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UTTAR PRADESH

26 January 2015

4

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The remit of the authority is simple

enough: build expressways and then

develop the areas around them into

powerhouses of the nation by creating

industries, communities, infrastructure

and jobs. Thereby increasing the wealth

of the state overall. While some of the

projects being undertaken by the Authority

are modest, this is not something that

can be said about the country’s longest

expressway being built under the auspices

of the UP authority.

The first mega project will see 300

km of Expressway being built from Agra

to Lucknow. Scheduled for completion in

the next 21 months at a cost of a cool $3.5

billion, the Agra Lucknow Expressway

will single-handedly change commuting

dynamics for millions of residents of not

only UP and India but also of the million

of tourists and business people travelling to

the nation annually.

Navneet Sehgal (

pictured

), CEO of the

UP Industrial Expressway Development

Authority (UPEIDA), who has pursued

the project from the beginning, says the

expressway will not only reduce the travel

time from Agra to Lucknow to three

hours from six, but will also help to boost

economic activities. “This will open up

an entirely new area for development and

will give easy access to Delhi, which is the

biggest market for our agricultural produce.

Ours is an agricultural economy so we need

to provide a market to the farmers.”

Sehgal added: “Akhilesh Yadav had

desired that the green field expressway

should be designed to facilitate the

farmers and milk producers. Five farm

mandis [markets] will be developed along

the expressway. The Government will

also be developing cities alongside the

Expressway. This will benefit the masses in

UP and the expenditure of the project will

be realised through the toll tax.”

More than 3,200 hectares of land

passing through nearly a dozen districts

was required for the expressway. Officials,

led by Sehgal, worked overtime and

managed to acquire the land without much

confrontation with farmers in a record

six-month period. By November of last

year some 85 per cent of the land required

for the project had been acquired. Sehgal

states that the UPEIDA is “confident of

completing the work in 22 months”.

The process by which these roads are

planned and expressways are built is a very

competitive process with each aspect of

development opened up to tender for parties

both inside and outside India. Naturally, the

development of roads is not simply about a

single motorway. As Nirmal Singh, founder

of Lotus Greens, a real estate development

company in Noida and Gurgaon says,

“There are many other recent world-class

infrastructure projects undertaken in Uttar

Pradesh like the Yamuna Expressway,

Eastern Dedicated Freight Corridor, Metro

Extension and Delhi Mumbai Industrial

Corridor.”

The Yamuna Expressway, for instance,

is a 165 km long six-lane access-controlled

expressway connecting Agra and Delhi.

Along this expressway is the F1 racing

track, which has hosted F1 Grand Prix races

making the development famous globally.

The extension of the metro-rail to Greater

Noida, another growing city of UP, will

help to boost the infrastructure status of the

area further and attract additional investors

to this part of the country. The proposed

Eastern Dedicated Freight Corridor is set to

see huge development in the state covering

the Amritsar-Delhi-Kolkata industrial

stretch across four different states.

In an effort to expand its trade,

investments and export this growth spurt

can also be seen throughout the nation.

Some mega projects being planned by the

federal Government also complement and

augment the initiatives being carried out

by the state. The Delhi Mumbai Industrial

Corridor (DMIC) is one such mega project

being developed, that will both increase

the manufacturing and services base

and ultimately give other manufacturing

hubs throughout Asia and the rest of the

developing world a run for their money.

Manpreet Singh Chadha, vice chairman

of the Wave Group, a business conglomer-

ate that operates across various industries

says, “Over the last few years we have

seen major steps being taken by the state

Government to boost the situation of civic

amenities in UP. Due to its close proximity

to the national capital and cities like Noida

and Ghaziabad being a part of the national

capital region (NCR), Uttar Pradesh has

seen some major projects kick off and oth-

ers completed in the recent past.”

