Madhya Pradesh: Means Business

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Madhya Pradesh Means Business
Power
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Overview
Overview
Madhya Pradesh (MP) State that means business

• MP is the second largest State in the Country
  stretching over 308,000 sq kms.
• The State is blessed with large mineral resources
  of coal, diamond, limestone, methane etc.
• MP is among the top 4 states of the Country for
  industrial investments.

Economic Snapshot
Madhya Pradesh is emerging as a key growth center
for the Country

• Per capita GSDP USD 369
• Manufacturing sector USD 8.5 bn
• (Registered Unregistered)

• Gross state domestic product (GSDP) USD
  23,983.63 Mn
• Average growth rate 5.5 per annum

Advantage MP
Madhya Pradesh has one of the upcoming industrial
base in India

• The State is centrally located
• Investor friendly Government policies

• Total electricity generation capacity
  6,449.25 MW
• Indias first greenfield SEZ
  Indore SEZ
• Industrial Centers 8

Power
Electricity generation capacity at present is
6,449.25 MW and estimated to rise to a surplus in
2008-09

• MP is rich in low grade coal suitable for power
  generation.
• Potential of hydro-energy generation.
• Installed power capacity (MPs share)
• Hydel Power Generation 852.7 MW
• Thermal Power Generation 2,147.5 MW

Ministry of Power (powermin.nic.in)
Source Indiastat.com (as on 23 Feb 2006)
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Enabling Infrastructure

• The State is well connected with the rest of
  India with almost 425 trains passing through the
  State on a daily basis. Of these 175 trains pass
  through the State capital Bhopal alone.

MP IS CENTRALLY LOCATED AND WELL CONNECTED WITH
ALL MAJOR CITIES IN INDIA
RAILWAY NETWORK

• 25 airstrips.
• Convenient air links from key Indian cities like
  Delhi Mumbai to Bhopal, Jabalpur, Gwalior,
  Indore and Khajuraho.
• 5 operational airports.
• Indore airport has the capability of handling
  international cargo.
• An international airport proposed in Bhopal.

GWALIOR
KHAJURAHO
AIRPORTS
INDORE
BHOPAL
JABALPUR

• The total length of roads spanning MP is 67,600
  kms.
• National highways of 5,200 kms run through the
  State.
• 18 National highways including trunk routes of
  Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore,
  Delhi- Hyderabad.
• The total length of State highways in the State
  is 9,885 kms.
• Convenient linkages to western ports i.e. Kandla
  Port, Jawahar Nehru Port Trust.

ROAD NETWORK
Source Department of Road Transport Shipping
(morth.nic.in)
Source www.destinationmadhyapradesh.com
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Madhya Pradesh A Preferred Investment Destination
31 of the State under forest cover with a
largely unexploited species of rare, valuable
medicinal- herbal plants
Over 2,000 kms of roads being developed with
Private Partnership (BOT)
Offers diverse tourists destinations catering to
various segments of tourism such as religious
(Bhojpur), eco/ adventure (Panchmari), heritage
(Sanchi, Khajuraho) tourism etc.
Indias 1st operational Greenfield SEZ at Indore
Third largest producer of cement in India
Over 100 agricultural farms with an area of over
20,000 acres is available on lease to investor
Favourable climatic conditions for cotton and
over 40,000 power-looms are driving the textile
industry
Various blocks available for power, cement, iron
and steel units
Largest producer of pulses and oilseeds in the
Country (75 of soyabean production)
Over 18,000 technical graduates and 230,000
graduates add to workforce each year
12 blocks with reserves totalling 2,585 million
tons of coal has been identified
Over 144 BCM of coal bed methane reserves
available
Availability of coal and natural gas (G.A.I.L
pipeline) along with support from Government to
make investment in Thermal Power Plants lucrative
Source www.mpsidc.org Brochure MP Means
Business
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MP The Right Place with the Right Environment
Savings in Office Space Rates (A comparison of
rates in Central Business Districts)
DESTINATION MADHYA PRADESH
Fastest mover in overall performance among the
big States in the Country.
Fastest mover in agriculture
Fastest mover in infrastructure development.
Bhopal and Indore have substantial cost
advantages, even when compared to other Tier III
and IV cities.
Savings in Land Cost
Ranks 2nd in terms of governance.
(Estimated Values for Multi-product SEZs)
Ranks 3rd in terms of law order
Cost of skilled labour is USD 2.4/day vis-a-vis
USD 3.5 USD 4.0/day in metros
The cost of land is one of the lowest in the
Country. Even central hubs such as Indore and
Bhopal fare well against other cities in terms of
low land cost.
MP is centrally located. The State is at an easy
distance from all the key consumer markets in the
Country.
Fastest mover is the State where the rate of
improvement between 2003 2006 was greater than
that between 1991 2003
Source (Reference RK Swamy)
- Distances rounded off
Source India Today (September 06 Issue)
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Industrial Policy Catalyst for the Investments

