List of Exhibits 4

Preamble 5

List of Abbreviations

6

Andhra Pradesh Infrastructure Mission

7

Laying the Foundation for the Sunrise State of Andhra Pradesh

7

Mission Objectives

8

Mission Functions

8

Andhra Pradesh Infrastructure Mission Structure

8

Targets 11

Shifting the Growth Trajectory 11

Defining Developed Economies 11

Economic Targets from Andhra Pradesh Vision 2029 11

Structural Transformation of the Economy 12

Transformation Catalysts 13

Missions Mode - A Game Changing and Holistic Approach 13

Five Campaigns 14

Approach and Strategy 19

Role of Infrastructure 19

Multiplier Effects and Benefits of Infrastructure Investments 20

Infrastructure Development for Port led Logistics and Corridor Based Manufacturing

21

Core Sectors for Port Led Development: Logistics Hubs

23

Strategic Location of Andhra Pradesh

23

Thrust Sectors

26

Sector Snapshots

27

Enablers 49

Lifecycle Approach towards Infrastructure Development

49

Resources

55

Resource Augmentation

55

Risk Optimization 57

Bibliography 58

Key Contacts 60

Contents List of Exhibits

Exhibit 1: Sunrise State of Andhra Pradesh: Key Milestones

Exhibit 2: Structure of the Andhra Pradesh Infrastructure Mission

Exhibit 3: Per Capital Income (Comparative Scenarios)

Exhibit 4: An Accelerated Growth Scenario

Exhibit 5: Sectoral Share of Andhra Pradesh GSDP

Exhibit 6: Integrated Functioning of the Transformational Catalysts

Exhibit 7: Infrastructure in China – Driving Sustainable Growth

Exhibit 8: Singapore - Asia's Global Logistics Hub

Exhibit 9: Industrial Innovation in Taiwan – Asia's Silicon Island

Exhibit 10: Integrated Approach towards Port Led Development

Exhibit 11: Phased Strategy for Infrastructure Development

Exhibit 12: Summary of Targets

Exhibit 13: Performance Management and Delivery Unit (PEMANDU) – A Radical &

Transformational Approach by Malaysia

Exhibit 14: Sector-wise Investment Outlay

Exhibit 15: Tamil Nadu Infrastructure Finance Company (TNIFMC)

Exhibit 16: Growth of Private Sector in the Total Infrastructure Outlay

Exhibit 17: Framework for Optimization of Risk Sharing

Preamble

Andhra Pradesh has set its target to become one of the top three states in India by

2022 and achieve the status of a developed state in the country by 2029, and this

vision is to lay the foundation of the Sunrise State of Andhra Pradesh. The Vision

2029 hopes to impact the lives of every citizen in the State, enriching and

transforming it through well coordinated small, large and mega scale development

programmes, executed as part of one of its seven development focused missions. Of

the seven Missions, the Infrastructure Mission aims for the creation of a well-

planned and seamlessly integrated infrastructure within the State to realise the

objectives of Vision 2029. The 'Infrastructure Mission' will be guided by the Hon'ble

Chief Minister's vision to create world class infrastructure across the industrial and

social sectors, provide excellent global and domestic connectivity and augment the

State's power generation capacity. The Mission commits to carrying out the planned

activities in an efficient and sustainable manner, according utmost respect and

importance to environmental preservation and ecological balance. The

Infrastructure Mission, along with the other six Missions, shall work harmoniously

towards realising the single goal of enabling Andhra Pradesh to claim its destiny by

2029 and to foster a common identity among the people of the State, and endeavour

to realise collective and individual aspirations, dreams and destinies, for its people,

for the country, and for posterity.”

List of Abbreviations

ADB Asian Development Bank

AfDB African Development Board

AT&C Aggregate Technical & Commercial

AP Andhra Pradesh

APGDC Andhra Pradesh Gas Distribu�on Corpora�on

APIM Andhra Pradesh Infrastructure Mission

APMB Andhra Pradesh Mari�me Board

APGENCO Andhra Pradesh Power Genera�on Company Limited

APDISCOMs Andhra Pradesh Power Distribu�on Company

APSEZ Andhra Pradesh Special Economic zone

AH Asian Highway

BPD Barrels per Day

Bn Billion

BCM Billion Cubic Meter

BCM Billion Cubic Meter

BU Billion Units

CBIC Chennai Bangalore Industrial Corridor

CGD City Gas Distribu�on

CAGR Compound Annual Growth Rate

DDG Decentralized Distributed Genera�on

EPZ Export Promo�on Zone

FSRU Floa�ng Storage and Regasifica�on Unit

GAIL Gas Authority of India Limited

GIS Geographic Informa�on System

Gbps Gigabits per second

GOI Government of India

G2B Government to Business

G2C Government to Consumer

GDP Gross Domes�c Product

GNI Gross Na�onal Income

GSDP Gross State Domes�c Product

GIDB Gujarat Infrastructure Development Board

HDI Human Development Index

IT Informa�on Technology Investment Region

ITIR Informa�on Technology Investment Region

INCAP Infrastructure Corpora�on of Andhra Pradesh

ISLs Integrated Sanitary Latrines

ITDA Integrated tribal Development Agency

ICAO Interna�onal Civil Avia�on Organiza�on

JETRO Japan External Trade Organisa�on

JICA Japan Interna�onal Coopera�on Agency

KSEZ Kakinada Special Economic Zone

kWh Kilowa�-hour

KG Krishna-Godavari

LNG Liquefied Natural Gas

LPG Liquefied Natural Gas

MRO Maintenance, Repair and Opera�ons

MIS Management Informa�on System

MSME Micro Small and Medium Enterprises

MDG Millennium Development Goals

MMSCMD Million Metric Standard Cubic Feet per Day

MT Million Tonnes

MTPA Million Tonnes per Annum

MU Million Units

MSU Mission Support Unit

NH Na�onal Highway

NHDP Na�onal Highways Development Programme

NIMZ Na�onal Investment and Manufacturing Zone

NOFN Na�onal Op�c Fibre Network

NTPC Na�onal Thermal Power Corpora�on

NTDPC Na�onal Transport Development Policy Commi�ee

NW Na�onal Waterways

PHP Peak Hour Passenger

PEMANDU Performance Management and Delivery Unit

POL Petroleum Oil and Lubricants

PCPIR Petroleum, Chemicals and Petrochemicals Investment Region

PNG Pressurised Natural Gas

PERT Programme Evalua�on and Review Technique

PPP Public Private Partnership

RVEP Remote Village Electrifica�on Programme

Rs. Rupees

SHG Self Help Group

SEZ Special Economic Zone

SIR Special Investment Regions

Sq. Km. Square Kilometer

SLDC State Load Dispatch Centre

TNIDB Tamil Nadu Infrastructure Development Board

TMCFT Thousand Million Cubic Feet

T&D Transmission and Distribu�on

TEU Twenty-foot Equivalent Unit

UNDP United Na�ons Development Programme

USD United States Dollar

USA United States of America

VCIC Vizag Chennai Industrial Corridor

WGC Water Grid Corpora�on

WAN Wide Area Network

WEF World Economic Forum

Milestones for the State

Chapter 1

Ÿ One of the three high-performing States in India

by 2022-23

Ÿ Best State in the country by 2029-30

Ÿ A leading investment destination in the world

by 2050-51

Andhra Pradesh Infrastructure Mission (APIM) would

streamline the efforts of the government

towards creation of infrastructural assets in a time

bound manner with set targets and monitorable

outcomes.

29

Andhra Pradesh Infrastructure MissionUnder the leadership of the Hon'ble Chief Minister

Shri Nara Chandra Babu Naidu, the Government of

A n d h r a P r a d e s h h a s c o n c e p t u a l i s e d a

comprehensive long term vision to fulfill its goal of

bringing about the State's socio-economic

development in an accelerated and sustainable

manner.

The Sunrise State of Andhra Pradesh has set itself

an ambitious and bold vision. The objective is to

transform from the status quo to a dynamic and

thriving Andhra Pradesh where the fulcrum of

development is the people of Andhra Pradesh. The

Government of Andhra Pradesh envisions a

Sunshine State where opportunities to achieve

prosperity and well being are abound with people

enjoying a high quality of life and happiness.

Laying the Foundation for the Sunrise State of Andhra

Pradesh

Vision 2029 charts out an ambitious path for

Andhra Pradesh to be amongst the top three States

in India by 2022 and a developed state measured in

terms of citizen life satisfaction and Happiness

Index by 2029. Come 2050, the Sunrise State of

Andhra Pradesh aims to be among one of the most

prominent investment destinations in the world.

The Government is conscious of the challenges

ahead and therefore has set measurable targets to

achieve the vision outcomes. Further, the Hon'ble

Chief Minister has charted out a multi-pronged

strategy comprising seven Mission, five Grids, five

Campaigns, Janmaboomi programme and the

Smart Village programme to work towards the

common vision.

Year Target

2022-23 One of the three high-performing States in India by 2022

2029 Best State in the country by 2029

2050

A leading investment des�na�on in the world

Exhibit 1: Sunrise State of Andhra Pradesh: Key Milestones

The 'Infrastructure Mission' will be guided by the

Hon'ble Chief Minister's vision to create world class

infrastructure across the industrial and social

sectors, provide excellent global and domestic

connectivity and augment the State's energy

capacity. The Mission commits to carrying out the

planned activities in an efficient and sustainable

manner, according utmost respect and importance

to environmental preservation and ecological

balance. The Infrastructure Mission, along with the

other six Missions, shall work harmoniously

towards realising a single goal of enabling Andhra

Pradesh claim its destiny as a top investment

destination in the world and endeavour to realise

collective and individual aspirations, dreams and

destinies, for its people, for the country, and for

posterity.In this context, the Andhra Pradesh Infrastructure

Mission (APIM) would streamline the efforts of the

government towards creation of infrastructural

assets in a time bound manner with set targets and

measurable outcomes.

The APIM would assist Departments in speedy

implementation of projects that require inter-

d e p a r t m e n t a l c o o r d i n a t i o n . T h e A P I M

presupposes that the various Government

Departments would continue to manage activities

across the life-cycle of infrastructure projects that

w o u l d i n c l u d e p r o j e c t i d e n t i fi c a t i o n ,

conceptualisation, preparation, development,

operations and monitoring. The thrust of the APIM

in consonance with the Vision 2029 is to assist the

concerned Departments on pre-identified, specific,

growth promoting, large social and economic

infrastructure projects , which require inter-

departmental synergy.