In addition to the Yamuna Expressway

and the Agra to Lucknow Expressway,

there are also three metro projects being

undertaken simultaneously in Noida,

Ghaziabad and Lucknow as well as a

monorail project. “Apart from this, the

Uttar Pradesh Government is also building

the first hi-tech city in Ghaziabad and

Lucknow which will definitely bring about

a huge change in the state over the course

of time,” says Chadha.

Generation, transmission,

distribution

It is not just about roads, railways and

metros. There is also a burning need for

investment in, and development of, the

energy sector in order to power the growth

of the state. Sanjay Agarwal, private

secretary for energy for the Government

of Uttar Pradesh is sanguine about the size

of the job ahead and the demands that will

be placed on the energy sector as the state

grows.

“Power is a catalyst for growth,” he

says. The Government’s agenda is to make

power available 24 hours a day to all places

within the state. At present, rural areas only

have power a set number of hours, often

only 17 hours per day. The Chief Minister

(CM), Akhilesh Yadav, has set an “always

on” target that will require around 22,000

megawatts (MW) of energy. “This is

more than double what we have at present

but is the very ambitious target we have

set ourselves,” says Agarwal. The state

currently produces 10,000 MW for itself.

Like all other mega projects being

undertaken by the state, success involves

dovetailing a large number of factors to

come together in harmony. In UP’s case

it involves not only production but also

distribution, for which the planning began

in 2013. By 2016 the state aims to have

lifted output levels to 17,500 MW from

10,000 MW. The balance required to reach

22,000 will be secured through a public

private partnership (PPP) deal with third

parties that have international expertise.

This is no small challenge. “Roughly

speaking, the investment in the transmission

sector in the five-year period from 2007 to

2012 in terms of new service stations was

about half a billion dollars,” says Agarwal.

“Apart from the increase of supply, one

of the most crucial things we want to do

is to increase coverage. There are over

170,000 rural hamlets at present that have

no electricity and the plan is to connect all

of them at a cost of $2 billion.”

All of the protagonists in this task

seem to be conscious of the size of the

opportunity. It is not for the faint hearted

and it is not for small players. The costs

are huge, but so are the rewards. “In the

energy sector, a major change is taking

place. These developments will not only be

good for the state but for the country and

the world. This is the CM’s vision. The best

thing is that his full support, and full trust is

there to see this achieved,” says Agarwal.

Continued from page 1

On the road

to progress

F

OOD

, food production and

food security are very much

part of the national agenda

which means that the state

of UP often has limited

room to manoeuvre when setting its own

food policy and prices. Even though the

state Government of Chief Minister (CM)

Akhilesh Yadav is pro-farmer more often

than not they have their hands tied due to

the national agenda. Acase in point came to

the fore in August 2014 as Indian inflation

unexpectedly skyrocketed, driven in large

part by a sharp rise in the price of food

basics resulting in the federal Government

of Narendra Modi to take two steps that

affected UP acutely.

The first move was to double the

minimum export price of onions, making

it far tougher for UP farmers to sell their

onions to foreign buyers. The second move

was when the Modi Government followed

up by doubling import tariffs on sugar from

overseas to support local farmers with the

price of domestic sugar jumping by 1.5 per

cent overnight.

With this type of mismanagement

many attribute to the Minister of Food

Processing in the Modi Government,

state Governments such as UP have found

it challenging to plan and budget for

their agriculture sector. The apparently

conflicting moves by the Minister at

the central level have made the Modi

Government look as if they are struggling

to forge a coherent national food policy.

The Yadav Government, a pro-farmer

party, realises that both food and farming

are highly sensitive political issues across

the nation and ones that have the power to

cut across the traditional divides of caste

and religion.

In UP food production is doubly

important. Alok Ranjan, Chief Secretary of

State for UP, explains, “We are the number

one producer in India of a wide range of

foodstuffs like wheat, sugar cane and we

are among the top few in the production of

vegetables.”

Why food is such a big deal is not hard

to see. Food and drink accounts for more

than half the weekly budget of around

one third of the nation’s households. The

people, the urban poor and the working

class, are voters as well as consumers

who are tired of seeing the purchasing

power of their earnings depleted by food

price inflation. This alone should be cause

enough for the Modi Government to focus

sharply on stabilising food prices.