• The Government of MP has devised an investor
  friendly industrial policy, which is aimed at
  achieving global competitiveness. The policy
  emphasizes on industrial growth in the state
  through adopting cluster approach, establishing
  specialized infrastructure and offering
  favourable incentives.
• The main thrust of this policy is
• Establishment of a Madhya Pradesh Trade and
  Investment Facilitation Corporation which would
  take decisions about rationalization of taxes,
  facilities of mega projects and other related
  matters.
• Enacting an Industrial Facilitation Act and to
  change the rules of business with a view to make
  single window system decisive and result
  oriented.
• Developing infrastructure for supporting the
  identified industrial clusters
• Reviving closed down/ sick industrial units by
  granting special packages.
• Attractive incentive schemes.

SPECIAL INCENTIVES

• Special package for Mega Projects on project
  basis by apex level investment promotion
  empowered committee headed by the Chief Minister.
• Industrial investment promotion assistance 50
  to 75 of commercial tax for 3-10 years
• Concessional registration charges and stamp duty
  exemption for Term Loans.
• Interest subsidy on term loan for 5 years _at_ 3
  to 5.
• For thrust sector industries, 25 capital subsidy
  would be provided limiting up to a maximum of USD
  56,000
• Land on 75 concessive rate for Mega Projects
  limited to USD 4.4 million.
• Entry tax exemption for 5 years.
• 5 years electricity duty exemption on captive
  power generation
• 15 capital subsidy to SSI up to USD 33,000 in
  backward areas
• Infrastructure grant up to USD 0.22 million crore
  for developing private sector industrial parks
• Partial reimbursement for Project report, ISO
  Certification, Patent and Technology Purchase cost

• CLUSTER APPROACH
• Indore Pharmaceutical, Textile, Food
  Processing, IT, Auto Components
• Bhopal Engineering, Biotechnology, Herbal, IT,
  Food Processing
• Jabalpur Garment, Mineral, Forest Herbal,
  Food Processing
• Gwalior Electronics, IT, FMCG, Engineering,
  Food Processing
• Rewa Refractories, Lime Stone, Forest Based
• Sagar Mineral Processing

SPECIALIZED INFRASTRUCTURE
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Doing Business Made Easy Through MPAKVN
In a bid to build a competitive environment
industries and their ancillaries would be
promoted in clusters based on the availability of
raw materials, skilled labour and market
potential. Under this Industrial Policy through
Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd
(MPAKVNs) scheme, the State Government, has
identified industrial clusters. Many of the
industrial giants have their establishments in
these areas, however 44 of developed area is
still untapped and open for investment.
Area Developed 2,262 Hectares Allotted 800
Hectares Units established 326 Major Groups JK,
Surya Roshini, Godrej, Grasim, Cadbury, Hotline,
Crompton Greaves Special Infrastructure ICD,
Food Park
Area Developed 273 Hectares Allotted 115
Hectares Units established 121 Major Groups
Birla, Jaypee Special Infrastructure Integrated
infrastructure development centres (IIDC)
Area Developed 790 Hectares Allotted 125
Hectares Units established 52 Major Groups
Raymond, Hindustan Petroleum, PBM, Ayur Special
Infrastructure Stone Park, Food Park
Area Developed 1,330 Hectares Allotted 618
Hectares Units established 286 Major GroupsHEG,
Crompton Greaves, PG, Godrej, Lupin, IFB, Oswal,
Nahar Special Infrastructure ICD, Food Park
BHOPAL AKVN
GWALIOR AKVN
JABALPUR AKVN
REWA AKVN
Area Developed 2,492 Hectares Allotted 1431
Hectares Units established 575 Major Groups
Tata, Ranbaxy, Eicher, Bridgestone, Hindustan
Motors, Kinetic, SRF, S Kumars, Gajra, Nicholas
Piramal, Indorama, IPCA, Bhilwara Special
Infrastructure SEZ, Crystal IT Park, Food Park,
Apparel Park
Malanpur, Malanpur Phase II, Banmore, Chainpura,
Siddhgawan, Pratappura
Rewa, Waidhan
INDORE AKVN
Mandideep, Pillukhedi, Mandideep Phase II
Borgaon, Maneri, Purena
Pithampur, Kheda, Dewas, Maksi, Megh Nagar
Source MPSIDC
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Power Industry in Madhya Pradesh
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Sector Profile Power
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Power Backbone of Indian Economy
Energy Generation Bn KWh 2005
Fact Sheet