Mission Objectives

The Andhra Pradesh Infrastructure Mission has the

following key objectives:

Ÿ Assist in achieving the strategic outcomes as

enshrined in the Vision 2029

Ÿ Accelerate the development of core physical

and social infrastructure in the State

Ÿ Adopt a l i fe-cycle approach towards

development of infrastructure project

Ÿ Manage externalities and address inter-

departmental issues

Ÿ Enhance inter-departmental synergies to

multiply project outcomes and reduce time lag

Ÿ Seamlessly coordinate with other missions,

grids and programmes to enhance mission

outcomes

Ÿ Optimise public and private investments by

providing effective planning and delivery

mechanisms

Ÿ To build a confident ecosystem for catalysing

investments in infrastructure

Mission Functions

Ÿ Facilitating inter-departmental coordination

across the life-cycle of large infrastructure

projects

Ÿ Identification, scrutiny and appraisal of

projects

Ÿ Creating a shelf of bankable projects

Ÿ Institutional development and capacity

building

Ÿ S t r e a m l i n i n g p l a n n i n g a n d d e l i v e r y

mechanisms

Chairperson: Hon’ble Chief Minister

Vice Chair Person: Hon’ble Minister,

Roads & Buildings

Mission Support Unit (MSU)

Mission Coordinator: Secretary, Infrastructure

and Investments Department

Other Members: Principal Secretaries of

Department concerned and Subject Matter

Experts of national/international repute,

Programme Management and Monitoring

Expert, Remote Sensing, GIS, MIS Experts

Line Departments

Exhibit 2: Structure of the Andhra Pradesh Infrastructure Mission

Andhra Pradesh Infrastructure Mission Structure

Government Body

Sub - Missions

08Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 07

Chapter 2

Targets

Milestones Set by the State

The State is poised to become a developed state

by 2029-30 with a per capita nominal income in

excess of USD 12,746. A double digit growth rate

of 12 percent would be required to meet the

target of per capita income of USD 16,500 by

2029-30.

29 10Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 09

29

Shifting the Growth TrajectoryTo achieve the level of development envisioned in

the Vision 2029, the State will have to shift from the

current annual GSDP growth rate of 7 percent to a

higher trajectory of double digit growth rate. The

Government will stimulate growth in the keys

sectors.

Defining Developed Economies

Development typically refers to a state of relatively

high levels of economic growth and security. Some

of the most common criteria for evaluating a

country or region's degree of development are per

capita income or Gross Domestic Product (GDP),

level of industrialisation, general standard of living

and the amount of widespread infrastructure.

Increasingly, other non-economic factors are

included in evaluating an economy or country's

degree of development, such as the Human

Development Index (HDI).

Economic Targets from Andhra Pradesh Vision 2029

In terms of economic performance, the indicator

recognised globally to determine a developed

economy is the per capita income in excess of USD

12,746. The per capita income in Andhra Pradesh

would have to be in excess of INR 7.64 lakh (USD 1

= INR 60) for it to become a developed state.

Three per capita income scenarios have been

drawn for the State:

Ÿ Scenario I- A business as usual scenario: USD

9,000

Ÿ Scenario II-PCI meets minimum threshold:

USD 12,746

Ÿ Scenario III- An accelerated growth scenario:

USD 16,500

High level of GDP Per Capita + significant deree of

industrialisation

Advanced Countries

75 percentile in the Human Development Index (HDI) Distribution ~ life expectancy

+ education + standard of living

Developed Countries

GNI Per Capita of USD 12,746

High Income Countries

Exhibit 3: Per Capita Income (Comparative Scenarios)

Exhibit 4: An Accelerated Growth Scenario

Structural Transformation of the EconomyGiven that achievement of the Andhra Pradesh

Vision 2029 requires increasing the GDP from INR

2.96 lakh Crore (2014) to approximately INR16.25

lakh crore by 2029 (5.5 times increase over 15

years), the industrial sector is envisaged as a key

growth driver for the State. It is estimated that the

share of the industrial sector in total output would

significantly increase to 30 percent, from the

current level of around 23 percent. This translates

to an annual growth rate of over 14 percent for the

sector. Achievement of this target requires Andhra

Pradesh to position itself as a highly competitive

destination for industry, not only at the national

level, but also at regional and global levels. The

State has rich endowment of skilled labour, a long

coastline with high potential for port driven

logistics, and strong hinterland access (both

nationally, being connected to Central, East and

South India, and regionally, being at a strategic

position in the South Asian and South East Asian

spatial map).

Corresponding Growth Rate

Requirement (2029)

Sector Share in GSDP (2029)

Projected GSDP of Andhra Pradesh in

2029

16,24,714 Crore

Agriculture

10%

Agriculture

6.6%

Industry

30%

Industry

14.2%

Service

60%

Service

12.6%

Exhibit 5: Sectoral Share of Andhra Pradesh GSDP

Parameter Year 2012-13 Tenta�ve Target 2029-30

Per Capita Income (Current Prices) INR 84,000 Scenario I: INR 5.4 lakh

Scenario II: INR 7.64 lakh

Scenario III: INR 9.9 lakh

GSDP(Current Price) 2012-13 INR 4,19,391 crore Scenario I: INR 30.68 lakh crore

Scenario II: INR 43.31 lakh crore

Scenario III: INR 56.25 lakh crore

GSDP (Constant Price) 2012-13 INR 2,35,930 crore Scenario I: INR 8.86 lakh crore

Scenario II: INR 12.56 lakh crore

Scenario III: INR 16.24 lakh crore

Annual GSDP (constant price) Growth Rate

5.8% Scenario I: 8.1 %

Scenario II: 10.03%

Scenario III: 12.1%

Sector contribu�on (percentage of GSDP)

Services

INR1,30,469 (55.3%)

Industry INR

(21.5%)

Agriculture54,499(23.1%)

Services

(60%) Industry

(30%) Agriculture

(10%)

Popula�on (2012-13) 4.9 crore 5.68 crore

Sector 2012-13 (present) 2022-23 share 2029-30 share CAGR

Agriculture 23.1% 15% 10% 6.6%

Industry 21.1% 30% 30% 14.2%

Services 55.3% 55% 60% 12.6%

GSDP (Constant price) INR 2.26 lakh crore INR 7.34 lakh crore INR 16.26 lakh crore 12.02%

50,724

29 12Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 11

Increased Investment in Infrastructure

It is estimated that an Asset (net block) to GDP ratio

of 70 percent is required for sustainable provision

of services and facilitation of economic activities.

For India, this is estimated to be approximately 60

percent, compared to 71percent in Germany, 76

percent in China and 87 percent in South Africa.

Given the relatively higher contribution of

agriculture to total GSDP in Andhra Pradesh, the

net block of infrastructure is likely to be lesser than

the national average. In order to bridge the

investment gap and bring it to 70%, this

expenditure needs to increase significantly.

Applying this benchmark to Andhra Pradesh, with a

total estimated infrastructure net block at INR 1.56

l a k h c r o r e , i n c r e m e n t a l i n v e s t m e n t i n

infrastructure to the tune of INR 12.4 lakh crore is

required over the next fifteen years.

Transformation CatalystsMissions Mode - A Game Changing and Holistic

Approach

The Government realising the exigency for an

intensive development approach has constituted

seven Missions that would seamlessly work under

the guidance of the Hon'ble Chief Minister to

achieve vision outcomes with measurable targets.

The seven Missions will ensure bottom-up

planning and lay special emphasis on the

backward areas of the State to achieve equitable

growth and development. The Missions will act as

catalysts for attaining optimum levels of

performance in identified sectors with increased

resource use efficiency.

Infrastructure MissionŒ

Ÿ Develop integrated vision for infrastructure in

Andhra Pradesh to realise the objectives of

Vision 2029

Ÿ Develop fourteen ports that will compete with

Singapore as a 'Logistics Hub'

Ÿ Develop three Mega Cities, eleven smart cities

and twenty eight SEZs to make Andhra

Pradesh an Economic hub

Ÿ Build three International Airports and ten

Domestic Airports

Ÿ Create a network of inland waterways and a

National Waterway connecting Kakinada with

Ennore

Ÿ World class infrastructure in power (24*7

supply) roads and railways

Ÿ Promote Andhra Pradesh as a Tourism Hub

Primary Sector Mission�

Ÿ Make agriculture and allied activities profitable

and sustainable

Ÿ Mitigate drought through water conservation

Ÿ Manage post harvest activities effectively

Ÿ Enhance storage processing and value

addition

Social Empowerment MissionŽ

Ÿ Score high on the MDGs and/or other global

indicators

Ÿ Monitor service quality and improve citizens’

living standards

Ÿ Network with innovative organisations and

implement their proven models

Ÿ Ensure equitable growth with specific focus on

the disadvantaged sections of society

Industry Sector Mission�

Ÿ Enhance state-wide road connectivity

Ÿ Operationalise industrial corridors

Ÿ Improve access to health and insurance

support systems for the workforce

Ÿ Create SEZs and two NIMZs

Ÿ Enhance productivity of all sectors

Urban Development Mission�

Ÿ Improve transportat ion, housing and

employment in urban areas

Ÿ Establish three mega and fourteen smart

cities

Ÿ Improve urban planning based on migration

patterns

Ÿ Improve sol id waste and wastewater

management

Ÿ Develop strategies for financial resource

mobilisation

Service Sector Mission‘

Ÿ Develop ITIRs and electronic clusters

Ÿ Stress on e-governance and m-governance

Ÿ Introduce 100 percent fibre optic connectivity

and high speed broadband connection to all

households

Ÿ Ensure growth with equity with specific focus

on the disadvantaged sections of society

Knowledge and Skill Development Mission’

Ÿ Ensure qual i ty h igher educat ion and

vocational education

Ÿ Enhance student employability and boost

entrepreneurship

Ÿ Foster education and research

Ÿ Improve industry-academia collaboration

Grids

Ÿ With a Vision of making the State 'Smart', the

government has conceptualised setting up of

five grids that will provide impetus to the

growth of the economy. These include:

Ÿ Gas grid for gas connection (through

pipelines) to every household

Ÿ Water grid that will provide water for domestic

and industrial uses

Ÿ Power grid that will enable 24 7 power for

industry and households and nine hours of

quality, uninterrupted power supply to farms

Ÿ Road grid that links every village or hamlet and,

Ÿ Fibre-optic grid that will provide broadband

services to every household

Janmabhoomi

The Government has initiated the Janmabhoomi

Maa Vooru (JBMV) focusing on five Campaigns,

preparation of Micro Plan for each Gram

Panchayat/ municipality and has three areas of

interventions – enhanced pensions, health camp

and veterinary camp.

Five Campaigns

As part of the Vision, the Government has launched

a people centred development process that

addresses a l l facets of soc io economic

d e v e l o p m e n t . T h e p r o g r a m m e s w i l l b e

implemented on a campaign mode to ensure active

participation of all stakeholder(s) thereby achieving

inclusive development

Ÿ 1.Pedarikam Pai Gelupu - Victory over Poverty

Ÿ Objective: To reduce poverty levels through

women inclusive growth

Ÿ 2.Badi Pilustondi - School is Calling

Ÿ Objective: To increase literacy rate to 100

percent and achieve zero drop-out rates

Ÿ 3.Polam Pilustondi – Revival of Agriculture

Ÿ Objective: To integrate technology and

agriculture to make it profitable and sustainable

Ÿ 4.Neeru Chettu - Water and Trees

Ÿ Objective: To harvest rainwater for meeting the

challenges of growing water scarcity and

achieving food and nutritional security

Ÿ 5.Aarogyam Parisubhrata - Health and Sanitation

Ÿ Objective: To ensure proper health and

sanitation is our government's priority

*

2929 14Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 13

Smart Village – Smart Ward towards Smart Andhra Pradesh

The Smart Village - Smart Ward initiative focuses on improved resource efficiency, empowered local self-

governance, access to assured basic amenities and responsible individual and community behaviour to build

a vibrant and happy society. It targets to achieve SMART infrastructure, SMART service delivery, SMART

technology and innovation, SMART institutions along with optimal mobilisation and utilisation of available

resources, leading to faster and more inclusive growth.

