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Andhra seeks Rs 31,000 crore central aid

July 31, 2007 18:56 IST

Andhra Pradesh Chief Minister Dr Y S Rajasekhar Reddy on Tuesday sought a massive central assistance of over Rs 31,000 crore (Rs 310 billion) for accelerating the development in various sectors in the state.

During the review meeting chaired by Prime Minister Dr Manmohan Singh on the agriculture, infrastructure and other sectors in the state today, the chief minister pleaded for assistance of R 11,200 crore (Rs 112 billion) for modernisation of Godavari, Krishna and Penna deltas and the canal network under Nagarjunasagar. He also sought Rs 6,564 crore (Rs 65.64 billion) for the agriculture and allied
sectors, one-time grant of Rs 3,258 crore (Rs 32.58 billion) and Rs 1,550 crore (Rs 15.50 billion).

The chief minister requested the PM to sanction total assistance of Rs 8,800 crore (Rs 88 billion) for revenue, energy, urban development, industries, road transport, panchayat raj and railway sectors. He wanted assistance of Rs 1,550 crore for Bhoo Bharathi (land survey) project to provide conclusive title deeds to 3.47 land holders and property owners in the state.

He also sought viability gap funding from the Prime Minister and the Central team for the Inter-City High Speed Rail Corridor between Visakhapatnam and Hyderabad via Dornakal connecting Vijayawada, Chennai and Bangalore. This will be connected to the already proposed high speed rail corridor of Mumbai-Delhi.

This will integrate emerging cities in Deccan and Southern parts of India into one large metro grid to enhance social, leisure, tourism, infrastructure, and business connectivity.

"This project will use the potential high-speed passenger traffic as a productivity fillip for new niche markets on the corridors and nodes and will de-congest intra-city and encourage inter-city business opportunities. The project must be taken up by the Indian Railways on a Public Private Partnership or Special Purpose Vehicle model with direct Viability Gap Funding (VGF) from the Centre. This high speed rail corridor will facilitate the common people to go to any of these cities in the morning and come back in the evening," he explained.

Bhoo Bharathi, he said, involves resurvey operations using space technology for aerial photography, Geographical Information System (GIS) and Differential Global Positioning System (DGPS) imposed upon digitised cadastral maps. The concept is proven and is being successfully implemented as a pilot project in Nizamabad.

The chief minister also raised the gas supply issue and explained that the existing gas-based power projects (1,276 MW) are operating only at 50 per cent capacity due to non-supply of gas and the new gas based power projects (1,500 mw) are completely lying idle.

Gas Authority of India Limited has not honoured the commitment to supply adequate gas. As a result, the state government would have to bear additional financial burden of Rs 4,000 crore (Rs 40 billion) to procure expensive power.

"Production sharing contract under New Exploration Licensing Policy (NELP) has a provision to opt for Profit Petroleum in kind. This option is to be exercised for supply in kind from Krishna –Godavari Basin to these stranded assets. The Union government should ensure supply of Profit Petroleum in kind to gas-based power projects in AP," he added.

As far as Pricing Policy for gas is concerned, the Chief Minister explained that in the absence of a competitive market in a monopoly situation, "Market Price Discovery" is not possible. Production Sharing Contract under NELP provides for pricing methodology to be referred to an independent Regulatory Authority.

The state government already addressed the Union government on the need to establish a Regulatory Authority in the current market context. Expert Committee of Planning Commission has also endorsed this view.

"The state government urges the Union government to set up an independent market regulator to scrutinise the methodology for pricing of natural gas. Tariff Commission has recommended lower tariffs to be charged by GAIL to implement these recommendations. Tariff Commission has recommended lower tariffs for gas to be charged by GAIL. Tariff Commission also directed excess charges of Rs 606 crore (Rs 6.06 billion) recovered between 1997 and 2006 are to be returned to the State," he said, and recalled that the PMO referred the matter to the Planning Commission which confirmed Tariff Commission recommendations.

He said that the AP government has set up a company to develop pipeline infrastructure on 'common-carrier' basis. He sought the Union government's approval for Krishna-Godavari Gas Network Limited (KGGNL), a Public Private Partnership company, to lay gas pipelines in the state. "Ministry of Petroleum and Natural Gas is insisting on a binding gas supply contract. Risk in laying pipeline is to be entirely borne by Krishna-Godavari Gas Network Limited (KGGNL). Any further delay in laying of gas pipeline will hamper gas requirements of all regions of state. The state
government is seeking allocation of a part of the Centre's profit gas from KG basin to AP for KGGNL," he added.

Among other projects, he sought central assistance for the refinery project by ONGC at Kakinada and a Petrochemical investment region in Visakhapatnam.

The chief minister also pleaded for central assistance for Hyderabad Metro Rail Project (MRTS) and development of Hyderabad Outer Ring Road (ORR) Project, bypassing National Highways 7&9 through Hyderabad city.

The state also wanted upgradation of 17 important state roads into National Highways. Upgradation proposals covering a length of 4950 kms were already submitted to the Union government. The state also requested for assistance for a major bridge over Rayapatnam, Nizamabad-Jagadalpur of NH-16, another major bridge across river Godavari and re-alignment of NH-202 from Eturnagaram to state border.

Syed Amin Jafri in Hyderabad
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