• Indias power industry is growing faster as
  compared to most of the other countries. In the
  last decade with substantial capacity addition,
  India has moved to 5th rank from 8th in terms of
  generation capacity globally.
• The country has installed generation capacity of
  126 GW as on July 2006 , and a transmission
  distribution network of more than 6.3 million
  circuit kms (2004).
• India consumes about 3.7 of the worlds
  commercial energy and is ranked 5th largest
  consumer of energy in the world.
• Indias power generation is largely coal
  dependent with 55 share in the total capacity
  mix.
• With Indias booming economy and vibrant
  industrial scenario, per capita consumption of
  power had almost doubled from 350 units in 1998
  to over 600 units in 2005 and is further expected
  to reach 1000 units in 2012. (source IBEF)
• With the targeted GDP growth rate of over 8,
  energy demand is expected to grow at the rate of
  5.2 annually. To support this the power supply
  of the country needs to be augmented by 10
  annually.
• The mismatch in energy demand and supply in the
  country had resulted in the increased energy
  shortage from 27 BU in 1995 to 80 BU in 2005.
• Peak demand is expected to increase by 77 to
  157,107 MW by 2012. Also the energy requirement
  is expected to increase by 274 to 975,222 MU by
  2012.

Primary Energy Consumption
mtoe
3rd Largest Consumer in Terms of Energy Demand
Installed Capacity Mix
Source IBEF Report, Ministry of Power (CEA)
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Indias Power Sector - Opportunities Abound
Opportunities for Private Investors

• The Government envisages to provide power to all
  the households under its ambitious plan
  Electricity for all villages by 2007 and
  Power for all by 2012. The mission aims at
  enhancing the installed capacity upto 200,000 MW
  by 2012, accompanied by an increase in
  transmission and distribution network.
• The investment required in this regard in the
  sector is estimated to be over USD 200 bn. Almost
  50 of this amount would be required for
  generation projects alone. The scale of
  investment required in power sector along with
  the need of advanced technical inputs, has carved
  out a significant role for private players in
  power sector.
• Nearly 5000 MW has already been added by the
  private sector under the 10th five year plan. It
  is expected to contribute 11,912 MW during the
  11th plan from 2007-12.
• Government has initiated a string of reforms by
  enactment of Electricity Act, 2003 to attract
  foreign and private investment in the power
  sector. From allowing FDI upto 100 via the
  automatic route in all the segments (generation,
  transmission and retail distribution), to
  extending tax holiday for mega power projects,
  the government is keen to create an investors
  friendly environment.

Generation Share Mix
Generation Share Mix
Capacity Addition Plan Period
Given the projected demand scenario coupled with
favorable investment policies, the sector offers
huge opportunities for foreign and private
players.
Source Ministry of Power (CEA)
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Key Policy Initiatives
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MP The Power House of India

• Overview
• M.P. has nearly 5 of the total installed
  capacity of India with 6449.25 MW as on July 2006
  including the Central, State and private sector.
  The sources of power generation in the State
  includes thermal, hydel, wind power, methane gas
  etc.
• The States share in the installed capacity was
  about 3000.2 MW in the year 2005-06. Out of which
  72 is thermal power and remaining is hydel
  power.
• The total energy availability in the State has
  increased from 26,606 MUs to 29,237 MUs during
  2001-02 to 2005-06 at a CAGR of 2.68, wherein
  power purchase of the State has outgrown the own
  generation of the State.
• The State is witnessing rapid industrialisation
  which would lead to very high increase in energy
  demand in coming years. Further, the installed
  capacity is also expected to increase in the
  coming years, with new projects coming in the
  State.
• The State Government has taken necessary policy
  initiatives to facilitate the power sector
  reforms in the State.

Installed Capacity of Power in M.P. (M.P.s share)
Energy Shortages Peak Deficit in M.P.
The increasing energy shortages and peak deficit
indicates a need for rapid increase in power
generation capacity of the State. Further, the
new Government reforms, and presence of necessary
resources makes the power sector very attractive
for the private investors to set-up their plants
in the state.
Source Annual Report (MPERC)- Tariff petition
2006, Ministry of Power
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MP Power House of India

• Agriculture sector is one of the main energy
  consumers in the State. The HT consumers such as
  railway traction, coal mines, HT industrial and
  non-industrial activities etc. together accounted
  for 6549 MU of sales followed by domestic
  consumers in the year 2005-06.
• The State has various organisations (mostly
  public undertakings) in the areas of power
  generation, transmission and distribution. These
  organisations are presented in the schematic
  below.
• The Private sector has a very insignificant
  presence as of now with their major presence only
  in non-renewable resources and captive plants.
  However, various major companies are
  contemplating to set-up their units in M.P.