Exhibit 6: Integrated Functioning of the Transformational Catalysts

Primary Sector Mission

Service Sector Mission

IndustrySector Mission

Water Grid

Power Grid

Gas GridOp�c

Fibre Grid

Power Grid

Roads Grid

Urban Infrastructure

Mission

Social Empowerment

Mission

Knowledge & Skill

Development Mission

Infrastructure Mission

Pedarikam

Pai Gelupu / Victory over Poverty

Polam

Pilistondi / Revival of Agriculture

Badi Pilistondi /School is Calling

Neeru

Che�u / Water & Trees

Aarogyam Parisubhrata /Health & Sanita�on

§ Create

a

pool

of

trained,

knowledgeable

and

skilled

human

resources

§ Establish

world

class

centres

of

excellences

§ Foster innova�on and research

§ Ensure

growth

with

equity

§ Enhance

quality

of

life

with

a

focus

on

health,

sanita�on

§ Promote

healthy

lifestyle

§ Create

ameni�es

for

absorbing

migra�on

of

labour

from

rural

to

urban

areas

§ Enhance

urban

ameni�es

with

inbuilt

social

safeguards

§ Improve

transporta�on,

housing

and

employment

in

urban

areas

§ Develop integrated infrastructure for primary, secondary and ter�arysectors

§ Facilitate development of industrial infrastructure including logis�cs

Five Campaigns

§ Mi�gate drought through water conserva�on

§ Storage processing & value addi�on

§ Enhance state-wide road connec�vity

§ Create SEZs and NIMZs

§ Development of ITIRs and electronic clusters

§ 100% fibre

op�c connec�vity & high speed broadband

Smart Village

Janmabhoomi

Hon’ble Chief Minister

2929 16Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 15

Chapter 3

Approach and Strategy

Andhra Pradesh is embarking upon an

infrastructure led development strategy to meet

its target. It is estimated that an incremental

i n v e s t m e n t o f I N R 1 2 . 4 l a k h c r o r e i n

infrastructure over the next fifteen years would

be required to ensure an Asset (net block) to GDP

ratio of 70 percent by 2029-30.

Ahead of port led development

Integrated approach towards a port led

development with phased infrastructure

strategy to meet planned targets.

Andhra Pradesh is embarking on an infrastructure

led development strategy. The Government

recognises the experience from several emerging

markets and developing economies that

bottlenecks and gaps in critical infrastructure in the

State could hinder the potential rate of growth of

the State's economy. To augment the infrastructure

base of the State, the Government has set up the

Infrastructure Mission.

Role of InfrastructureHistorical infrastructure spending of 84 countries

which account for over 90 percent of global GDP

indicates that global investment on roads, rail,

p o r t s , a i r p o r t s , p o w e r , w a t e r a n d

telecommunications has averaged at about 3.8 2percent of global GDP . From this panel, it is

estimated that an Asset (net block) to GDP ratio of

70 percent is required for sustainable provision of

services and facilitation of economic activities.

For India, this is estimated to be approximately 60

percent, compared to 71percent in Germany, 76

percent in China and 87 percent in South Africa.

Over the past (1992 – 2011) actual expenditure in

India (Private and Public aggregated) has been

about 4.7%. In order to bridge the investment gap

and even bring it to 70%, this expenditure needs to

increase significantly. Applying this benchmark to

Andhra Pradesh with an infrastructure net block of

Rs. 1.56 lakh crore as on date, is estimated to make

incremental investment of Rs. 12.4 lakh crore in

infrastructure over the next fifteen years.

2For details, please refer to 'Infrastructure Productivity: How to save $1 trillion a year' MGI (2013).

Ÿ Infrastructure accelerates annual growth convergence

rates by as much as 13% while increasing per capital

annual growth rate by almost 1%. (AfDB)

Ÿ Investments in core infrastructure generates economic

return of between 5% to 25% (WEF)

Ÿ An additional 1% of GDP invested in transport and

communications on a sustained basis increases the

GDP per capita growth rate by 0.6% (AfDB)

Ÿ China's investment in infrastructure (as weighted

average percent of GDP) is 8.5 versus 4.7 for India.

Further, this has been distributed more or less evenly

across roads, rail, power, water and telecom, unlike in

India, where two sectors – power and telecom account

for over 60% of the total investment

Key Facts:

Further, this has been distributed more or less

evenly across roads, rail, power, water and telecom,

unlike India, where two sectors – power and

telecom account for over 60% of the total

investment.

Multiplier Effects and Benefits of Infrastructure

Investments

Accelerated infrastructure spending will drive

economic growth, provide jobs, and deliver vital

services, such as a clean water supply. The World

Economic Forum (WEF) estimates that every dollar

spent on a capital project (in utilities, energy,

transport, waste management, flood defence,

telecommunications) generates an economic

return between 5% and 25%. The multiplier effect

accounts for the rapid economic growth of

emerging markets that have made infrastructure

Exhibit 7: Infrastructure in China – Driving Sustainable Growth

China's economic growth has increased from an

average of 7.5 percent during 1970 - 1999 to over

10 percent per annum during 1999-2008. China's

sustained high economic growth and increased

competitiveness by boosting the manufacturing

sector has been underpinned by a massive

development of physical infrastructure. This

correlation has also been realised at the global front

and is widely discussed. A study was conducted by

Institute of Developing Economies (IDE), JETRO to

estimate the impact of factors such as labour,

public and private investments, expenditure on

health and education and infrastructure on

economic growth of China. The results indicate an

output elasticity of infrastructure between 0.27 –

0.41; which is the highest as compared to other

spending a priority. A significant number of micro

and macro studies find a positive link between

infrastructure investments and growth, which

holds for both long-run economic growth as well as

specific factor outputs.

Connective infrastructure, such as roads, is likely to

have the greatest impact on economic growth.

Improved connectivity within a country and within a

region increases firms' access to markets for their

goods and for cheaper inputs; assists businesses

in developing competitive advantages; and

provides workers, particularly those in lagging

areas, with greater job and income opportunities.

Transport typically facilitates agglomerations,

which in turn promotes economic growth.

Core infrastructure investments also have a

multiplier effect on social indicators. On the

factors. Investment in key infrastructure over the

years has increased considerably as a share of

total GDP; which has been the key driver.

Since 2004, investment in infrastructure has

accounted for between 25 and 35 percent of total

fixed asset investment in China, and has grown in

nominal terms by an average annual rate of 20

percent. Although the improvement in the scale

and quality of infrastructure over the past two

decades is evident across a variety of social and

economic indicators, there is still some way to go

before China achieves convergence with the

provision of infrastructure seen in advanced

economies, including Asian economies such as

South Korea which are further along the path of

economic development.

2929 20Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 19

Infrastructure Development for Port led Logistics and Corridor Based ManufacturingA Port Led Development is envisaged for the State

where integration between infrastructure and

industry would help accelerate industrial growth.

Andhra Pradesh is at the pivot of two large

industrial corridors – the Vizag Chennai Industrial

Corridor and the Chennai Bengaluru Industrial

Corridor. These corridors have the potential to

create a strong economic base with a globally

competitive environment, state-of-the-art

infrastructure, activate local commerce, enhance

i n v e s t m e n t s a n d p r o m o t e s u s t a i n a b l e

development.

Exhibit 8: Singapore - Asia's Global Logistics Hub

Singapore has always been a strong performer in

the global logistics industry, with a World Bank

ranking of 5 in 2014. The World Economic Forum

ranks Singapore second for the 'Quality of Port

Infrastructure'. Increased thrusts on developing

port infrastructure, increased efficiency and

production of innovative value added goods have

contributed to its success.

Transportation and logistics sector has continued to

contribute between 7 to 9 percent to Singapore GDP in

the last decade. As of today, the industry employs

2,05,000 people; thereby contributing to 12.3 percent of

total employment in the country.

A key factor driving this sector is the economy's

ability to leverage upon the two ports of Singapore

and Jurong, to cater to various

ser v ices inc lud ing f re ight

forwarding, consolidation of

goods, value – added re exports

among others. Today, Singapore

h a s t h e w o r l d ' s b u s i e s t

transhipment hub, handling 32.6

million TEUs of containers in

2013 and has been ranked the

world's busiest port in terms of

shipping tonnage.

A 'Logistics and Transportation

Productivity Roadmap' was

unveiled by Singapore Economic

Development Board in 2012. The

productivity plan had two focus

areas which would help achieve

the productivity target of S$

1 3 0 , 0 0 0 f o r v a l u e - a d d e d

products per worker by 2015.

Exhibit 9: Industrial Innovation in Taiwan – Asia's Silicon Island

Since the 1950s, the Taiwanese economy has

grown rapidly at an average rate of 7.3 percent per

annum (1952-2012), starting from an agrarian

economy to become a world player in the ICT

(information and communications technology)

sector. Industrial policy and its thrust on

liberalisation and globalisation have played an

important role in the economy's rapid growth.

T h e i n d u s t r i a l s e c t o r h a s u n d e rg o n e a

revolutionary change since the 1950's. The

Ministry of Economic Affairs has played a key role in

transforming Taiwan from being an agro exporter

of r ice , sugar and bananas the top ICT

manufacturer in the world. Below is a snapshot of

the policies and the shift in the activities undertaken

by the export promotion zones (EPZs) to

industrialise the economy.

The gradual shift over more than five decades has

made the ICT sector as the most important

component of Taiwan's manufacturing sector. The

sector produced 50.94 percent of manufacturing

output in 2011. Moreover, the stock value of ICT

firms accounted for around 50 percent of the market

value of the Taiwan Stock Exchange in 2012. The ICT

sector also contributes to 40.06 percent of its total

exports.

ICT firms compete well in the world market by

utilising the cost-down business model. However,

in the last few years, with rising wages in China, the

cost-down business model encountered a

bottleneck as the value-added as a percentage of

final output value declined from 33.33 percent in

2003 to 29.20 percent in 2011. To boost the ICT

sector further and for it to continue playing an

important role in the industrial space, the

government has developed six industrial innovation

corridors that brings together the science parks, export

promotion zones and the technology research institutes.

These cor r idors focus on research and

d e v e l o p m e n t o f d e f e n c e , a g r i c u l t u r a l

biotechnology, software and aviation sectors.

Ind

ust

rial

tra

nsi

�o

n f

rom

lab

ou

r in

ten

sive

to

te

chn

olo

gy

dri

ven

val

ue

ad

de

d p

rod

uct

s

2929 22Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 21

Core Sectors for Port Led Development: Logistics Hubs

Exhibit 10: Integrated Approach towards Port Led Development

Ports

Mul�-modal transport and

support infrastructure

Industrial Corridors

and Zones

Enhance manufacturing ac�vi�es catering to domes�c and global demand

Seamless and cost-effec�ve connec�vity for movement of cargo

India’s gateway to the world especially East and South-East Asian Regions

Facilitate development of Port linked Industries such as ship building, POL, refineries etc.

8

Andhra Pradesh Petroleum, Chemicals & Petrochemicals Investment Region (AP PCPIR)manufacturing and service facili�es for domes�c and export led produc�on in petroleum, chemicals & petrochemicals.

Port Led development: Capacity expansion of exis�ng ports. Proposed development for 11 greenfield ports. Ports to act as pivot for industrial growth through integra�on between infrastr ucture and industry.

Two Industrial Corridors to trigger enormous growth in manufacturing output-

Vizag Chennai Industrial Corridor (VCIC) and the Chennai Bangalore Industrial Corridor (CBIC). Four industrial nodes iden�fied along VCIC at Visakhapatnam, Kakinada, Machilipatnam and Tirupa�-Srikalahas� and three industrial nodes iden�fied along CBIC at Hindupur, Chi�oo and Krishnapatnam.

