Big Strides, Bigger Goals: Key initiatives and opportunities in infrastructure development in Gujarat

Key initiatives and opportunities in infrastructure development in Gujarat

In the past couple of years, Gujarat has maintained its position of being one of the best performing states in the country. The state’s major and non-major ports accounted for around 40 per cent of the total traffic at Indian ports during 2017-18. In the power sector, Gujarat has emerged as one of the few power-surplus states with over 30 GW of installed capacity, and was among the best in terms of operational and financial performance of its discoms. It was also a front runner in renewable energy project development owing to high resource availability and favourable policies.

The state’s city gas distribution segment has made rapid strides with the development of over 26,000 km of pipelines passing through 25 districts. It has also been a top performing state in the telecom sector with 27.3 million internet subscribers. In the aviation sector, the state has 17 operational airports and airstrips with two international airports. With respect to rail connectivity, 36 per cent of the upcoming dedicated freight corridor’s length lies in Gujarat. Besides, it has 156,177 km of well-surfaced roads providing seamless road connectivity.

The key to Gujarat’s success has been the government’s proactive approach towards promoting emerging sectors and identifying gaps in infrastructure policies. However, challenges such as sluggish clearances, tedious land acquisition processes, lack of availability of right of way, etc., continue to persist despite targeted efforts through various central and state schemes. The issues notwithstanding, the next few years are likely to see the completion of some big-ticket projects including the GIFT City, the country’s first greenfield smart city (Rs 11.57 billion for Phase I); the Delhi-Mumbai industrial corridor ($100 billion); and the Ahmedabad-Mumbai high speed rail ($9 billion).

Port infrastructure: Propelling India’s maritime vision

The state is endowed with a long coastline of approximately 1,600 km, comprising about one-sixth of the country’s total coastline. Its port infrastructure comprises one major port and 46 non-major ports. Of the non-major ports, 20 handle cargo and the remaining 26 are used for fishing activities and have almost no traffic. The ports can collectively handle 480 million tonnes (mt) of cargo, accounting for a 40 per cent share of the country’s maritime traffic.

Gujarat is the only state to have three liquefied natural gas terminals, which are located at Dahej, Hazira and Mundra. Besides, the country’s largest private port at Mundra, also located in the state, handled 200 mt of cargo traffic during 2018-19. Further, it is the only state working on a “cradle-to-grave” concept for ships. It has an approximately 60 per cent share of the country’s shipbuilding order book and is also home to the world’s largest ship recycling yard at Alang. Further, in view of the current order book, Gujarat is expected to emerge as a new shipbuilding destination in South Asia.

In line with the Ministry of Shipping’s efforts to increase the share of coastal shipping, the state government inaugurated Phase I of the Ghogha-Dahej roll-on, roll-off ferry service in October 2017. Following this, the Ghogha-Dahej roll-on, roll-off passenger (ro-pax) service commenced in November 2018. In a bid to give a further impetus to infrastructure development, the state government has plans to develop more ro-pax terminals, such as those for the Port Victor-Hazira, Hazira-Mumbai, Mandvi-Okha, Ghogha-Hazira, Porbandar-Mumbai and Kuvay (near Mundra)-Rozi (Jamnagar) stretches.

With regard to greenfield ports, the state has proposed the development of two multipurpose, all-weather ports at Vansi Borsi and Mithivirdi, at a cost of Rs 40 billion and 25 billion respectively. The ports will have direct berthing facilities and a draught of 13-15 metres.

Energy infrastructure: Pioneer in tapping unconventional energy sources

Gujarat’s power sector has grown by leaps and bounds. With an installed capacity of over 30 GW, it is one of the few power-surplus states in the country. Moreover, it is the only state to have a gas grid across all major districts.

Various initiatives have been taken to tap its renewable energy potential. Today, it accounts for about 8 per cent of the country’s total installed solar power capacity. The Gujarat government developed a state-of-the-art solar park at Charanka, becoming the first state in the country to develop such a solar park. The park has a potential of 850 MW, of which 700 MW is already operational. The state also has a strong base of wind turbine and equipment manufacturers. Further, the country’s first offshore wind project is being developed in Gujarat, off the coast of Pipavav port. The project has the capacity to generate 1,000 MW of power and is being jointly developed by the Ministry of New and Renewable Energy and the Gujarat government.

Overall, in the total renewable capacity mix, solar and wind account for major shares, with wind exceeding 5,600 MW and solar 1,680 MW, as of April 2019.

Urban infrastructure: Making cities smart

Gujarat has a 79,633 km long canal network (major, medium and minor). Its irrigable area increased by 65 per cent from 3.8 million hectares in 2001 to 6.2 million hectares in 2016.

The state has initiated the development of a 100 million litre per day (mld) desalination plant at Dahej. The project is expected to entail an investment of Rs 13.86 billion. In addition, desalination plants have been planned to be taken up for implementation in the Kachchh and Bhavnagar districts. These plants will have a combined capacity of 200 mld and will be developed at an estimated cost of Rs 15.45 billion.

Besides, six cities in Gujarat – Ahmedabad, Vadodara, Surat, Rajkot, Dahod and Gandhinagar – have been selected under different rounds of the Smart Cities Mission. Projects in these cities are currently at various stages of implementation.

Information infrastructure: Acing the telecom game

Gujarat is a key telecom circle owing to robust infrastructure and strong service uptake by users. With around 27.3 million internet subscribers, the state has also been one of the top performing circles for most telecom operators. Public places across 55 cities have been covered under the urban Wi-Fi initiative.

To further strengthen its telecom base, the state government launched a common service portal – Digital Gujarat Portal – to provide a one-stop solution for all government-to-citizen services. The portal provides access to 113 government services and 40 government services can be accessed via a mobile app. Besides, Gujarat Fibre Grid Network Limited has initiated the process of laying a fibre network of about 35,000 km across 7,522 villages in the state.

Industrial infrastructure: Strengthening industrial nodes

Gujarat has emerged as an important economic and industrial hub. The state government has been focusing on developing world-class infrastructure to aid industrial development. In order to promote micro, small and medium enterprises, the government has introduced a special mechanism for the establishment of industrial estates of the Gujarat Industrial Development Corporation (GIDC) on government wasteland.

The state government has also laid emphasis on developing special investment regions (SIR) to promote industrial development. The key ones being developed are the Mandal Becharaji SIR; the Japan Industrial Township at Sanand III (Khoraj); the Petroleum, Chemical and Petrochemical Investment Region at Dahej; and the Dholera SIR. In addition, the central government is developing three coastal economic zones in Gujarat and has identified six sites (Kandla, Mundra, Pipavav, Sikka, Dahej and Hazira) under Phase I of the Sagarmala programme.

Next steps

The outlook for the infrastructure sector appears bright in Gujarat. In addition to sectors such as ports, roads and railways, the state has also laid equal emphasis on the development of social sectors such as education and health.

Going forward, Gujarat aims to maintain its position as one of the leading states in the country. With an abundance of infrastructure projects on the anvil, it offers significant opportunities across different sectors. It is an attractive investment destination for potential investors and is expected to witness rapid development in the coming years. w

Based on a presentation by D. Thara, Vice Chairperson and Managing Director, GIDC, at the India Infrastructure Forum 2019