Sucheta Dalal :Surprise surprise a Maha transformation
Sucheta Dalal

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Surprise, surprise, a Maha transformation  

Mar 28, 2005


Maharashtra is arguably India’s richest and most industrialised State, but it is over a decade since its politicians showed any sign that they understood its strengths or made any effort to develop them for the greater public good.

On March 22, State Finance Minister Jayant Patil surprised us all. There were no fresh taxes to fund its bankruptcy. Instead, carefully targeted tax cuts were aimed at nurturing the Maharashtra’s advantage of having as its capital India’s financial nucleus and the most coveted business destination.

Among other things, Patil announced a steep 95 per cent slash in stamp duty on trading in government securities, a 90 per cent cut in stamp duty on commodity market transactions, a 50 per cent cut in stamp duty on housing mortgages up to Rs 10 lakh and a tax holiday on housing loans of Rs one lakh. It also included a Rs 1,000 crore allocation for Mumbai’s development, rehabilitation programme for the poor and interest-free housing loans for those below the poverty line.

If all works well, Mumbai could even look at developing into an offshore financial centre, as has been proposed from time to time.

Interestingly, signs of change are not restricted to the budget alone. An eight-year old project - the Multi-Modal International Passenger and Cargo Hub Airport at Nagpur (MIHAN) - aimed at developing the Vidharbha region shows real signs of takeoff. Part of the reason for MIHAN’s new credibility is that the State has put the formidable R.C. Sinha in charge of a special purpose vehicle called the Maharashtra Airport Development Company Ltd. (MADCL) to implement the project.

Sinha is man who gets things done and was responsible for the development of Navi Mumbai (as chief of CIDCO), the Mumbai-Pune Expressway and the 40-odd flyovers that saved Mumbai from mindless traffic congestion. His return to Maharashtra is itself significant. During the Congress-NCP government’s previous, lacklustre term, it had little use for Sinha’s proven expertise; but he was quickly snatched up by then Andhra Pradesh Chief Minister Chandra Babu Naidu and also wooed by the Goa and West Bengal governments.

On the face of it, MIHAN seems like a pipe dream. There are grand plans, but little money. How will a cash-strapped state finance the project? MIHAN has been provided a meagre Rs 500 crore for land acquisition. And why would aircraft want to stop over at Nagpur, despite its unique location at the very centre of the country, unless it is developed? The only thing in MIHAN’s favour is Sinha’s track record of project implementation and the 3310 hectares of land to be acquired for the project. That is just enough to get it started.

Sinha is aware of the hurdles. “Aircraft won’t come to Nagpur simply because we have an airport”, he says. So he will focus on a world-class project drawn up by a team of Indian and International consultants to leverage Nagpur’s extraordinary road and rail connectivity to drive passenger and cargo traffic to Nagpur. Ironically, 280 aircraft overfly Nagpur every day guided by its Air Traffic Controller, so an international airport at Nagpur (declared by the BJP government in 2004) and a cargo hub is not really so far fetched.

Sinha plans to spend just around Rs 15 to Rs 20 crore on the airport. This will go into extending its existing Rs 3200 meter airstrip to allow large aircraft to land, developing the airport terminal, installation of a couple of aerobridges and setting up an aircraft maintenance base, building a taxiway and creating extensive aircraft parking facilities. This alone will allow over 60 aircraft to land everyday.

The airport will continue to be run by the same management. The main focus will be on creating world-class infrastructure around the airport through a bunch of specific SPVs under the MIHAN project that are all conceived as public-private partnerships with MADCL. These will include an extensive Special Economic Zone, which will contain two distinct projects.

An IT Park (200 hectares) is already being marketed to IT companies on the promise of top of the line infrastructure and connectivity. A Health City (spread over 60 hectacres) comprising at least eight super-speciality hospitals that will service most of the states of north central India. This SPV is under the charge of Dr. Sanjay Mukherjee - an IAS officer and a medical doctor, who hopes to bring the best medical facilities to MIHAN. Power for the SEZ will be provided by a 100 MW coal-based captive power plant to be built on a BOT basis without assistance from the grid at affordable rates.

The big magnet, however, will be a road terminal of international specifications and facilities, including computerised parking bays, a bank of weigh bridges, storage, repair, fuelling and warehousing capacity and facilities for truck drivers and staff. This will interface with the airport and rail terminal to create a multimodal hub in the centre of the country that will attract cargo landing for rapid distribution around the country and as a loading destination for exports. Will Sinha be able to pull it off?

The circumstances are right, the project is important for the country and he is undoubtedly capable. Sinha is a bureaucrat who believes in aggressively marketing his projects and MIHAN is already reaching out to all the top software companies in the country (a couple have already shown interest) and abroad to include Nagpur in their future plans.

He is also persuading private airlines such as Air Deccan to consider locating their maintenance and repair hubs at Nagpur. Or, to use the new aircraft parking facilities for night parking instead of the congested Mumbai and Delhi airports. Some private sector groups are looking at a University project in the expectation of Nagpur’s rapid development.

More importantly, Maharashtra badly needs serious development in Vidharbha and this project alone could go a long way in transforming the region. Secondly, a top minister from the BJP and NCP are from that region. It is close to Aviation Minister Praful Patel’s hometown and will get his full support. A vibrant industrial hub in central India will aid the development of regions around Nagpur and the contiguous states and so, should receive the support of the Central government. With a Congress-led government at the centre, the project would hopefully avoid petty turf issues.

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-- Sucheta Dalal