Develop 3 mega ci�es, 14 smart ci�es

across the State. The three mega ci�es would be developed in Visakhapatnam, Vijayawada and Tirupa�.

Airport Development –

Up grada�on of exis�ng four airports to interna�onal standards and addi�on of 7 Greenfield no-frills airports. Development of MRO industry

Inland Waterways –

Development of Na�onal Waterway 4 as a mul� modal transport system stretching between Srikakulum to Puducherry.

Capital City- Development of a world class capital city in the Vijaywada, Guntur region with strong connec�vity to the Rayalaseema

Special Investment Regions (SIRs) - Promote development of Special Investment Regions which will a�ract investment in the State and emergence of clusters with MSMEs

LNG terminals and Piped Gas Network

connec�ng all districts

World Class Ins�tu�ons

to provide for educated and skilled workforce

Cross road of two major na�onal highways. Towards providing World Class roads and last mile connec�vity

Strategic Location of Andhra Pradesh

Exhibit 11: Phased Strategy for Infrastructure Development

Ports Roads Industrial Development Industrial Corridors

Short Term

Ÿ Optimising and expanding of existing port capacity

Ÿ Existing Minor ports to capitalise on capacity constraints of major ports along the east coast

Ÿ Capitalise on deep draft ports to handle capesize vessels along the East Coast

Ÿ Enhance port connectivity to existing ports to be enhanced

Ÿ Prioritise lane expansion of roads with high vehicular traffic

Ÿ Upgrade state highways to national highways

Ÿ Improve last mile connectivity to ports and industrial hubs

Ÿ Integrate road network with rail and shipping for a multi modal transit system

Ÿ Build upon existing region specific industries

Ÿ Agglomerate and encourage industries specific to each region

Ÿ Focus on export led growth

Ÿ Develop trade and logistics centre to facilitate global trade

Ÿ Industrial Nodes be linked with the nearby industrial cluster

Ÿ Connectivity between Industrial nodes and ports to be enhanced

Long Term

Ÿ Development of new ports to meet demand from industrial corridors

Ÿ Development of multimodal connectivity and supply chain/logistics infrastructure

Ÿ Lead containerisation trend through improved supply-chain and cargo agglomeration

Ÿ Development of bulk cargo ports to meet increased energy demands

Ÿ Development of Coastal shipping

Ÿ Four/two lane efficient hinterland connectivity to utilise the port development to its full potential

Ÿ four/six lane connectivity from district headquarters to the State capital

Ÿ Village connectivity through up gradation and new roads

Ÿ Increased road density of s and national highways

Ÿ Build upon high and large growth industries an create large scale employment

Ÿ Build upon opportunities created by global trade

Ÿ Regions between the industrial clusters to be developed and nodes to become key growth drivers

2929 24Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 23

Exhibit 11: Phased Strategy for Infrastructure Development (continued...)

PowerGas Pipelineand Grids

Inland WaterwayAirports

Railways

Short Term

Ÿ Reduction of AT&C losses

Ÿ 24x7 power to industries, commercial and domestic utilities

Ÿ Capacity addition through purchases

Ÿ Augment power demand through renewable sources

Ÿ Up-gradation and strengthening of key Transmission and Distribution corridors

Ÿ Development of LNG terminals and setting the foundation for transforming AP into a hub for Natural Gas

Ÿ Expedite setting up of gas pipelines connecting every district

Ÿ Provide gas to major industrial zones and cluster

Ÿ Upgrade NW 5 in and around industrial clusters

Ÿ Improve connectivity to roads and ports

Ÿ Expansion and up-gradation of operational airports to meet demand from industrial development

Ÿ Developing a multi-modal logistics hub i industrial clusters and nodes

Ÿ Doubling and electrification of existing capacity as a short & medium term measure to enhance rail capacity

Long Term

Ÿ Capacity Addition through expansion of existing plant

Ÿ Increase supply of power to agriculture and feeder segregation

Ÿ Strengthening and expansion of transmission and distribution

Ÿ Network to meet increased power consumption

Ÿ Set up of more LNG terminals

Ÿ Develop AP as a hub for Natural Gas.

Ÿ Connect every industry, domestic households, and commercial establishment with pipes gas network in the state.

Ÿ Gas pipelines to connect AP with the rest of Indiaal highways

Ÿ Develop the entire stretch of NW 5

Ÿ Enable industrial development of the hinterland by providing IWT as an alternate to surface connectivity for logistics

Ÿ Development of green field airports

Ÿ Develop AP as a MRO hub in India

Ÿ Increase the overall rail density in the region by augmenting capacity

Ÿ Develop new railway lines and expand capacity of existing railway lines connecting to gateways – ports & airports to enhance cargo transportation by rail.

Thrust Sectors

Exhibit 12: Summary of Targets

Sector Targets

Power · Installed capacity of over 42,000 MW

· Per capita electricity consump�on to exceed 4500 units

· Renewable energy capacity addi�on of over 9000 MW

·

Reduc�on of T&D losses to below 5%

Airports

·

3 World-class Interna�onal airports at Visakhapatnam, Vijayawada and Tirupa�

·

12 out of 13 districts of the state will have an Airport upon comple�on of the envisaged plan (except Srikakulam District)

·

Andhra Pradesh to be developed into a MRO hub in India

Ports

·

Ports to handle cargo throughput of over 1000 MT a year

·

18 ports to be opera�onal (6 currently opera�onal. 6 under development, 6 iden�fied)

·

Andhra Pradesh to develop into a hub for ship building and repairs

Gas

·

Andhra Pradesh to become a gateways to import gas in the country

·

Piped gas for every industry, commercial opera�on and domes�c consump�on in every district

Roads

·

Road density of 1.42 km per sq km

·

Four/six lane connec�vity from district headquarters to the State capital

·

Road connec�vity to every village, with paved all weather roads

·

Beach Road from Ichchapuram to Tada

Telecommunica�on

·

Connec�on on demand with a bandwidth of at le ast 10 Mbps through “Aerial Fibre

Network”

·

Broadband connec�vity to over 1.2 crore households

·

Tele-density of over 100%

Railways

·

Develop new railway lines and expand capacity of exis�ng railway lines connec�ng to gateways –

ports & airports to enhance cargo transporta�on by rail.

Inland waterways

Development of NW 4 as a major transporta�on route for transport of cargo

2929 26Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 25

Sector Snapshots

RoadsRoad infrastructure comprises the National

Highways, State Highways, Major District Roads,

Panchayat Roads and Other Roads like project

roads. Road network provides the arterial network

to facilitate trade, transport, social integration and

economic development. Andhra Pradesh has a

total road length of about 1,23,334 km that criss-

cross the length and breadth of the State. The NH-5

with a length of about 1,000 km is the key highway

in the State that runs parallel to the State coast

connecting the Northern and Southern Districts. It

also forms part of Asian Highways AH-45 which

comes under the Asian Highways Network.

In terms of either area density (roads per 100

square kilometres of area), or population density

(roads per 1000 population), it is clear that there is a

significant gap in total road availability. This

indicates an asset creation requirement of around

68,459 km, even to reach parity with the national

average on kilometre per 1000 people basis.

Target

The Mission envisages achieving the following

targets:

Ÿ Increase the average road density across all

road types above the national average and be

among the top three States in the country

Ÿ Modernise State Highways and conversion of

other highways to two lane roads with paved

shoulders

Ÿ Provide ring road and radial roads in the new

Capital City Region

Ÿ Provide four/two lane efficient hinterland

connectivity to utilize the port development to

its full potential

Ÿ Provide four/six lane connectivity from

district headquarters to the new Capital City

Ÿ Provide adequate road capacity to support the

planned logistics hubs and Industrial

Corridors (VCIC and CBIC)

Ÿ Improve village connectivity by developing the

required roads and improving the existing

roads

Road Category

Length (km) Na�onal Highways cons�tute

4,302

State Highways cons�tute

7,255 Major District Roads cons�tute

19,783 Rural Roads

91,994

Head

India

Andhra Pradesh

Road Density (km of road length per 100 sq. km.) 143 77 Road Density (km of road length per 1000 popula�on) 3.9 2.5

Area density gap ~ 1,05,800

Popula�on density gap ~ 68,500

Source: Based on

data available in AP

S o c i o - e c o n o m i c

Survey 2012-13 and

B a s i c R o a d

Statistics of India,

MORTH 2012, GOI.

Operational and Upcoming Ports

PortsAndhra Pradesh has the second longest coastline

in India, covering a length of over 974 km stretching

between Srikakulam and Nellore with deep draft

coastal waters. A network of 14 notified non-major

ports and one major port provides strong potential

for the State to become India's gateway to the

world, especially the Asian and South East Asian

region. Andhra Pradesh has the unique advantage

of having three deep draft ports – Visakhapatnam,

Gangavaram and Krishnapatnam that is a critical

enabler for attracting bulk cargo from East and

South East Asian economies.

To reap the potential benefits and position of

Andhra Pradesh as the India's Gateway to the

World, the Government is integrating the

development of ports, industrial clusters and

,hinterland and efficient evacuation systems

through road, rail, inland and coastal waterways

under the Sagarmala Project of the Government of

India. The project is aimed at making ports as the

drivers of economic activity in coastal areas. The

first phase of the project includes development of

stretch comprising Visakhapatnam - Kakinada –

Gangavaram – Krishnapatnam.

The Government has also encouraged private

participation for port development. Currently there

are six ports in the State that are operational and

severa l o thers under var ious s tages o f

development.

0

20

40

60

80

2007 2008 2009 2010 2011 2012 2013

Mill

ion

Tonn

es

Cargo Handled by Ports in Andhra Pradesh

Non Major Ports

Source: Indian Ports Association

2929 28Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 27

Cargo Movement

In 2013-14, the ports in Andhra Pradesh handled

over 12.25% (117MT) of the total cargo moved

through sea in India. Vishakhapatnam Port

accounted for 59 MT, while the non-major ports

accounted for over 58.94 MT of the total cargo

movement. Andhra Pradesh is the second largest

handler of cargo through non major ports in the

country and Vishakhapatnam Port is the fourth

largest major port in the country in terms of cargo

handled. The current capacity of the operational

ports in the state is over 180 MT with traffic of

around 120 MT.

Economy and Cargo Movement

The Planning Commission of India has estimated

the elasticity between Gross Domestic Product

(independent variable) and the total cargo

(dependent variable) for data between 2001-02 and

2010-11 at 1.21. An elasticity of 1.2, indicates that

for a 1% increase in GDP (factor cost at constant

prices), the total cargo increases by 1.2%. Based on

the elasticity of 1.2, the traffic projections for the

year 2023-24 are estimated to range between 290

MT and 450 MT.

Growth Scenario and Elasticity

GSDP Growth 8% 10% 12%

Cargo Growth 9.68% 12.12% 14.52%

117

297

517

370

733

457

1031

0

200

400

600

800

1000

1200

2013 -14

2023 -24

2029 -30

Mill

ion

Tonn

es

Cargo Movement Estimated for Ports in Andhra Pradesh

GSDP @ 8% GSDP @ 10% GSDP @ 12%

Potential for Ports in Andhra Pradesh

Endowed with a strong industrial base, coupled

with natural endowments of mineral reserves the

potential for a port lead development is certain.

