Pradesh
Industrial and Infrastructure Development Corporation (MPSIIDC). |
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Proposed
structure of the Economic Development Board |
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To meet the funding requirements in the infrastructure
sector, it is desirable to induce private capital on a large
scale. However, privatisation of the infrastructure sector
across the country has progressed fairly slowly. At present,
individual departments identify and prepare projects for private
investment. To expedite the privatisation process, it will be
necessary for the GoMP to create a readily available pool of
relevant project development skills within a single agency. A
technical cell shall be set up under MPSIIDC to carry out
techno-commercial feasibility studies project structuring and
preparation of draft concession agreements, etc., as part of
project development. The body shall outsource skills extensively
from the private sector in the project development process. The
technical cell would thus need to be funded perhaps by
multilateral agency grants to be able to attract the best talent
from the private sector. MPSIIDC shall be able to recover its
project development expenses from the successful bidder at the
time of award of concession.
ROLE
OF THE EDB
This
EDB shall expedite the process of policy development,
identification and sanctioning of key projects and finally,
monitoring their progress. In all of this a strong programmatic approach will be critical to the success of the
venture.
The domain of the EDB would encompass the following sectors.: |
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Rural
and agricultural infrastructure |
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Industrial
Infrastructure |
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Services
Infrastructure |
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Core
Infrastructure (Transportation, Energy, Urban
Infrastructure) |
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Social
Infrastructure |
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Fiscal
Reform |
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The recommended functions of the Economic Development Board are:
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Laying
down the sectoral agenda for implementation by various
departments.
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Monitoring
of policy implementation.
The responsibility of implementing the projects will be on
the department.
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To
facilitate
and monitor infrastructure development in the
state.
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To
expedite
the process of project identification and sanctioning within
the state.
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Institutionalising
privatisation across
sectors by incubating and cross fertilising experiences.
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Project
preparation and feasibility studies with a view to
privatisation.
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Monitoring
of public and private projects by the Project
Planning and monitoring Unit (PPMU). EDB will have
a supervisory and non-implementation role only.
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Resolution
of interdepartmental issues for infrastructure projects.
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As
one of its first tasks, the Board shall undertake to
produce a comprehensive Infrastructure Blueprint for the
state, along the lines of the “Gujarat Infrastructure
Agenda – Vision 2010” produced by the Gujarat
Infrastructure Development Board.
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METHOD
OF EMPOWERMENT
In
order to vest sufficient powers with the EDB to enable it to carry
out the duties envisaged for it, the GoMP may need to enact the
necessary enabling legislation as herein provided.
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The
Infrastructure Privatisation Act, 2001 shall be enacted,
by which departments may refer infrastructure projects to
the Board: |
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For
all projects to be implemented with investment
from the private sector, and involving project
investment greater than Rs.10 Cr. |
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For
all projects involving public investment greater
than Rs.25 Cr.
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The
Rules of Business of the Government of Madhya Pradesh may
need to be suitably amended so that |
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Projects
to be privatised may be referred to the EDB for
preparation activities
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Recommendations
of the EDB on project structuring for private
projects shall be binding on the departments
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Interdepartmental
disputes on implementation of projects falling in
the above two classes shall necessarily be
referred to the Board, and the decisions of the
Board shall be binding on the departments
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In
case of disputes between departments and private
sector partners, the private investors may
approach the Board for speedy resolution of issues
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The
Board shall utilise these powers thus vested with it in
order to ensure that: |
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Projects
put up for private sector participation are well
studied and prepared and bidding processes are
transparent and efficient
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Project
selection and implementation is in keeping with
overall state infrastructure policy
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Interdepartmental
issues are resolved speedily so as not to hinder
project implementation
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INFRASTRUCTURE PRIVATISATION ACT, 2001
The
Government of Madhya Pradesh is committed to privatisation of
infrastructure in the state and introduction of a user-to-pay
regime.
In order to institutionalise the process of privatisation of
infrastructure within the state, the GoMP shall create well
defined and transparent processes for project preparation,
appointment of consultants, award of project concessions and
sharing of risk. The GoMP shall lay down these processes within a
statutory framework that makes these methodologies mandatory for
all project privatisation efforts by government departments and
the EDB. It is perceived that a transparent framework for
public-private partnerships would provide a degree of comfort to
potential private investors in infrastructure projects.
Accordingly,
the state shall enact an Infrastructure Privatisation Act to
facilitate privatisation of infrastructure projects. The
Infrastructure Privatisation Act will lay down guidelines for
privatisation of projects on a BOT/ BOOT/ BOO/ other commercial
basis. The act shall pertain to infrastructure projects of minimum
size Rs.10 Cr. The act shall incorporate:
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Formats
for privatisation which are covered under the act.
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Procedures
to be followed for competitive bidding out of projects.
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Procedure
for referring project preparation activities to the EDB.
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Procedures
to be followed in case of unsolicited bids received for
project ideas.
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List
of mandatory studies and procedures to have been completed
prior to bidding out.
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Mandatory
inclusions in project concessions: |
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Obligations
of the government particularly with regard to
clearances and land acquisition |
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Lender
securities |
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Forms
of state support |
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Indication
of risks to be necessarily addressed and allocated
in the project concession |
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Project
termination conditions |
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Dispute
resolution mechanism |
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