DEB Nod for $125 Million ADB Loan for VCIC.

The industries department has got a shot in the arm with the Department of Economic Affairs (DEA) of the Finance Ministry approving availing a loan of US $125 million from Asian Development Bank for grounding Visakhapatnam-Chennai Industrial Corridor (VCIC).

This will be in addition to US$ 500 million already cleared by the ADB as a retroactive credit.

The screening committee of the DEA has cleared the US $125 loan from ADB recently which would be in the form of budget support for implementation of policy reforms.

The VCIC has been conceived with an investment of Rs. 1 lakh crore and the government expects that once it is in place it would have the potential of providing more than 50,000 jobs both directly and indirectly in the first phase itself. The entire project is proposed to be implemented in two to three phases spanning more than 15 years. The ADB has projected that manufacturing output would reach Rs. 3 lakh crore by 2025 and Rs. 7.8 lakh crore by 2035.

According to sources in the industry department, clearance for US $125 million would enhance the prospects of early grounding of the infrastructure project. The ADB has already cleared a loan of US $500 million which would be in the form of a retro active credit. This means that works could be grounded in anticipation of loan.

In fact the AP government was initially in consultation with ADB for US $200 but finally got clearance for US $125 million. Sources said that US $625 million (US $500 million + US $125 million) would be utilised for infrastructure projects in Vizag-Kakinada, Gangavaram-Kankipadu and Yerpedu-Srikalahasti nodes on Visakhapatnam-Chennai coastline extending for more than 950 km. In this corridor major industrial units relating to power and roads among others are expected to come up.

Another interesting aspect is that Amaravati is being proposed to be linked to Gangavaram-Kankipadu node. This means that some of the infrastructure projects of Amaravati may have access to ADB funds but it appears it is in an early stage. If the proposal gets accepted by the ADB, Amaravati could have a share in the ADB pie, sources said.


THE NEW INDIAN EXPRESS