India: Visakhapatnam–Chennai Industrial Corridor Development Program

Sovereign Project | 48434-005

The Visakhapatnam-Chennai Industrial Corridor Development Program (VCICDP) will complement the ongoing efforts of the Government of Andhra Pradesh (GoAP) to enhance industrial growth and create high quality jobs. The VCICDP comprises a multitranche financing facility (MFF), a grant, and a policy-based loan (PBL). The MFF and the grant will support priority infrastructure investments in the Visakhapatnam-Chennai Industrial Corridor (VCIC) and the PBL will support policy reforms and institutional development in the state. The technical assistance will support the implementation of policy reforms, especially in strengthening institutions for corridor management, improving ease of doing business, and providing capacity building support.

Project Details

  • Project Officer
    Matsunaga, Akira
    South Asia Department
    Request for information
  • Country
    India
  • Modality
    • Loan
    • Technical Assistance
  • Sector
    • Industry and trade
Project Name Visakhapatnam–Chennai Industrial Corridor Development Program
Project Number 48434-005
Country India
Project Status Closed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3424-IND: Visakhapatnam-Chennai Industrial Corridor Development Program
Ordinary capital resources US$ 125.00 million
TA 9173-IND: Capacity Development for Industrial Corridor Management in Andhra Pradesh
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Private sector development
Sector / Subsector

Industry and trade / Large and medium industries

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The Visakhapatnam-Chennai Industrial Corridor Development Program (VCICDP) will complement the ongoing efforts of the Government of Andhra Pradesh (GoAP) to enhance industrial growth and create high quality jobs. The VCICDP comprises a multitranche financing facility (MFF), a grant, and a policy-based loan (PBL). The MFF and the grant will support priority infrastructure investments in the Visakhapatnam-Chennai Industrial Corridor (VCIC) and the PBL will support policy reforms and institutional development in the state. The technical assistance will support the implementation of policy reforms, especially in strengthening institutions for corridor management, improving ease of doing business, and providing capacity building support.
Project Rationale and Linkage to Country/Regional Strategy

While India has seen a rapid structural transformation and achieved strong economic growth since 1991, one of the most pressing policy challenges is to create more productive and well-paying jobs in manufacturing and services which has lagged with a contribution GDP. India has adopted an industrial corridor approach to stimulate manufacturing and an Act East policy to integrate the Indian economy with Asia's dynamic global production networks. The industrial corridor approach involves the creation of an efficient multimodal transport network supported by quality infrastructure and logistics within a defined geography, and a policy framework that facilitates business operations for integration with global production networks.

In line with these policies, the government and the Asian Development Bank (ADB) identified the East Coast Economic Corridor (ECEC) India's first coastal corridor extending over 2,500 kilometers (km) from Kolkata in West Bengal to Tuticorin in Tamil Nadu. The VCIC, which covers more than 800 km of coastline in Andhra Pradesh, is proposed to be developed as the first phase of the ECEC. In the state of Andhra Pradesh, which has 49.4 million people making it the 10th most populous state in India, the manufacturing sector contributes 12% to the state's GDP lagging the national average of 15%. There is a pertinent need to usher in greater degree of industrialization in the state by addressing challenges such as low industrial diversification, and concentration of manufacturing sector employment in small, labor-intensive, informal enterprises with low skills, productivity, and earnings. Key infrastructure in industrial clusters remains inadequate to support the burgeoning demand for efficient industrial infrastructure and robust skills inventory. It also needs to further improve its procedures for doing business, labor-related laws, land management, and taxation laws if it is to enhance its competitiveness and benchmark itself with other countries in the region such as Singapore, the Republic of Korea, and Malaysia. The VCICDP is in line with ADBs country partnership strategy for India.

Impact Contribution of the manufacturing sector to the gross domestic product, trade and employment of GoAP increased
Project Outcome
Description of Outcome Growth and competitiveness of the VCIC enhanced.
Progress Toward Outcome The policy-based lending (PBL) is completed. Implementation support for strengthening institutions and improving ease of doing business is ongoing through CDTA.
Implementation Progress
Description of Project Outputs

Corridor management strengthened and ease of doing business improved.

Visakhapatnam-Chennai Industrial Corridor infrastructure strengthened and more resilient.

Institutional capacities, human resources, and program management strengthened.

Status of Implementation Progress (Outputs, Activities, and Issues)

1. The Government of Andhra Pradesh (GoAP) has complied with all 12 policy loan conditions under Tranche 1 of PBL in 2017 (see below the summary of compliance). Tranche 1 amount of $62.5 million was released on 1 Feb 2018.