With the establishment of a network of ports and

land transport, Andhra Pradesh would serve as the

gateway to Eastern and Central India.

However, for a port led development of the State, it

is essential that;

Ÿ Last mile connectivity through road and rail

and other supporting infrastructure is

available for the movement of cargo to and

from ports

Ÿ Capture traffic from neighbouring ports and

Eastern and Central India

Ÿ Capacity creation and prioritising energy cargo

(Thermal coal, LNG) movement to meet the

increasing power demands of the state and

neighbouring states

Ÿ Expansion of existing deep draft ports into

mega container terminals with the ability to

handle ships of over 12,000 TEU

Ÿ Develop multimodal connectivity and supply

chain andlogistics infrastructure for efficient

usage

Ÿ Containerisation through improved supply-

chain efficiency and cargo agglomeration

Ÿ Balance the mix of exports and imports in the

container trade

Ÿ Develop of need-based new bulk cargo ports

at different locations, especially to cater to the

demand from VCIC and BCIC

Petroleum Products

Oil consump�on in India is expected to increase from 3.68 million barrels per day (bpd) in 2012 to 5.19 million bpd in 2025. Dependence on imports is expected to increase with ports as the entry points. Furthermore coastal movement of petroleum products is expected to increase with increased demand and development of refineries along the coastline.

Coal

Increased gap between demand and indigenous availability is projected to be more than 200 MT by 2016-17 and to further increase to 423 MT

by the end of 2022-23.

Iron Ore

Increase in the export of iron ore and pellet traffic.

Fertilizers

Of the total demand for fer�lizers in the country, about 38%

of the total fer�lizer consump�on is met through imports. Total demand for fer�lizers (products and nutrients) is expected to increase from the current demand of 96 MT to over 140 MT by 2024-25 resul�ng in greater imports.

Containers

Increasing share of Containeriza�on- Share of container cargo in total other cargo ( other than POL, Iron ore & pellets, Coal and Fer�lizer) has increased from 44.59% in 2001 -02 to 54.2% in 2013-14.Container traffic would account for over 850 MT by 2023-24 compared to about 200 MT in 2013-14.

Demand Drivers

2929 30Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 29

in 2013-14. This comprises of 1.21 % of the total

domestic passenger traffic and 0.15% of the total

international traffic in the country.

AirportsThere are six operational airports in the State, of

which five are managed and operated by the

Airport Authority of India and one managed by a

private spiritual trust. Of these, four are currently

operational for commercial traffic. The State has

o n e i n t e r n a t i o n a l a i r p o r t l o c a t e d a t

Vishakhapatnam and three domestic airports

located at Rajamundry, Vijayawada and Tirupati.

The erstwhile State of Andhra Pradesh accounted

for over 6% of the total passenger movement in the

country with Hyderabad airport accounting for

80% of the state 's t raffic. However, the

reorganisation of the State in 2014 has resulted in

considerable imbalance in the air connectivity of

the new Andhra Pradesh.

Currently, Visakhapatnam airport is the largest

airport in the state and handles over 60% of the

domestic traffic of the state and also the only

airport which handles cargo traffic. The total

passenger traffic in the state stood at 1.48 million

Expansion Plans for Existing Airports

For increased air connectivity and passenger traffic

in the State, the government has proposed for

expansion of existing airports and development of

greenfield airports in the state. The proposed

development plan aims at not only increasing

passenger growth, but as a result seeks to create

direct and indirect employment opportunities for

millions in the State.

Sectoral Plan

Ÿ Green Field International Aerotropolis near

Visakhapatnam

Ÿ Modernization & upgradation of 5 existing

airports (Vijayawada, Tirupati, Rajahmundry,

Kadapa, Puttaparthi)

Ÿ 5 Green Field No Frills Airports (Kuppam,

D a g a d a r t h i , O r a v a k a l l u , O n g o l e a n d

Tadepallegudem)

Ÿ 2 Brown Field No Frills Airports (Donakonda,

NagarjunaSagar)

Ÿ Establishment of an Aviation Academy and

develop Andhra Pradesh as an MRO hub for

India by setting up maintenance Repair and

Overhaul (MRO) facilities in Visakhapatnam

Airport Status Type Peak Hour

(Passengers)

Aircraft

Movement

Passenger

Traffic

(in Lacs)

Visakhapatnam Opera�onal Customs 300 (Int'l) 1120 (Int'l) 0.72 (Int'l)

400 (Dom)

9888(Dom)

9.4 (Dom)

Tirupa�

Opera�onal

Domes�c

300

2970

2.72

Vijayawada

Opera�onal

Domes�c

90

4280

1.94

Rajahmundry

Opera�onal

Domes�c

225

7492

1.12

Kadapa

Non Opera�onal

Domes�c

100

-

-

Pu�aparthi

Opera�onal

Private

-

-

-

Source:

Airport

Authority of

India

Air Traffic in Andhra Pradesh 2013-14

Energy

a. Power Sector

The power sector is one of the most critical

components of infrastructure impacting economic

growth and well being of any developing economy.

An efficient and financially healthy power sector is

critical for growth and poverty reduction.

Andhra Pradesh current ly has an energy

requirement of 54,800 MU (Million Units) of

electricity annually with an annual peak load of over

6500 MW. However, to meet the additional two

hours of power supply to agriculture, the total

energy requirement stands at 56,535 MU. The per

capita consumption of electricity in the state is over

1,050 units a year. Two distribution utilities in the

state supply power to over 15 million consumers

through transmission and distribution network of

over 50,600 ctk km spread across the State.

Power in the State is supplied through a mix of

conventional and renewable sources. The total

installed capacity in the state stands at over 10,600

MW.

81%

7%

1%

10%

1%

Domestic

Commercial

Industrial

Agriculture

Others

2810

1747.6

2

1633.22

2766.7

1668.6

State Thermal

State Hydel

State Renewable

Central Generating

Stations

IPPs

Renewables

Total Connections in Andhra Pradeshin 2013-14: 15 million

Total Installed Capacity of Andhra Pradeshas on 2014-15: 10,628 MW

2929 32Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 31

Power Sector and the Economy

It is estimated that the elasticity between GDP

growth and power sector growth in the country

ranges between 0.8 and 0.9. Assuming similar

relation between the GSDP of the State and the

power sector growth, it implies that the power

sector would have to grow between 8% and 9% if

the GSDP grows at 10% per annum. Assuming a

continued GSDP growth between 8% and 12% for

the State, the demand for electricity in the state is

expected to range between 95 BU to 124 BU by

2022-23 or would require an installed capacity of

around 25,000 MW. This would translate into a per

capita consumption of ranging between 1,766 units

to 2,299 units during the same time period.

The demand for power in the State is expected to be

driven mainly through industrial users coupled with

increased demand from domestic consumers

resulting from increased disposable income and

rural electrification.

Way Forward

To meet the power requirement of the State,

Government of Andhra Pradesh and Government of

India have taken a joint initiative to provide un-

interrupted 24x7 power supply to the State of

Andhra Pradesh(except agriculture consumers).

This mainly includes the following:

1. Reliable 24X7 supply to the consumers

(except agriculture) in a phased manner

within a period of three years.

2. Increase duration of supply of electricity

to agriculture consumers from seven

hours per day at present to nine hours

per day in a phased manner

3. All unconnected households to be

provided access to electricity in a time

bound manner by FY 2016-17

4. Ensure adequate capacity addition

planning & tie ups for power from various

sources at affordable price to meet the

projected increase in power demand in

the future.

5. Strengthen the Transmission and

Distribution network to cater to the

expected growth in demand of existing

as well as forthcoming consumers.

6. Monitoring the timely commissioning of

various generating plants, transmission

and distribution infrastructure to meet

the expected growth in demand.

Projected Per Capita Power Consumption and Demand for Power

54864 95685

155672

109320

199841

124625

255496

0

50000

100000

150000

200000

250000

300000

2014-15 2022-23 2029-30

Mill

ion

Un

its

Present Demand

GSDP @ 8%

GSDP @ 10%

GSDP @ 12%

1083

1766

2739

1083

2017

3517

1083

2299

4496

500

1500

2500

3500

4500

5500

2014-15 2022-23 2029-30

Un

its

Pe

r C

apit

a

GSDP @ 8%

GSDP @ 10%

GSDP @ 12%

b. Gas

The total Natural Gas consumption in India was around 34 Billion Cubic Meter (BCM) for the year 2013-14, while the erstwhile state of Andhra Pradesh consumed about 1.16 BCM of natural Gas during the same year. The fertilizer sector accounted for the largest share in consumption in the country at over 32.5 % followed by the power sector with over 31% of the total consumption. This is mainly due the limited availability of natural gas in the country and provision for priority allocation of natural gas for fertiliser sector.

Andhra Pradesh has an estimated onshore balance recoverable reserve of about 48.2 BCM of Natural Gas and the offshore reserve along the East Coast of India, which comprise mainly around Andhra Pradesh stands at over 531.4 BCM. The state has tremendous natural gas wealth in the KG basin both on and off-shore, which stretches to over 50,000 sq. km. of potential area, studies also

Power Sector

Over 3,790 MW of gas based power plants proposed for development in the future and exis�ng power plants.

Fertilizer Sector

A major consumer of natural gas is the fer�lizer sector. The Government of India accords the highest priority for the fer�lizer sector when it comes to the alloca�on/supply of natural gas.

Industrial and CGD Sector

CNG sale for automobiles, piped natural gas for households and commercial establishments and industrial customers are expected to drive up

demand for natural

gas in the State.

Refineries Sector

The refinery sector is also a major consumer of natural gas in the state. Over 30 MTPA addi�onal refinery capaci�y is planned in the Kakinada and Vizag region.

Switching Demand

The switching demand arises from automobiles segment, households and commercial establishments - switching from alternate fuels such as LPG, Diesel and Petrol to CNG .

indicate existence of large unexplored resources in the Pranahita-Godavari and Kadapa basin with an estimated 39,000 sq. km. of potential area. Although the availability of gas has been explored around the State, the supply of the natural gas has not been able to meet the growing requirements.

Industrial Fuel3.17%Tea Planta�on

0.58%Domes�c Fuel

8.60%

Cap�ve Use/LPG

13.96%

Others

2.10%

Power Genera�uon

31.02%

Fer�liser Industry32.56%

Petrochemicals4.11%

Others3.90%

Non Energy Process,

13.78 Bn CM

Industry wise off take of Natural Gas in India (2013-14)

Demand Drivers for Gas Based Power Plants

2929 34Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 33

Inland Waterways

Inland Waterways is the cheapest mode of surface

transport. The cost of moving one tone of cargo

through inland water transport is barely 50

paise/km in comparison to Re 1/km by railways

and Rs 1.5/km through roads. It also has the

advantage of low capital cost and low maintenance

cost. Given that India has one of the highest

logistics cost as percentage of output (~ 15% of

GDP), usage of inland waterways as a key logistics

channel can provide significant cost savings at

relatively lower investment.