Across the nation up to 70 per cent of

households live in rural areas and at least

part of their income stems from some form

of agriculture. Hence the mantra of the

Government of Uttar Pradesh is simple

indeed: it wants food prices to remain low

for urban consumers and its policy backs

this mantra up.

Wheat, rice, potatoes and oil seeds are

the major agricultural products produced

in the state however the most important

cash crop throughout UP is sugar cane and

the price of sugar is serious business in

the state. “We are great at growing sugar

cane,” says Akhilesh Yadav, Chief Minister

of UP (

pictured

). Every year the federal

Government sets the raw sugar cane price

that private sugar mills have to pay to all

sugar growers in pre-determined areas. On

the whole this works well, but not in a state

where sugar production is as high as it is

in UP. The state Government has dictated

that buyers from the sugar mills must pay

an extra premium added on top of the

federally mandated price to make it more

lucrative for farmers to use a greater

portion of their land for growing more

sugar cane.

The mills have to make a margin

between the price they are forced to buy

the raw sugar cane at and the market price

for processed sugar. The net result is that

they often claim they do not have enough

money to pay the farmers. In the middle of

2014, mills owed $1.8 billion to farmers

for cane they had taken but not paid for.

Farmers, naturally, have decided not to

plant sugar for the following season

potentially

leading

to

disastrous

ramifications

for

future

sugar

harvests. Sugar mills in UP have

also stated that there businesses

have become non viable as a result of

the extra tariffs imposed and hence will

suspend cane-crushing when the next

season starts.

Studies on food security in UP in

the past have tended to focus on policy

and how it affects food production. One

of the core findings of these studies is

that food availability and food stability

are interdependent. One of the startling

conclusions facing UP is that food

availability is reducing primarily due to the

switching of cereal crop cultivation into

commercial crops, such as sugar.

Food stability may be reduced due

to changing land use patterns associated

with industrialisation, commercialisation,

technological innovation and globalisation

as farmers tend to cultivate cash crops to

put food on their own table. The large-

scale cultivation of cash crops severely

hampers the production of food grains

and subsequently the availability of food

grains is gradually reduced. This cycle,

however, may not be in the best interests

of the state of UP as food accessibility is

largely dependent on the purchasing power

of common people and differs from food

availability and stability.

Forging a food policy that is in the best

interests of the common people and families

in UP remains an elusive goal, but one that

both the state and central Governments

need to get right in order to protect the

overall prosperity and wellbeing of its

citizens. As a party and Government that

is pro-farmer Yadav as the Chief Minister,

through his Government’s initiatives,

remains the best hope.

TAPPING

the unlimited potential of Uttar Pradesh (UP)

has been a priority of Chief Minister (CM) Akhilesh

Yadav’s Government since the tech-savvy leader took over

the reigns in 2012. One area that has been a thorn in the

progressive leaders side has been ‘power’ and not political

power but electricity and the manner in which to best

quench the thirst of this power hungry state.

For years UP has been lambasted for its grim power

scenario, as there is a perpetual shortfall of about 2,000 to

3,000 megawatt (MW) while the demand crosses 15,000

MW, one of the highest in the country. In addition the

alleged ‘power theft’ and a lack of alternatives, like solar

energy, has resulted in UP’s naysayers crowing louder than

a collective of howling banshees

As the nation develops and grows so does its demand

for electricity, something that is endemic across all of the

Indian’s states. In the last two decades alone, UP has seen

just five new units of thermal power being built while the

demand has grown tenfold. According to Government

sources there is an increase of 12 to 14 per cent in demand

every year, which equates to an increment of 23,000

MW within the next five years, while only 4,000 MW is

expected to augment the supply.

But now it seems that UP is answering its naysayers

not with public relations propaganda but with its actions.

