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.
|Project Name||Visakhapatnam–Chennai Industrial Corridor Development Program|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Gender Equity and Mainstreaming
Governance and capacity development
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.|
|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|
|Description of Outcome||Growth and competitiveness of the VCIC enhanced.|
|Progress Toward Outcome||The policy-based lending (PBL) is under implementation with good progress. It would help on timely achieving the outcomes.|
|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 started working on compliance of the conditions of Tranche 2. Considering the good current progress, the release of $62.5 million for Tranche 2 is expected ahead of schedule (December 2019).
3. The Capacity Development for Industrial Corridor Development consultant was mobilized in August 2017. It supports the GoAP to monitor the progress and comply the necessary policy actions.
(Summary of compliance of Tranche 1)
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.
(2) The GoAP issued Government Order on October 31, 2017 for the formation of two node level SPVs Vizag and Chittoor node.
(3) The GoAP approved on October 12, 2017 the roadmap for project development mechanism.
(4) The dedicated investment promotion agency has been formed in Economic Development Board (EDB) via Government Order issued on March 17, 2016. Global investment promotion event was held on January 2017.
(5) The Andhra Pradesh Road Safety Council approved the road safety policy on September 1, 2015 and available on website.
(6) The Board of APTransco approved on January 16, 2017 the road map to provide electricity supply as per standards prescribed by the State Electricity Regulatory Commission
1b. State's rating remains in top five on Ease of Doing Business:
(7) Single desk policy has been prepared and notified via Government Order dated June 6, 2016.
(8) A road map for skill development has been prepared and approved by APSSDC on September 13, 2017.
(9) Lands for industrial use have been identified in Vizag and Chittoor note in the survey report.
1c. New e-portal and single-desk system operational for issuing business-related licenses to more than 90% of the applicants:
(10) e-Portal has been established 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:
(11) New industrial policy notified via Government Order on April 29, 2015.
(12) DIC reform plan was approved on October 26, 2017. The reforms include rationalized organizational structure and staffing, office infrastructure, streamlined processes for single-point contact and linkages with the state-level single desk and e-portal systems.
Output 2. Visakhapatnam-Chennai Industrial Corridor Infrastructure
[under L3430/G0495-IND: VCICDP - Project 1]
Output 3. Institutional capacities, human resources, and program management strengthened
[under L3430/G0495-IND: VCICDP - Project 1]
|Geographical Location||Andhra Pradesh|
|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.|
|Consulting Services||Not Applicable|
|Responsible ADB Officer||Akira Matsunaga|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Urban Development and Water Division, SARD|
Department of Industries & Commerce, Government of Andhra Pradesh
North H Block, 3rd Floor, AP Secretariat
|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||24 Sep 2018|
|Approval||Signing Date||Effectivity Date||Closing|
|20 Sep 2016||23 Feb 2017||05 May 2017||31 Dec 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||20 Sep 2016||62.50||0.00||50%|
|Cofinancing||0.00||20 Sep 2016||62.50||0.00||50%|
|Approval||Signing Date||Effectivity Date||Closing|
|20 Sep 2016||19 Apr 2017||19 Apr 2017||31 Dec 2019||18 Aug 2020||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|1,000,000.00||0.00||0.00||0.00||0.00||0.00||1,000,000.00||20 Sep 2016||488,242.75|
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.
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ADB Approves Funds to Build India’s First Coastal Industrial CorridorADB today approved $631 million in loans and grants to develop the first key 800-kilometer section of a planned 2,500-kilometer-long East Coast Economic Corridor that will spur development on India’s eastern coast.
|Tender Title||Type||Status||Posting Date||Deadline|
|Procurement Expert||Individual - Consulting||Closed||11 Nov 2017||20 Nov 2017|
|Capacity Building Expert for Water and Wastewater Component||Individual - Consulting||Closed||01 Aug 2017||07 Aug 2017|
|Contract Title||Approval Number||Contract Date||Contractor||Contractor Address||Executing Agency||Contract Description||Total Contract Amount (US$)||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||—|
|Title||Document Type||Document Date|
|Visakhapatnam-Chennai Industrial Corridor Development Program: Procurement Plan||Procurement Plans||Mar 2016|