Andhra Pradesh is bestowed with two major rivers

– Krishna and Godavari that can be developed into

waterways for speedy and cost effective

movement of goods and passenger traffic. The

National Waterways – 4 is designed to leverage this

advantage to provide a reliable and cost optimal

logistics channel spanning three states (Andhra

Pradesh, Tamil Nadu and Puducherry)

I. Target

The National Waterways - 4 (NW -4) from Kakinada

to Puducherry Canal System along with River

Godavari and River Krishna is the second longest

NW with a length of 1,078 kms after the NW 1. The

NW 4 comprises of the following:

NW – 4 runs through urban and rural centres

including Vijayawad, Rajahmundry, Kakinada,

Eluru, Bhadrachalam, Wazirabad and Chennai and

therefore serves as a vital link between the urban

areas and rural hinterland. NW-4 is connected to

the most number of ports in the country compared

to other national waterways. These include

Kakinada, Krishnapatnam, Ennore and Chennai

ports and would facilitate cargo movement and

promote trade in the region. The development of

this waterway will provide social benefits such as

employment generation, reduction in pollution,

providing port- hinterland connectivity, reduction in

road maintenance and road accidents, increase in

economic activities etc. Given that the overall

project cost is estimated at about INR 3,426 crore,

the segment of the facility within Andhra Pradesh

(888 km) is estimated to cost INR. 2,800 crore .

Terminals Proposed:

Ÿ Kakinada

Ÿ Rajahmundry

Ÿ Eluru

Ÿ Kottapatnam

Ÿ Maipadu

Ÿ Durgarajupatnam

Ÿ Vijayawada

Ÿ Tadepaligudam

Stretch Km

Godavari river from Bhadrachalam to Rajahmundry 171

Krishna river from Wazirabad to Vijayawada 157

Kakinada canal from Kakinada to Rajahmundry

50

Eluru canal from Rajahmundry to Vijayawada

139

Commamur canal from Vijayawada to Peddaganjam lock

113

North Buckingham canal in A.P. upto Tada

258

Logistics

There is a clear symbiotic relationship between

efficient transportation and logistics systems and

industrial growth. Growth of the logistics sector has

an elasticity of 1 to 1.2 on output. Given that the

Government of Andhra Pradesh envisages

industrial growth as a key driver of GDP growth in

the State especially during the 2015–2029 period

high quality logistics infrastructure is imperative for

effective implementation of Vision 2029. The State

already has good rail and road linkages to North,

South, West and East. It also has a long coastline

and a planned parallel inland waterway network. It

has natural advantages such as a long coastline

and deep drafts to enable ports which can provide

linkages to major markets. Direct shipping from

South East Asian economies to ports in the States

compared to West Coast will save transit time of

around 2–3 days. Additionally, accelerated

industrialisation in the region, cargo agglomeration

f rom d is tant h in ter lands and increased

connectivity through the envisaged industrial

corridors creates a large window of opportunity for

logistics.

The logistics sector theme is essentially an

interplay of the other infrastructure components of

roads, rail, ports, airports, inland waterways and

industrial corridors, which are efficiently integrated

with the objective of reducing the total cost of

transportation to enhance competitiveness.

T h e NT D P C R e p o r t 2 0 1 4 p ro j e c t s t o t a l

infrastructure investment to the tune of INR 40

trillion in the 12th plan, and INR 70 trillion, INR 100

trillion and INR 155 trillion in the 13th, 14th and 15th

Plan periods respectively. Further it suggests that

total investment in transport will need to increase to

about 3.3% of the GDP in the 12th plan, and

increase to 3.7% of the GDP subsequently.

I. Target

Andhra Pradesh seeks to emerge as the Logistics

Hub of the East Coast in the South Asian region, by

efficient integration of multi modal transportation

networks, with the objective of optimizing total cost

of logistics. The following targets are envisaged:

Ÿ Creation of multi-modal transport and

logistics infrastructure

Ÿ Reduction in the cost of logistic as percentage

of output comparable to the best performing

states in the region

Ÿ Creation of an information system integrating

multiple players in the logistics value chain

across sectors for efficient coordination. This

will be set up for the two industrial corridor

planned in the State

Industrial Corridors

Contribution of the manufacturing sector to the

State's GDP is currently around 10%. This is lower

than the national average of 15%. Globally, there is

evidence of Corridor based development strategies

increasing business competit iveness and

attracting investments. Hence, in order to bring

about all round development of the industrial

sector, the Government of Andhra Pradesh will lay

thrust on development of industrial corridors in the

State. Andhra Pradesh is at the pivot of two major

industrial corridors – the Vizag Chennai Industrial

Corridor, and the Chennai Bengaluru Industrial

Corridor.

Target

The Vizag Chennai Industrial Corridor (VCIC) will be

India's first Coastal industrial Corridor and serve as

a 'Gateway to East.' The Vizag – Chennai Industrial

Corridor is a part of the larger East Coast Economic

Corridor that is proposed to run from Chennai to

Kolkata. The corridor covers an area of about

1,14,765 sq. km., and will pass through 11 districts

across two states – 9 in Andhra Pradesh and 2 in

Tamil Nadu. It will house 3 major ports and several

non-major ports. The project is expected to create

more than 50,000 jobs, both directly and indirectly,

in the first phase alone. The corridor is expected to

enhance the manufacturing output in the region of

INR 3,000 billion by 2025, and INR 7,825 billon by

2929 36Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 35

2035. VCIC would host industries across a number

of sectors, including food processing, textiles,

meta l lurgy, chemica ls , pharmaceut ica ls ,

electronics and automotive, to leverage the factor

advantage of its various catchments.

At present four nodes have been identified in the

Corridor:

1. Atchutapuram node – Visakhapatnam

District

2. Kakinada – East Godavari District

3. Gannavaram – Kankipadu Krishna District

4. Yerpedu – Srikalahasti – Chittoor District

The Chennai Bengaluru Industrial Corridor (CBIC)

covers an area of ~ 80,359 sq. km, and a population

of over 47.5 mn. Three of the eight nodes identified

in CBIC are in Andhra Pradesh – Krishnapatnam,

Hindupur and Chittor. In Phase I of the project, the

Krishnapatnam node will be developed. Japan

Investment Corporation Agency (JICA) is

supporting the Government of Andhra Pradesh by

funding the master planning and development of

the Krishnapatnam node. About 4,801 ha of land is

planned to be developed in this node.

Krishnapatnam has strong presence of food

processing, metallurgy, electrical equipment,

chemicals and petrochemicals, textiles and

pharmaceuticals. The CBIC corridor will help in the

promotion of automobiles, machinery, electronics

and medical equipment in this node.

Development of these Corridors will entail creation

of high quality trunk infrastructure across transport

(road, rail), power, water and communication

networks. Most of projects require substantial

capital expenditure and an active facilitation by the

State, Central and Local Government. The Mission

would encourage private sector involvement in

these projects wherever possible.

Railways

Andhra Pradesh has a total rail network of 2,660 km

with a rail density of 16.59 km of rail route per 1000

kilometers compared to the national average of 20.

In terms of rail route per 1000 population, the

State's rail density is about 0.0538 which is close to

the national average. 0.0533. The Mission would

coordinate with the Government of India for

identification and construction of new rail lines in

the State.

Targets:

Ÿ Doubling and electrification of existing

capacity to enhance rail capacity in the region

Ÿ Develop new railway lines and expand

capacity of existing railway lines connecting to

gateways – ports & airports to enhance cargo

transportation by rail.

Ÿ Increase modal shift of cargo transportation

from roads to rail over medium and long term

Ÿ Developing a multi-modal logistics hub in the

region shall act as a contributing factor for

growth of cargo movement by rail.

Ÿ Assess feasibility of development of various

upcoming projects due to external factors

such as land availability, soil erosion,

environment pollution, etc.

A total length of 3,301 kms. has been planned in the

State (including new lines and doubling) by the

Ministry of Railways of which about 2,100 is entirely

within the State.

GridsThe Government of Andhra Pradesh has launched five grids for water, power, gas, optic fibre and roads to

improve the access and availability of these services across the State.

1. Water Grid

The Government of Andhra Pradesh is committed

to provide assured water supply to its people for

drinking, irrigation and industrial use. The State

needs 156 tmcft of water to cater to the drinking

water needs of people in 13 districts and also meet

the requirements of commercial and industrial

consumers. Of the total 156 tmcft water, 20 tmcft is

for industries and 136 tmcft is for domestic sector

drinking purposes. In order to ensure this, the

Government is in the process of setting up a Water

Grid Corporation (WGC) that would oversee the

development of a state-wide smart water grid. The

WGC would also monitor, supply and maintain the

water grid. The mega grid would be built at a cost of

about Rs. 40,000 crore would have about four or

five sub grids. About 156 tmcft of water would be

drawn from Godavari, Krishna, Penna and other

sub-rivers in the states by reserving river water

which flows into the ocean. Separate pipelines

would be constructed for industrial, irrigation and

drinking purpose requirements.

Project Components:

Ÿ 4-5 sub grids

Ÿ New storage reservoirs

Ÿ Intake points, pumping stations and laying of

pipeline

Ÿ Capital improvements to existing storage and

transmission infrastructure

Project Funding:

Ÿ 50% of the project cost would be funded by

Government of Andhra Pradesh

Ÿ Remaining 50% to be funded through external

sources

Project Outcomes:

Ÿ Assured round the year water supply to all

areas in the State for drinking, irrigation and

industrial purposes

Ÿ Make Rayalaseema drought free by effective

channnelisation of flood water

Timeline

Ÿ Supply of water to select towns and villages in

next two years

Ÿ Overall project completion by 2019

2929 38Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 37

2. Gas Grid

To contribute towards economic growth and

efficient energy distribution, a state wide Gas Grid is

being developed. The Gas Grid consists of a State

wide Natural Gas Pipeline Grid and City Gas

Distribution system. The Gas Grid would provide

natural gas through a network of pipelines to

industrial, transport commercial and domestic

sectors and thereby encouraging major indigenous

and global players of the Industry.

Through the gas grid, the KG-basin and other gas

resources would be brought to "every industry and

every household.

AP Natural Gas Grid:

East-West Pipeline: East-West Pipeline is starts

from Gadimaga on the East coast of Andhra

Pradesh near Kakinada and terminates at Baruch in

the State of Gujarat. The source for this pipeline is

D6 in KG basin in the East Coast and it traverses

through East Godavari, West Godavari, Krishna and

Nalgonda in Andhra Pradesh.

Ÿ Mallavaram-Bhilvara-Bhaopal-Vijaypur

Pipeline: This 1,440 kms pipeline will pass

through East-Gadavari and Krishna in Andhra

P r a d e s h , K h a m m a m , W a r a n g a l a n d

Ramagundam in Telangana before reaching to

Bhopal and Vijaypur.

Ÿ Kakinada-Srikakulam Pipeline: This pipeline

would traverse through East Godavari,

V i s a k h a p a t n a m , S r i k a k u l a m a n d

Vizianagaram Districts of Andhra Pradesh and

has a length of 275 kms.

Ÿ Ennore – Nellore Pipeline: This 200 kms long

proposed pipeline would traverse through

Tiruvallur district in Tamil Nadu, Chittoor

district and Sri Potti Sriramulu Nellore district

in Andhra Pradesh.

Ÿ K.G. Basin Pipeline Network (GAIL): The

pipeline network covers East, West and

Krishna District in Andhra Pradesh and has a

length of about 800 kms from K.G. Basin

(onshore gas fields of ONGC) to cater to the

industrial needs in the three districts of Andhra

Pradesh.

Ÿ Vijayawada Nellore Pipeline: This pipeline

bridges the gap between KSPL and ENPL and

will cover the entire East Coast of Andhra

Pradesh. This proposed pipeline would

traverse through Sri Potti Sriramulu Dist.,

Prakasam, Guntur and Krishna Districts with a

length of about 350 kms.