2. The GoAP has complied with the conditions of Tranche 2. Considering the good current progress, $62.5 million for Tranche 2 was released in October 2019.

3. The Capacity Development for Industrial Corridor Development consultant was mobilized in August 2017. It supports the GoAP to monitor the progress, comply the necessary policy actions, implement the institutional strengthening and investment promotion. The CDTA is currently supporting the state government to develop Green Corridor Concept Framework aimed at making VCIC a green manufacturing hub that promotes sustainable economic growth, while mitigating the environmental and social impacts.

(Summary of major compliances)

Output 1. Corridor management strengthened and ease of doing business improved (by 2024)

1a. Corridor management institutions established and operational:

(1) The GoAP has issued the ordinance for establishing Andhra Pradesh Industrial Corridor Development Authority (APICDA) on October 6, 2017. It has been operationalized with human resources plan and business plan on 29 April 2019.

(2) The GoAP issued Government Order on October 31, 2017 for the formation of SPVs at all VCICs. The GoAP incorporated two SPVs: the Visakhapatnam Industrial Node Development Corporation Limited on 4 September 2018; and the Chittoor Industrial Node Development Corporation limited on 10 October 2018.

(3) The GoAP approved on October 10, 2017 the roadmap for project development mechanism. GoAP has sanctioned the project development facility under the PDM on 20 June 2018.

(4) The dedicated investment promotion agency has been formed in Economic Development Board (EDB) via Government Order issued on March 17, 2016. The EDB has conducted two international investor conferences.

1b. States rating remains in top five on Ease of Doing Business:

(5) Single desk policy has been notified via Government Order dated June 6, 2016 and operationalized across the state subsequently.

(6) Lands for industrial use have been identified in Vizag and Chittoor note in the survey report. The state government launched a land database for industrial nodes readily available online to investors.

1c. New e-portal and single-desk system operational for issuing business-related licenses to more than 90% of the applicants:

(7) e-Portal has been established and operationalized across the state under the Single Desk Policy for online applications for doing business and related government incentives.

1d. New industrial and sector policies notified and implemented with fiscal incentives and special packages for women entrepreneurs:

(8) New industrial and sector policies has been implemented after the notification via Government Order on April 29, 2015. $45.8 million was granted to 999 industrial units in the four VCIC nodes during FY2017 and FY2018. Special incentives worth $4.5 million were offered to 408 female entrepreneurs.

Output 2. Visakhapatnam-Chennai Industrial Corridor Infrastructure [under L3430/G0495-IND: VCICDP - Project 1]

Output 3. Institutional capacities, human resources, and program management strengthened 3a. Skill enhancement programs conducted for at least 25,000 persons (at least 20% women), including workers, entrepreneurs, and students

(9) A road map for skill development has been approved by APSSDC on September 13, 2017. In FY2018, the APSSDC has run trainings to 28,156 candidates of whom 9,781 or 34.7% were women.

Geographical Location Andhra Pradesh
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The PBL is categorized as B for environment, and measures will be taken for the assessment and mitigation of likely induced impacts resulting from the expected increase in industrialization.
Involuntary Resettlement The PBL is categorized as C for involuntary resettlement as it is not anticipated to have any impacts.
Indigenous Peoples The PBL is categorized as C for indigenous peoples, as it is not anticipated to have any impacts.
Stakeholder Communication, Participation, and Consultation
During Project Design Stakeholders consultations were conducted during preparation of the PBL.
During Project Implementation Continuous widespread consultations are being held with all stakeholders.
Business Opportunities
Consulting Services Not Applicable
Procurement Not Applicable
Responsible ADB Officer Matsunaga, Akira
Responsible ADB Department South Asia Department
Responsible ADB Division Urban Development and Water Division, SARD
Executing Agencies
Department of Industries & Commerce, Government of Andhra Pradesh
[email protected]
North H Block, 3rd Floor, AP Secretariat
Hyderabad, 500022
Timetable
Concept Clearance 11 Jan 2016
Fact Finding 18 Nov 2015 to 26 Nov 2015
MRM 07 Apr 2016
Approval 20 Sep 2016
Last Review Mission -
Last PDS Update 08 Oct 2020

Loan 3424-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
20 Sep 2016 23 Feb 2017 05 May 2017 31 Dec 2019 - 25 Oct 2019
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 125.00 Cumulative Contract Awards
ADB 125.00 29 Sep 2021 125.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 29 Sep 2021 125.00 0.00 100%

