India : Infrastructure Development of Industrial Estates in Tripura

Industry and trade / Industry and trade sector development - Small and medium enterprise development - Trade and services

Tripura's vision is that manufacturing sector employment will be increased from 1.79% (Census of India, 2011) to 4.5% in 2030. The state has established rubber, food and bamboo parks to support existing and potential investors. It is felt that industrial cluster development has the potential to promote manufacturing growth and accordingly, Tripura Industrial Development Corporation Limited (TIDCL) has planned development of 15 industrial estates with the objective of industrial promotion, entrepreneurship development, and overall employment generation. ADB's Northeast Economic Corridor (NEEC) study report also recommended interventions for improved industrial development in Tripura through integrated approach of planning and design, and identified needs for integration of industrial infrastructure development with logistic parks, transportation and trade facilitation at various locations in Tripura.

The Government of Tripura (GOT), through its Department of Industries & Commerce (DoI&C) as the nodal agency, has applied for financial assistance through the Department of Economic Affairs, Ministry of Finance, Government of India under the project readiness financing (PRF) facility from the Asian Development Bank (ADB) in the form of a 'loan for improving readiness of Infrastructure Development in Industrial Estates in Tripura.

The PRF will ensure high readiness of the ensuing program/ project by delivering the following outputs, through mobilization of consulting services under the supervision of and coordination with the GOT, DoI&C, TIDCL, and ADB.

Output 1: Sector strategy and investment plans prepared. Output 1 will help (i) strengthen the industrial planning/ preparing industrial strategy and promotion requirements; (ii) prepare investment plans and action plans; and (iii) prioritize key subproject and infrastructure components.

Output 2: Feasibility study, detailed engineering designs, and due diligence of priority subprojects completed. Output 2 will focus on (i) feasibility studies and preparation of detailed engineering designs; (ii) social and environmental due diligence; (iii) economic and financial analyses; gender equality and social inclusion; (iv) climate and disaster resilience; and (v) procurement risk/ capacity assessment, strategic procurement planning, contract modalities, procurement plan, contract management plan(s); bid documents, tendering and bid processing.

Output 3: Institutional capacity development strengthened. This will include capacity building of DoI&C and TIDCL on financial, technical, safeguards, gender equality and social inclusion (GESI), procurement aspects, supporting in sector analysis, and developing the institutional strengthening and capacity development component. It will (i) review institutional capacities and current operation and maintenance practices; (ii) outline reform actions and scope to arrive at industrial development planning and processing framework/ mechanism under the ensuing loan, (iii) outline scope of institutional strengthening component of the ensuing project for sustainability of assets; and (iv) support planning, design, implementation, and management of PRF outputs, and ensuing project.

Tripura is a landlocked state in northeast India, bordering Bangladesh and Indian states of Assam and Mizoram. Tripura is primarily an agrarian State, having favorable climatic conditions for cultivation of various fruit and horticultural crops, however the state still has vulnerability to disaster-triggered natural hazards. It is rich in natural resources such as natural gas, rubber, bamboo, tea, and medicinal plants. In addition, it acts as a gateway between Northeast India and Bangladesh, with an 856-km international border with Bangladesh, offering good potential for international trade. About 39% of gross state domestic product in 20192020 is accounted by the primary sector, while tertiary sector accounts for about 45%, and about 14% accounted for by the secondary sector of which only 23% is manufacturing and remaining 77% is utilities and construction. Tripura has been connected to rest of India through railway and national highway network. This has created an opportunity for the state to bring in industrial development to harness its natural resources. Despite being a resource rich state, Tripura has limited capacity of value addition and monetization to address the challenges of industrial backwardness. Better connectivity network and upcoming cross-border infrastructure projects are taking care of geographical isolation and now there is a need to improve the contribution of manufacturing sector, increase employment in industry sector, reduce dependence on agriculture and create opportunities to develop cross-border synergies and integration.

Tripura's vision is that manufacturing sector employment will be increased from 1.79% (Census of India, 2011) to 4.5% in 2030. The state has established rubber, food and bamboo parks to support existing and potential investors. It is felt that industrial cluster development has the potential to promote manufacturing growth and accordingly, Tripura Industrial Development Corporation Limited (TIDCL) has planned development of 15 industrial estates with the objective of industrial promotion, entrepreneurship development, and overall employment generation. ADB's Northeast Economic Corridor (NEEC) study report also recommended interventions for improved industrial development in Tripura through integrated approach of planning and design, and identified needs for integration of industrial infrastructure development with logistic parks, transportation and trade facilitation at various locations in Tripura.

With the approval of advance contracting by ADB, TIDCL with ADB support has carried out procurement of individual consultants and initiated the recruitment of consulting firm following ADB's procurement Policy and Regulations. The experts in consulting firm recruited under PRF will enhance TIDCL's procurement and financial management capacities with oversight from ADB staff.

The procurement risk is classified as category B as there is no pilot testing activity being financed under this PRF loan. However, as part of the procurement arrangement assessment exercise, the agency's preliminary procurement assessment was conducted in August 2021. Based on the assessment findings, it has been observed that TIDCL does not have any prior experience of working with ADB or any other multilateral development banks, but TIDCL is carrying out procurement for consultants and other services for projects funded by state/ central government. TIDCL has established procurement systems like procurement unit, procurement committees for evaluation and approval of proposals and follow manual for Procurement of

Consultancy & Other Services, which focuses on efficient and realistic planning of the entire procurement process to ensure timely completion of the procurement cycle.