Ÿ Tumkur to Nellore Natural Gas Pipeline: The

pipeline will cover Anantapur, Kurnool, YSR

Kadapa and Nellore districts. This will also

ensure the availability of gas to Andhra

Pradesh from Dhabol LNG Terminal of GAIL

through Dhabol-Bangalore Natural Gas

Pipeline as an alternative source and also form

a local gas grid covering Karnataka, Andhra

Pradesh and Telangana

Ÿ City gas d ist r ibut ion in major c i t ies

(municipalities and Class I Cities) of the State

to improve PNG and CNG supply for domestic,

commercial and industrial use

3. Optic Fibre Grid

The Government of Andhra Pradesh has pioneered

the usage of information technology for good

governance in the country. The Government has

identified e-governance and provision of access to

information technology to its citizens as a key to

inclusive and sustainable development of the State.

The Government of Andhra Pradesh has

envisioned 'Digital Andhra Pradesh' that is aimed at

bridging the digital divide, and enabling skill

development, to increase economic growth of the

State. The Government has targeted to make

Andhra Pradesh as one of the top three states in the

country in the Information Technology (IT) and

electronics sector.

In its endeavour to make people a part in the overall

development process and enhance the quality of

delivery of public services the government has

envisioned achieving the following among others

through a mission mode:

Ÿ Establish a new State Data Centre

Ÿ To reach gigabit to all gram panchayats by

2017

Ÿ Last mile connectivity – all G2C and G2B

services to be made available online and on

mobile

Ÿ Redesigning the service delivery infrastructure

Ÿ Take Fibre to Village initiative

Under the 'Take Fibre to Village' initiative the

Government has fast tracked the development a

state wide optic fibre grid that would criss-cross

the length and breadth of the State.

Project features:

Ÿ One of the longest optic fibre grid in the

country with a length of 65,000 km under the

National Optic Fibre Network (NOFN) with an

end-to-end network right from the State to the

gram panchayats

Ÿ Aims to make available at least 10-15 Mbps

broadband connections to the 12 million

households in the State at a cost of Rs. 150 per

month

Ÿ On-demand availability of 100 Mbps to one

Gbps connection to every business enterprise

Ÿ The total cost of the project is estimated to be

about Rs. 6 ,000 crore with a capital

expenditure of Rs. 3,843 crore and operation

cost of Rs. 2,140 crore over the next ten years

Ÿ PPP/private sector participation to be

explored wherever possible

2929 40Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 39

Ÿ All the major National Highways carrying

substantial commercial traffic are to be

developed as 4 lane divided roads.

Ÿ Separate 2/4 lane roads connecting the

villages/ towns/ cities with 4 lane National

Highways.

Ÿ Other National Highways are to be developed

at least as 2 lane roads with 1.5 m wide paved

shoulders on either side (total 10 m width).

Ÿ National Highways to be developed as 4 lane

divided roads

In order to bring the long coastline available for

Andhra Pradesh to effective use, large scale

development of all the sea ports is being planned.

To facilitate quick movement of Cargo, all the

seaports are to be connected to the nearest 4 lane

National Highway with 4 lane divided roads

5. Power Grid

Andhra Pradesh has total 127.53 lakh households

(Rural - 88.59 lakh, Urban - 38.94 lakh), out of which

around 5.84 lakh are un-electrified. Other than

Households, Andhra Pradesh has 14.54 lakh

Agricultural connections and 1.53 lakh industrial

consumers.

The Government has planned a robust grid for

transmission and distribution of power in the State.

At present the power grid in the state is manage by

APTRANSCO for transmission and by APEPDCL &

A P S P D C L f o r d i s t r i b u t i o n . T h e p re s e n t

transmission infrastructure consists of 6 Nos. of

400 kV Substations, 72 Nos. 220 kV substations,

167 Nos. 132 kV substations and 18,907 Ckm of

EHT lines. The Distribution Network consists of

2,524 Nos. of 33/11 kV Substations, 9,264 Nos. of

Feeders (Urban - 2,114, Rural/Mixed – 5,375,

Dedicated / Express Industrial – 706, Others- 1069)

& 5.62 lakh of DTRs in the two DISCOMs.

Ÿ Under the grid the following is planned to be

taken up:

Ÿ Enable supply of excess energy into the grid

with the net-metering solar policy

Ÿ Providing parallel/ alternative sources of

power supply

Ÿ Alternative supply to 33 kV, 11 kV and LT

consumers

Ÿ Laying covered conductors for 33 KV & 11 KV

voltage levels

Ÿ Wedge connectors,

Ÿ Maintenance free earthing pits,

Ÿ Installation of substation monitoring software

Ÿ re-conductoring of existing lines

In addition, for coastal areas prone to cyclones and

religious towns, breakdown mitigation activities to

prevent outages such as replacement of over-

headlines with Under-Ground cables are planned at

a total capital expenditure of Rs. 3,019 crore.

APTRANSCO has planned 400 kV transmission ring

network around the cities of Vijayawada & Guntur

with three 400 kV substations and 440 km of Quad-

moose transmission lines to improve the reliability

of supply and minimize power disruptions with an

investment of Rs. 975 crore. The above schemes /

initiatives of APDISCOMs / APTRANSCO have been

included under the 'Power for All' scheme.

4. Roads Grid

The Government of Andhra Pradesh is planning to

create a Road Grid with the network of R&B /PR

roads that would provide smooth access to district

headquarters and to the National highways nearby

from all parts of the district besides facilitating

effective movement of Cargo to and from the sea

ports. The Government of Andhra Pradesh is

making endeavors to make this road grid a reality

within the next 5 years i.e., by 2019.

The targets of the Roads grid include the following:

Ÿ Connecting all habitations with at least a

single lane all weather black topped road with

the nearest Mandal headquarters

Ÿ Mandal headquarters in every district to be

connected the district headquarters and the

nearest National Highways with a properly

developed Black topped road of having a

minimum of 2 lane carriageway of 7 m width.

2929 42Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 41

of approximately 8 sq. km as the first section

of the capital city

Core Components:

Ÿ World's largest Outer Ring Road with 12 lane

and a length of about 200 km. at an estimated

project cost of USD 5,000 million

Ÿ World class urban infrastructure facilities for

solid waste management, water supply, street

lighting, storm water drainage, etc.

Ÿ Four Lane Highway connecting the New

Capital Region with the Rayalaseema Region

Investments:

Ÿ USD 30 billion in the next ten years

Ÿ Massive potent ia l for Publ ic Pr ivate

Partnerships

TourismAndhra Pradesh is recognized for its legendary

dynasties, its most revered temples, lacquer toys

and beautiful weaves, rich literature and vibrant

arts of Kuchipudi dance. The State is home to more

than 300 tourist locations including holy pilgrim

centres, attractive palaces, museums, ports, rivers,

beaches and hill stations. Tourism is a key

contributor to the State's economy and Andhra

Pradesh ranked 3rd in India in terms of domestic

tourist footfalls in 2013.

According to Government of India estimates, every

one crore that is invested in tourism sector creates

4 7 5 j o b s c o m p a r e d t o 1 2 6 j o b s f r o m

manufacturing sector. Realising the potential of the

sector, the Government has undertaken integrated

development approach for the sector to embolden

the State's stature as a major tourism hub in the

country. The Government's vision is "To maintain

its current position as the most sought-after

tourism destination for an authentic, luxurious, and

personalized feel and experience of Andhra

Pradesh for travelers from all regions.”

Andhra Pradesh Capital City The Government of Andhra Pradesh has proposed

to develop a world class capital city in the

Vijayawada-Guntur region. The Government has

enacted the Andhra Pradesh Capital Region

Development Authority Act 2014 for development

of the Capital Region.

Geographical Layout:

Ÿ The new capital will have a core city with a

peripheral capital region

Ÿ Core Region: 125 sq. km.

Ÿ Capital Region: 7,325 sq. km. within the

Vijayawada – Guntur – Tenali – Mangalagiri

boundary

Ÿ The Government is in the process of preparing

the Capital Region Plan for the Capital Region,

a Master Plan for the Capital City and a Seed

Development Master Plan for the construction

2929 44Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 43

Vijayawada and Tirupati

Ÿ Minor Spor ts Stad ium in a l l d is t r ic t

headquarters

International Schools

Ÿ Establishment of world-class educational

institutions at Visakhapatnam, Nellore and

Guntur

Golf Course

Ÿ D e v e l o p m e n t o f G o l f C o u r s e s a t

Visakhapatnam, Vijayawada and Nellore

Healthcare

Ÿ Set up a world class healthcare centre and

promote medical tourism in the State

Social Infrastructure

The Mission would coordinate with Urban

Development Mission and other missions for

speedy development of a few signature projects

that would enhance the overall quality of life in the

State:

Signature Tower

Ÿ Development of a Signature Tower at

Madhurawada with one million sq. ft. of

incubation space

Convention Centres

Ÿ Large Convention Centres with a capacity of

1 0 , 0 0 0 p e o p l e t o b e d e v e l o p e d a t

Visakhapatnam, Viajayawada and Tirupati

Ÿ Minor Convention Centres with a capacity of

4,000 people to be developed in all district

headquarters

Sports Stadium

Ÿ Large Sports Stadium at Vishakhapatnam,

2929 46Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 45

Chapter 4

Enablers

Given long gestation periods and lagged

realisation of investment for infrastructure,

enablers in the form of project implementation,

project management, enabling policy and

institutional mechanisms would be created to

support investment strategies to meet the set

targets.

Lifecycle Approach towards Infrastructure DevelopmentLaying the Foundation for the Sunrise State of Andhra

Pradesh

Given that infrastructure investments have

significant gestation periods and long life cycles,

the returns on investment are realised over an

extended period. In order to provide such stability

over the life cycle of a project, a holistic approach is

required. The Infrastructure Mission will follow an

integrated approach across the life cycle of project

as illustrated below:

Life cycle approach towards implementing infrastructure projects

29

Project Iden�fica�on and

Priori�za�on

Project Prepara�on

Project Appraisal and Approval

Project Award

Project Implementa�on

Project Monitoring

Project Closure

Need Analysis

Conceptualisa�on

Op�ons Analysis

Project Scoping

Bid Documents

Studies

Project Scoping

Project Structuring

Evalua�on Criteria

Bid Process Management

Contract Documenta�on

Monitoring &

Evalua�on Framework

Claims Management

Project Closure & Handover Formali�es

DPRs

Feasibility Report

EIAs

Value for Money

Resource Alloca�on & Mi�ga�on

1

2

3

4

5

6

7

Mode of Implementa�on

Exit Strategy and Transfer of Assets

The Mission will have a robust monitoring

framework and will track the progress of the

projects on a periodic basis. Al l the l ine

departments and concerned public agencies will be

Exhibit 13: Performance Management and Delivery Unit (PEMANDU) – A Radical and Transformational Approach by Malaysia

involved from the project conceptualisation phase

for imbibing a cul ture of ownership and

accountabi l i ty towards achieving project

outcomes.