The state Government has made environmentally friendly

power generation a centrepiece of its power policy effort and

has invited both the private sector in India and international

private enterprise to assist in its goal of increasing power

generation within the state. In early December Yadav

announced that his Government had procured around $3.5

billion of investment from the state, private sector and

joint venture initiatives for power generation, transmission

and distribution projects. All of which is to flow into the

beleaguered energy sector by 2016/17.

But it isn’t just securing investment funds where

Yadav has been concentrating his efforts. As it appears

UP’s three-decade-long wait for addition to its power

generation capacity is expected to come to an end in 2015.

According to Sanjay Agrawal, Principal Secretary of UP’s

power department, the state began generating nearly 4,000

MW of additional power mainly through six units of its

three under-construction thermal power plants and through

minor contribution from six other solar power plants. All

these power plants are nearing completion resulting in

additional capacity amounts to nearly half of the power

currently generated by the state.

“2015 is going to shed a major electricity burden of

the state with our three units of about 4,000 MW nearing

completion. While one unit of Anpara-D would be

completed by March, we are expecting other units of

Anpara, Bara and Lalitpur power plant to get completed by

September and October,” said Agrawal.

The CM, Akhilesh Yadav, has personally overseen

the project, and has been holding monthly reviews with

representatives of the companies that have undertaken the

construction work.

The solar route

As a keen environmentalist the CM is eager to set a new

standard for green power generation within the state. In

2013 UP’s New and Renewable Energy Development

Authority (UPNEDA) finalised a total of seven pre-

purchase agreements (PPA) with a collective of private

power companies and one public firm, to set up solar power

plants totalling 130 MW capacity. The private companies

include: Jakson Power Solutions, Moser Bayer Clean

Energy Ltd, Sree Developers, DK Infracon, Refex Energy,

Azure Surya Ltd and Essel Infraprojects.

One of the latest chess pieces to be played in the solar

power game saw NTPC (India’s largest national power

company) in November 2014 announce that it would build

a 375 MW solar power park in the Jalon district of UP in

conjunction with the Uttar Pradesh New and Renewable

Energy Development Agency (UPNEDA) and the Solar

Energy Corporation of India (SECI) at an estimated cost of

$50 billion. The UP Government will hand over about 750

hectares in Jalon to NTPC, the implementing agency, to

develop the solar park in phases during which time NTPC

will pay the Government a nominal rent on the leased land.

Solar energy is set to play a key role in the future of

the state. Regions such as Bundelkhand have the capacity

to generate solar power. Keeping in view the maximum

sunlight this area receives makes Budelkhand city prime for

future investment. Roof-mounted solar power generation

is also starting to become big news in the region and

off-grid solar power as a strategy of rural electrification is

also gaining in popularity. In all, the sun is shining brightly

on UP and its solar-powered sector.

Food, glorious food

Uttar Pradesh could easily assume the role of food basket for the whole of India. Fertile lands,

availability of irrigation, and a workforce that is plentiful, have contributed to UP being one

of the major contributors to the national food grain stock and thus the social and economic

fabric of India. But there are hidden challenges.

Paul McNamara reports

A ‘power’ point for UP

The biggest single issue facing the

Uttar Pradesh state as it embarks on a

comprehensive development drive is

power. To unlock the full potential of the

state electricity and its supply hold the

key.

Kathryn Freeman reports

UP Industrial Expressway

Development Authority’s CEO,

Navneet Sehgal

The Yadav

Government, a

pro-farmer party,

realises that both

food and farming

are highly sensitive

political.

STATE OF INFRASTRUCTURE:

POWER

The state has an installed capacity of 14,832.92

MW, as of November 2014 (includes allocated

shares in joint and central sector utilities). This

includes 5,472.20 MW under state utilities,

5,295.64 MW under central utilities and

4,065.08 MW under the private sector. Of the

total installed capacity in Uttar Pradesh, the

contributions from various sources include:

• Thermal power – 78.5 per cent

• Hydro power – 13.6 per cent

• Renewable energy sources – 5.6 per cent

• Nuclear power – 2.3 per cent

Source: Central Electricity Authority