Category-wise Energy Consumption in M.P.

HT Consumers include traction, coal mines,
industrial, irrigation, township, residential etc
Source Annual Report (MPERC)- Tariff petition
2006
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Location Analysis

• The State has following power generation units

Power Generation Stations in M.P.
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Advantage MP
M.P. Offers following Advantages to Power Industry
Potential to be Energy Hub for Power Generation
Established Infrastructure
Government Support
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MP An Investment Destination
With the growing industrialisation in the State
along with the Rural Electrification Programme
initiated by the Government, the demand for
electricity would increase manifolds in the State.
Industry Drivers in M.P.
Energy Demand Projections in MP

• The demand for energy in the State is estimated
  to increase by 45 by the year 2011-12.
• M.P. is likely to face the energy deficit in the
  next five years and its energy deficit in 2011-12
  is expected to be as high as 10.5 (source
  MPSEB)
• The natural resources available in M.P such as
  thermal, hydel, wind power and coal bed methane
  has the potential to generate 15000 MW of power
  in next 5-10 years.

An increase of 45 is projected by 2011-12
Government Initiatives

• The thermal and hydel power plants set-up in the
  State will receive incentives from the Central as
  well as State Government (mentioned in prior
  slide).
• The State Government offers various incentives
  for organisations installing power generation
  unit utilising non-conventional feed stocks.
  These incentives include electricity duty
  exemption, sales tax benefits, land incentives
  etc. These investors have the option of using the
  power themselves as captive power and selling it
  to the MPEB _at_ USD 0.05 per unit (source MPERC)
• Government also provides incentives for
  setting-up captive plants in the State.

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MP An Investment Destination
Major private players such as Reliance, Essar and
Jaypee Group have acknowledged the potential of
M.P. and have proposed investment plans in the
State.
Ultra Mega Project in M.P.

• The central government is setting up Ultra Mega
  Power Projects 5 locations in the country.
• The project is first initiated in MP and is at an
  advanced stage of establishment.
• Sasan in M.P., a pithead location based on
  domestic coal availability (while other proposed
  plants would be imported fuel based) is
  identified for setting up this project.
• It is a large project of 4000 MW at a single
  location thereby ensuring economies of scale.
• Project would require an investment of about USD
  3.3 billion.
• The project would utilize super critical
  technology to ensure higher efficiency and lower
  CO2 emissions
• The projects would be awarded to developer
  through tariff based competitive bidding to
  ensure cheaper power.

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MP Way Forward
With the increasing demand for power in the State
and States objective to provide power to all by
the year 2008, there lies several opportunities
for public-private partnership in the sector.
Opportunities across the value-chain
Power Transmission
Power Trading Distribution
Power Generation

• Power generation plants based on
• Coal reserves
• Hydel power
• Biomass
• Coal bed methane
• Wind

• The Transmission could be taken through Joint
  Venture or Independent Private Transmission
  Company (ITPC) route.
• 400 KV Bina-Nagda-Dehgam D/C line in Western
  Region has been taken up as a pilot project by
  POWERGRID and would be awarded to private party
  soon.

• This activity could be taken independently or
  under joint venture by private players under
  public-private partnership in the State.

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Connecting Further
Madhya Pradesh State Electricity Board
www.mp.nic.in/energy/mpseb
Madhya Pradesh Electricity Regulatory Commission
www. www.mperc.org
www.mptransco.nic.in
Madhya Pradesh Power Transmission Corporation
Ltd.
www.mppkvvcl.nic.in
Madhya Pradesh Paschim Kshetra Vidyut Vitran
Company Ltd.
www.mpmkvvcl.nic.in
Madhya Pradesh Madhya Kshetra Vidyut Vitran
Company Ltd.
www.mpez-electricity-discom.nic.in/
Madhya Pradesh Poorv Kshetra Vidyut Vitran
Company Ltd.
www.mprenewable.org
Madhya Pradesh Urja Vikas Nigam Ltd.
www.mpsidc.com
Madhya Pradesh State Industrial Development
Corporation
www.mpgovt.nic.in
Government of Madhya Pradesh