In 2009, the Government of Malaysia integrated the

Tenth Plan with two additional components – (1)

Economic Transformation Programme and (2)

Government Transformation Program. A new

methodology of initiating and managing 'labs' was

unveiled to serve as a catalyst by working in

partnership with the community to ensure

continued growth. Since its inception, this lab

methodology has spurred economic development

and social upliftment. This mechanism came to be

known as the Performance Management and

Delivery Unit (PEMANDU). Below is a snapshot of

the objectives of this institution, the process

adopted and its achievements in last three years.

PEMANDU's methodology has gained international

recognition with adoption from Tanzania, South

Africa and Maharashtra in India. Their India

program titled 'Water for All – Drought Free

Maharashtra' Lab was conducted from February to

June 2014. The lab was estimated to impact 115

million people through thirty two detailed initiatives

that were identified and developed by the lab.

2929 50Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 49

Across the project life cycle, the Infrastructure

Mission will create well defined interventions to:

Ÿ Enhance the operating environment of the

sector through policy and regulatory

streamlining

Ÿ Enable better procurement by supporting

Departments on the procurement process

Ÿ Provide optimal structures and risk mitigation

support for enhancing project sustainability

Ÿ Inter departmental coordination for quick

turnaround

Ÿ Monitoring of both processes and outcomes

to provide feedback into policies, institutions

and processes

The Infrastructure Mission will help enable each of

these phases of the life cycle through calibrated

interventions in the form of policies, institutions

and processes.

The Government of Andhra Pradesh under the

leadership of the Hon'ble Chief Minister has

already undertaken several initiatives towards

building an enabling framework for facilitating

infrastructure development in the State. The key

policy initiatives include formulation of:

Ÿ Industrial Water Policy

Ÿ Electronics Policy

Ÿ Innovation and Start-Up Policy

Ÿ IT Policy

The Government will further strengthen the

institutional mechanisms for augmenting and

catalysing investments in the infrastructure

sectors. The initiatives will address policy and

process related issues pertaining to infrastructure

development. Some of the proposed interventions

to strengthen the ecosystem are:

Policies

Ÿ Formulate the Andhra Pradesh Public Private

Partnership Policy including the Swiss

Challenge Route to encourage PPPs as a

mechanism for creation of Infrastructure

Ÿ Promote cargo development through

formulation of an integrated industrial policy

(industrial and transportation, logistics) and

linkages to hinterland

Ÿ Formulation of Andhra Pradesh Port Policy

and enactment of Andhra Pradesh Maritime

Board Act

Ÿ Enactment of a Special Investment Region Act

for development of the industrial corridors

Ÿ Review of the Cabotage Law to address

bottlenecks in cargo movement through ports

Institutions

Ÿ R e s t r u c t u r i n g o f t h e I n f r a s t r u c t u re

Corporation of Andhra Pradesh (INCAP) along

t h e l i n e s o f G u j a r a t I n f r a s t r u c t u r e

Development Board (GIDB) and Tamil Nadu

Infrastructure Development Board (TNIDB)

Ÿ Establishment of the Andhra Pradesh

Economic Development Board as the apex

board to shape policy issues, undertake

overal l macroeconomic planning and

investment- related aspects

Ÿ Sector-wise infrastructure development and

operations regulators

Ÿ Long term financing institutions

Ÿ The Government would set up a land bank

with an initial stock of 0.4 million hectares. An

appropriate entity shall be established for

managing the land bank

Processes

Ÿ Create a framework for identification,

appraisal and prioritisation of a shelf of

credible and bankable infrastructure projects

Ÿ A process for undertaking of Value for Money

assessment for the identified shelf of projects

Ÿ Empanelment of consultants for various

sectors - Roads, Port, Airports, Railways

Power Gas, Urban Infrastructure urban

transport, tourism, Water, Environment, Legal,

F inancial Advisory, Education, health

Infrastructure etc.

Ÿ Formulation of guidelines for Stakeholder

Engagement and Communication for early

addressing of issues

Ÿ A comprehensive capacity building program

to train a pool of government officials across

line Departments and levels on critical aspects

relating to infrastructure projects

Ÿ Streamlining proposal processing including

multi-department projects, setting turnaround

times and designing of an online/automated

processing system

Ÿ Development of an IT enabled post award

monitoring and governance system for

projects across their lifecycle

2929 52Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 51

Chapter 5

Resources

To meet the investment outlay of INR 12.4 lakh

crore, resources beyond available public funding

would be required to fund infrastructure

investment in the State.

Sector

Investment (Rs Cr)

Roads

2,69,776

Power 2,69,691 Ports 84,000 Rail 39,095

Telcommunica�ons 2,42,251

Inland Waterways 2,757

Water 2,82,540

Airports

20,184

Gas

34,200

Total

12,44,494

In order to achieve ambitious infrastructure

development targets set under this Mission, it is

estimated that investments to the tune of INR 12.4

lakh crore is required for infrastructure

development between FY 2015 – 2029. This is

estimated as investment in core infrastructure and

is expected to trigger secondary and ancillary

investments in other infrastructure and related

services, manifold in value. This investment will be

spread across the identified sectors as follows:

Resource AugmentationThe quantum of investment envisaged under the

Andhra Pradesh Infrastructure Mission is

substantial and unprecedented. Given the national

and regional macro economic conditions,

traditional models of funding alone will not suffice.

The following is a list of various traditional and

non-traditional funding sources that are proposed

to be tapped for investment in the Infrastructure

Mission projects:

Budgetary Support from the State Government: ŒŸ a. Land Acquisition Fund:

Ÿ A budgetary allocation will be made to meet

land acquisition costs for key infrastructure

projects.

Ÿ b. Project Development Fund:

Ÿ The Government has identified a total of 122

projects to be implemented in the State as a

part of Infrastructure Action Plan. To facilitate

the development of these projects, it is

proposed to constitute a Project Development

Fund with adequate budgetary support.

Ÿ The Project Development Fund shall be

utilised to provide financial support for

conducting project preparatory studies,

obtaining the services of subject matter

experts and consultants, preparing project

reports (such as Feasibility Studies, Detailed

Project Reports , etc. ) , and conduct ing

research and knowledge management

activities (such as capacity building).

Ÿ c. Project Investment Fund:

Ÿ To facilitate the development of PPP projects

envisioned under the Infrastructure Action Plan,

it is proposed to constitute a Project Investment

Fund. This Fund shall be utilised to provide

financial support to PPP concessionaires to

f a c i l i t a t e d e s i g n , d e v e l o p m e n t a n d

implementation of PPP projects. The nature of

support is envisioned to include:

Ÿ a. Subsidy/capital grant (with appropriate

ceilings as per applicable provisions)

Ÿ b. Equity

Ÿ c. Loans

Ÿ d. Government guarantees

Ÿ e. Annuities

Ÿ f. Other innovative modes

Budgetary Support from the Central Government: �Government of Andhra Pradesh will seek requisite

support from the Central Government through

statutory and other channels for development of

critical infrastructure projects including the Capital

City Development.

Non-Budgetary Sources:ŽŸ To mobilise the investments required for the

Infrastructure Mission's targets without

adding to the fiscal burden of the State or

Central Government, it is proposed to generate

investments through the following non-

budgetary channels.

Ÿ Infrastructure Financing Vehicles: It is proposed

to mobilise resources for infrastructure

projects by launching Infrastructure Financing

Vehic les which serve as specia l ised

investment mechanisms operating without

government guarantees. These Infrastructure

Financing Vehicles could be in the form of

Alternative Investment Funds and /or

Infrastructure Development Fund – Mutual

Fund, formed in accordance with SEBI

guidelines.

Exhibit 15: Tamil Nadu Infrastructure Finance Company (TNIFMC)

TNIFMC will establish and manage new

Infrastructure Finance Vehicles (IFVs) to

augment the resource base for infrastructure

financing in the State by accessing different

pools of investible funds:

Ÿ An Infrastructure Debt Fund (IDF)

Ÿ An Alternative Investment Fund (AIF)

(Category I)

Ÿ An Infrastructure Investment Trust (InvIT)

TNIFMC is the first of its kind infrastructure

financing initiative by any State Government in

India. The TNIFMC is proposed to be promoted

in partnership with highly reputed banks and

financial Institutions, preferably in the public

sector. The financing role envisaged is larger,

covering both loan and equity to both public

and private sector entities. TNIFMC will extend

to all the 21 infrastructure sectors enumerated

in TNIDB

Ÿ c. Corridor Development Fund:

Ÿ It is proposed to mobilise resources through a

Corridor Development Fund along the lines of

the Delhi Mumbai Industrial Corridor Project

Development Fund for developing the trunk

and link infrastructure for the two Industrial

Corridors, viz., Vizag Chennai Industrial

Corridor and the Chennai-Bengaluru Industrial

Corridor.

State and Central Public Sector Units: �Suitable models for raising funds for infrastructure

development will be explored in collaboration with

State and Central Public Sector Corporations

especially in sectors such as transportation,

mining, power etc.

2929 56Sunrise State of Andhra Pradesh: Infrastructure Mission Sunrise State of Andhra Pradesh: Infrastructure Mission 55

Funding from External Agencies:� Funding support for key projects would be sought

from multi-lateral and bi-lateral agencies such as

ADB, World Bank, JICA, KfW etc.

Private Sector Participation: ‘Private sector role in infrastructure development

has increased substantially over the last two

decades. Twelfth Plan estimates about 50 percent

of the total investment in Infrastructure at the

national level is expected to come from the private

sector. Andhra Pradesh seeks to proactively tap

into private sector funding through the PPP mode

for all projects feasible for private participation.

Exhibit 16: Growth of Private Sector in the Total Infrastructure Outlay

Risk OptimisationThe inherent characteristics of well planned

infrastructure in generating stable cash flows in the

lower risk, operational phase makes it globally a

popular vehicle for private investment. However, in

the face of continuing market inefficiency, poor

forecasting abilities and inadequate tariffs that

cannot be sufficiently addressed by regulation,

new models are now needed for economic

infrastructure to attract market appetite for private

sector investment,under which the government

shares or retains demand risk are now needed for

economic infrastructure to attract market appetite

for private sector investment. In the 2015 Union

Budget speech the Finance Minister mentioned

that the Government shall evaluate existing

policies and consider taking more risk on PPP

projects.

In cognisance of the above risk sharing framework, Government of Andhra Pradesh will evaluate suitable

models for different categories of projects for infrastructure creation, operation and maintenance.

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Key Contacts

Principal Secretary

Chief Minister’s Office

Phone: 91-40-23476623

Email: prlsecy.apcm@gmail.com

apcmoscp@gmail.com

Spl. Chief Secretary to Government

Planning Department

Phone: 91-40- 23456026

Email: sptucker@ap.gov.in

sptucker@rediffmail.com

Secretary

Energy, Infrastructure & Investment Department

Phone: 91-40-23452499

Email: prlsecy_infra@ap.gov.in

Principal Secretary

Industries and Commerce Department

Phone: 91-40-23450456

Email: prsecy_cip_inds@ap.gov.in

Knowledge Partners

Capital Fortunes Private Limited

www.capitalfortunes.com

Athena Infonomics

www.athenainfonomics.in

Vice Chairman & Managing Director

Infrastructure Corporation of AP

Phone: 91-40-23321771

Email: md@incap.co.in

Commissioner of Industries

Commmissionerate of Industries

Phone: 91-40-23441666

Email: commr_inds@ap.gov.in

Vice Chairman and Managing Director

AP Industrial Infrastructure Corporation

Phone: 91-40-23212798

Email: ed_k@apiic.in

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Petroleum and Natural Gas regulatory Body

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