Tuesday , 12 November 2019

Thiruvananthapuram Outer Area Growth Corridor An Infrastructure backbone for Vizhinjam Harbour

Apart from proximity to upcoming ICTT, Vizhinjam, the project location can derive benefit from its proximity to the aerospace center of VSSC, IT Hub of Technopark, and around 40 major tourist locations including Kovalam, Varkkala, Poovar and Ponmudi in the Capital region.

Further the several reputed higher education institutions in the capital region, including IISER, would help offer the much needed knowledge networks required for a high tech economic city.

Presence of many good quality health care institutions and multiple cultural institutions in capital region would help compliment the social infrastructure to achieve the desired levels of quality of life.

Project Outlay

The project envisages a capital expense of approx Rs 20 billion for construction of the transit corridor. In addition, the projected cost of land (about 600 hectares) for Right of Way (60 meter for road section and 10 meter for green cover area) of the transit corridor would be Rs 30 billion. The cost of land (about 600 hectares) for multiple development zones identified would be Rs 20 billion and the cost of public infrastructure in the SIR would be Rs 12 billion.

Thus the expected total capital outlay for the project over the expected development period of 10 years would be approx_ INR 82Bn

Project Financing Framework

A project of such significant investment will require skillful financial engineering to help cost effective resource mobilization and financial sustainability. The proposed financing strategy aims at mobilizing both public and private resources using cost effective financing instruments and use appropriate value capture framework to finance the project cost

Capex for the transit corridor has been agreed in principle by MoRTH/NHAI to be funded under the Bharatmala scheme of Government of India and value capture financing shall be from a mix of user fee and infrastructure development charges / property tax revenues for the access controlled corridor.

The land cost is expected to be financed through an innovative scheme of Land Bonds which will aim to finance the cost of acquisition by capturing the value enhancement in real estate and additional economic activities generated by the project.

Land pooling approach will be actively promoted to help interested land owners become entrepreneurs by making land availability to investors/developers to engage and implement jointdevelopment projects.

Strategy for Infrastructure Development in SIR

Role of Development Partners

Government of Kerala is keen to partner with Development Finance Institutions to help mobilize adequate resources to complement the public funds. The Government is also keen to invite globally reputed agencies to develop and/ or operate infrastructure and utility services in multiple formats including EPC, Hybrid Annuity model (HAM) and DBFOT.

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