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TMI BlogModified Industrial Infrastructure Upgradation SchemeX X X X Extracts X X X X X X X X Extracts X X X X ..... for the 11th Plan. A total of 39 projects have been sanctioned with a total project cost of Rs. 2549 crore with central grant component of Rs. 1524 crore. 1.4 In 2011. the Recast IIUS was evaluated for its effectiveness and continuation in the 12th plan period by the National Productivity Council (NPC). The NPC which conducted the evaluation- found the Scheme to be effective in enhancement of competitiveness of industry. improvement of environment in industrial areas and employment generation in the traditional industry clusters. It was recommended to continue the Scheme in the 12th Five Year Plan period with, suitable modifications. to overcome operational hurdles and ensure timely completion of projects. 2. Objective The key objective of the Modified IIUS continues to be to enhance competitiveness of industry by providing quality infrastructure to catalyse and promote industrial growth. employment generation and technology up gradation. 3. Scope 3.1 Projects would be sanctioned to upgrade infrastructure in Industrial Estates/Parks/Areas and greenfield projects could be supported in backward areas, including NCR. However, PRIORITY would be given to upgrade infrastructure in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 as well as those experienced during implementation of the Scheme. The Scheme was implemented through Special Purpose Vehicles (SPVs) in the PPP mode in the 10th and 11th Plan. However, this model has faced serious practical difficulties which has led to enormous delay in implementation. cost escalation in case of majority of the projects, lack of project accountability and shortfalls in achievement of outcome. It was challenging for stakeholder industries to unite to form a SPV for creating a common infrastructure due to internal conflict among industries. The SPVs faced difficulties in raising equity from its members as envisaged in the project; and some SPVs defaulted in raising funds and in some cases. state government and local bodies contributed funds to the extent of failed contributions from the Industries. Further, optional involvement of the State Governments in the scheme led to weak ownership of the project with reduced financial, monitoring and mentoring support to the project. 5.1.1 Out of the 39 sanctioned projects. 18 Projects have been completed. None of these projects was completed on time; the projects suffered a time over run of 12 to 59 months. the average a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Plan and should give details of other projects including utilization of industrial area plots in case of an existing industrial estate or park. SIA shall select the site in consultation with the industry and the scheme shall not permit creating industrial estates wherein it shall be convenient to do so due to availability of land or other reasons, rather a viable site should be selected. 5.4.3 Conceptualize. formulate. achieve financial closure; implement, operate and maintain the infrastructure; 5.4.4 Procure the land for the project, in case of a new industrial estate/park. 5.4.5 Mobilize funds from financial institutions and other sources (including beneficiary contributions) to finance the project: arrange additional funds, if required; to meet time and cost overruns. 5.4.6 Obtain all necessary statutory approvals/clearances including environmental and quality standards as applicable before implementation. 5.4.7 Decide on methodology of time-sharing, user charges and other operating parameters well in advance before implementation of each sub-project. It would be empowered to collect service and user charges to recover costs and future expansion. It will operate and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reas and generating credible data for laying the foundation of the project proposal. The critical gaps in the infrastructure impinging upon the competitiveness of the industry should be clearly brought out in the proposal. Measurable outcomes such as expected enhancement in productivity and employment should be incorporated into the project proposal which would also be one of the main criteria for sanctioning the projects. The proposal must spell out outcomes envisaged and the indicators that would be positively impacted by the project. It should also suggest the mechanism for operation and maintenance of the infrastructure proposed to be created on sustained basis by levying user charges/fee etc. 5.6.2 The Detailed Feasibility Report (DFR) should include realistic cost estimate of construction, technical specifications and cost estimates for plant and machinery detailed master plan along with sectional drawings and building plan with legends, financial assumptions (user charge, capacity utilization) with benchmarks, projected financial statements (P&L. Balance Sheet, Cash Flow, etc.) with financial indicators(DSCR. IRR. etc). This DFR would clearly establish the expected outco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and should be procured and registered' transferred in the name of the SIA: Physical possession of the land required for the project is to be ensured. 6.3.2 Financial Appraisal /Closure - Allocation for the same should have been made in the SIA's budget - Details/Commitment Proof of Contributions from all the stakeholder - Final Sanction letter should be provided for FIs contribution - Appraisal Note from the Bank for DIPPs consideration, in case of debt financing. In case of self financing, appraisal note by the state/ central financial agency 6.3.3 Detailed DPR - Detailed specifications of machineries and equipment's with cost estimates - Technical compliance to scheme guidelines - Firm implementation schedule - Copies of all the Clearances required in the project 7. Funding Pattern 7.1 The central government will contribute upto 50% each of the project cost subject to a ceiling of Rs.50 Crore. The remaining contribution will be from the SIA, beneficiary industries and loan from financial institutions. The minimum contribution of the SIA will be 25% of the project cost. In case of North Eastern States, the central grant and the minimum contribution of the SIA will be 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost due to time and cost-overruns have to be borne by the State Implementing Agency or other stakeholders. 8. Timeline for completion: Implementation Schedule for the projects would be on the basis of size and nature of the project. In general, a time period of 2-3 years after the final approval to the project, would be considered adequate and approved timelines as approved by the 'Apex Committee' shall be adhered to strictly. 9. Role of the State Government The rote of the State Government is envisaged to be central to the facilitation of the scheme implementation. All project proposals received by DIPP have to be approved by the respective Board of SIA and the State Industries Department or any other concerned Department. The Scheme will give weightage to those proposals which could focus on development of backward areas and where the existing sector specific schemes have been unable to make inroads. A.s per paragraph 5.4.12 an agreement will be signed wherein role of the Government would be clearly spelt out for monitoring of projects and provide financial support to the designated SIA. 10. Release of Funds 10, I The Government of India will release its grant in 3 inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the project. 13 Project Management Consultant (PMC) The SIA can engage a PMC depending upon its requirement; appointment of PMC would be optional for SIA and its necessity will differ from state to state. 14 Procurement of Goods and Services 14.1 All procurement of goods, equipment and services shall be done through an open. transparent and competitive process. Appropriate performance guarantee should be built in the agreement to ensure timely completion of the project. 142 Procurement policy must be as per Government's General Finance Rules (GFR). 15. Assets 15.1 The Assets acquired/created by the SIA out of government assistance shall not be disposed, encumbered o: utilized for the purposes other than for which the funds have been released. 15.2 A register of permanent and semi-permanent assets acquired wholly or mainly out of the funds provided by Government of India should be maintained in the Form GFR 19. 15.3 SIA will fix appropriate user charges for various facilities and services provided by it to fully recover O & M cost and mate the project sustainable. 15.4 In case of dissolution of SIA or cancellation of the project at any point of time, all the assets and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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