TA 9173-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
20 Sep 2016 19 Apr 2017 19 Apr 2017 31 Dec 2019 31 Dec 2020 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 0.00 0.00 0.00 0.00 1,000,000.00 29 Sep 2021 928,424.60

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

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Title Document Type Document Date
Visakhapatnam–Chennai Industrial Corridor Development Program: Technical Assistance Consultant’s Report Consultants' Reports Nov 2020
Visakhapatnam–Chennai Industrial Corridor Development Program: Progress Report on Tranche Release Progress Reports on Tranche Releases Sep 2019
Program Agreement for Loan 3424-IND: Visakhapatnam-Chennai Industrial Corridor Development Program Project/Program Agreements Feb 2017
Grant Agreement (Externally Financed) for Grant 0495-IND: Visakhapatnam-Chennai Industrial Corridor Development Program - Project 1 Grant Agreement Feb 2017
Project Agreement for Loan 3430 and Grant 0495-IND: Visakhapatnam-Chennai Industrial Corridor Development Program - Project 1 Project/Program Agreements Feb 2017
Loan Agreement (Ordinary Operations) for Loan 3430-IND: Visakhapatnam-Chennai Industrial Corridor Development Program - Project 1 Loan Agreement (Ordinary Resources) Feb 2017
Loan Agreement (Ordinary Operations) for Loan 3424-IND: Visakhapatnam-Chennai Industrial Corridor Development Program Loan Agreement (Ordinary Resources) Feb 2017
Visakhapatnam-Chennai Industrial Corridor Development Program: Report and Recommendation of the President Reports and Recommendations of the President Aug 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Facility Administration Manual Facility Administration Manual Aug 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Gender Equality and Social Inclusion Action Plan Gender Action Plans Aug 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Framework Financing Agreement Framework Financing Agreement Jul 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Procurement Plan Procurement Plans Mar 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Feb 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Concept Paper Concept Papers Feb 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Project Data Sheet (हिन्दी) Translated PDS Jan 2016

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Visakhapatnam-Chennai Industrial Corridor Development Program: Rajnagaram-Samarlakota Road Subproject Resettlement Plan Resettlement Plans Apr 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Naidupeta Internal Infrastructure and Facilities Land Acquisition and Resettlement Due Diligence Report Safeguards Due Diligence Reports Apr 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Visakhapatnam Energy Subproject (APTransco 01) Resettlement Plan Resettlement Plans Apr 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Yerpedu-Srikalahasti Energy Subproject (APTransco 03) Resettlement Plan Resettlement Plans Apr 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Visakhapatnam Water Supply Subproject Resettlement Plan Resettlement Plans Apr 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Resettlement Framework Resettlement Frameworks Apr 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Atchutapuram and Naidupeta Effluent Treatment Plants Land Acquisition and Resettlement Due Diligence Report Safeguards Due Diligence Reports Apr 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Indigenous Peoples Planning Framework Indigenous Peoples Planning Frameworks/Indigenous Peoples Development Frameworks Apr 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Visakhapatnam Energy Subproject Initial Environmental Examination Initial Environmental Examination Mar 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Rajnagaram-Samarlakota Road Subproject Initial Environmental Examination Initial Environmental Examination Mar 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Visakhapatnam Water Supply Subproject Initial Environmental Examination Initial Environmental Examination Mar 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Environmental Assessment and Review Framework Environmental Assessment and Review Framework Mar 2016
Visakhapatnam-Chennai Industrial Corridor Development Program: Naidupeta Economic Zone Subproject Initial Environmental Examination Initial Environmental Examination Mar 2016

Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Procurement Expert Individual - Consulting Closed 11 Nov 2017 20 Nov 2017
Capacity Building Expert for Water and Wastewater Component Individual - Consulting Closed 01 Aug 2017 07 Aug 2017

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Capacity Development Technical Assistance 9173 02 Aug 2017 PricewaterhouseCoopers Private Limited, IND(INDIA) in association with PricewaterhouseCoopers Consultants (Shenzhen) Limi(CHINA,PEOPLE'SREP.OF) | #8-2-293/82/A/1131A; Road No. 36, Jubile derabad, India/Andhra Pradesh 500 034 In 17th Flr,Bldg10,TowerC,DLF Cyber City Gu Dept of Industries & Comm, Govt of Andhra Pradesh 648,912.00