Each new city on Delhi-Mumbai Industrial Corridor needs Rs 2,500 cr upfront

The seven futuristic cities being planned along the Delhi-Mumbai Industrial Corridor would require Rs 18,500 cr of initial funding.

By Amiti Sen, ET Bureau | Updated: May 21, 2011, 12.35 AM IST

NEW DELHI: The seven futuristic cities being planned along the Delhi-Mumbai Industrial Corridor would require Rs 18,500 crore of initial funding from the government, according to a note prepared by the Department of Industrial Policy & Promotion.

The government aims to develop the new cities, called nodes, as an answer to China's manufacturing prowess. "We are awaiting final comments of the finance ministry following which, we will place the note before the Union Cabinet for approval," a government official told ET on condition of anonymity.

The 1,500 km-long Delhi-Mumbai Industrial Corridor would run across Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Gujarat and Maharashtra.

Built along the lines of model industrial cities in China and South Korea, each node would need at least Rs 2,500 crore of launch capital, the note said. This money would be used over five years to develop the trunk infrastructure before the government invites private investments.

Another Rs 1,000 crore would be required as project development fund for floating bids and other purposes. The cities would have world-class residential facilities, centrally integrated civic services and an integrated public transport system.

"While it is a public-private partnership project, the government has to make some investments to make the cities attractive for the private sector," the official said.

Such investments are mostly for developing infrastructure like internal and arterial roads, solid waste disposal system, storm water drainage, bus and rail transport, flood management and landscaping. The government would have to attract private investments between Rs 60,000 crore and Rs 70,000 crore for building each city, the official said.

Funding from the Centre would be in the form of debt and equity, which would be ploughed into the Delhi Mumbai Industrial Corridor Development Corporation Limited. The corporation is a joint venture between the government, Infrastructure Leasing & Financial Services Limited and Infrastructure Development Finance Company Limited.

The cities would be developed around the industrial nodes of Kushkhera-Bhiwadi-Neemrana in Rajasthan; Dadri-Noida-Ghaziabad in Uttar Pradesh; Bharuch-Dahej in Gujarat; Igatpuri-Nashik-Sinnar in Maharashtra and Pitampura-Dhar-Mhow in Madhya Pradesh.

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