INDIAN STATE : KARNATAKA

Economic Infrastructure

Roads

Road network in Karnataka:

National Highways: 3728 Km
State Highways: 9829 Km
Major District Roads: 28247 Km
Other District Roads: 1634 Km
Village and Other Roads: 88154 Km

Power

Karnataka Power Corporation (KPCL), a public sector company, owned by Government of Karnataka is engaged in construction, operation and maintenance of generation stations in Karnataka. It is presently providing more than 70% of the needs of the State. It has built up expertise in the construction and operation of both hydro and thermal stations.

Generation:

The state owned generating company M/S KPCL and central sector establishments M/S NTPC/ NLC have already drawn up plans for establishing new generating units to meet the power requirements in the state. With the liberalization and opening up the power sector for private sector participation through policy initiatives by the Government of India and Government of Karnataka, the IPPs have also come up with proposals for establishing new generating plants in the state, to meet the state's additional capacity requirement.

Transmission and Distribution network:

The Karnataka Power Transmission Company Limited (KPTCL) has assessed that present transmission network is sufficient to handle the peak load of about 3500 MWs only. KPTCL has already prepared a 10 -year perspective Transmission plan up to the year 2009-10 with a total capital investment of about Rs. 8500 crores to meet the projected evacuation as well as system improvement requirements. KPTCL has also estimated that approximately an amount of Rs 3000 crores is required for improving the present distribution network, and an additional amount of Rs 2000 crores for distribution expansion during next ten years. Thus the total capital investment of Rs 13500 crores is required for improvement of transmission and distribution system during next ten years, to develop a sustainable T&D network to achieve the objectives of providing reliable and quality power supply and to reduce the system losses to accepted levels of less than 15%.

The additional requirement of power and energy is proposed to be met through several sources and measures. The first and the foremost measure to be taken is through reduction of losses from 26% to 14%. If the system improvement work is carried out carefully the benefit cost ratio will be quite high. It also helps avoid installation of additional capacity and thus mitigate the pollution effects. The proposed investment of Rs 13500 crores for strengthening the transmission system is not only to reduce losses, but also to handle additional loads. A detailed exercise on system improvement works has to be carried out to maximize benefit cost ratio.

Government of Karnataka encourages electricity production from alternate and renewable sources of energy. These include microhydel, wind power, Biomass and cogeneration in Sugar plants.

Aviation

Karnataka has five functional airports at Hubli, Mysore, Belgaum, Mangalore and Bangalore.

Further, in order to keep pace with the rapid development of Bangalore as India's leader in information technology, biotechnology and the services industry, the Government of Karnataka and the Airports Authority of India initiated a greenfield project -Bangalore International Airport Limited (BIAL) is a Public Limited company under the Indian Companies Act, formed to build, own and operate the largest greenfield private sector owned and operated airport in India - the Bangalore International Airport. The new Bangalore International Airport is estimated to open for commercial operations in April 2008. Private promoters hold a 74 percent stake in BIAL while the government holds the remaining 26 percent. The shareholding structure of BIAL is as follows:

• Siemens Project Ventures, Germany: 40 percent
  
• Unique (Flughafen Zurich AG)-Zurich Airport, Switzerland: 17 percent
  
• Larsen and Toubro, India: 17 percent
  
• Airports Authority of India: 13 percent
  
• KSIIDC, Government of Karnataka: 13 percent

Bangalore Metro

The Bangalore Metro has all the components required for a successful integrated public transport system. It offers:

• Comprehensive connectivity
  
• Convenience
  
• Comfort
  
• Affordability
  
• Frequency
  
• Reliability
  
• Safety
  
• Aesthetics

The first phase of Bangalore Metro envisages a 33 Km elevated and underground rail network with 32 stations. The East-West corridor will be 18.10 km. long, starting from Byappanahalli and terminating at Mysore Road terminal, going via Old Madras Road, Indiranagar, C.M.H. Road, Ulsoor, Trinity Circle, M.G. Road, Cricket Stadium, Vidhana Soudha, Central College, Majestic, City Railway Station, Magadi Road, Hosahalli, Vijayanagar and Deepanjali Nagar.The 14.90 km. North-South corridor will begin at Yeshwantpur Terminal and terminate at R.V. Road terminal going via Mahalakshmi, Rajajinagar, Kuvempu Road, Malleswaram, Swastik, Majestic, Chikpet, City Market, K.R. Road, Lalbagh, South End Circle and Jayanagar. Out of the 33 km., 6.76 km. will be underground near City Railway Station, Vidhana Soudha, Majestic and City Market and most of the rest will be elevated.

The project is budgeted at more than 54.5 billion rupees (about US$ 1.2 billion) and is envisioned to be completed by 2011.

Special Economic Zones (SEZs)

Special Economic Zones (SEZs) are specifically delineated duty free enclaves primarily to promote trade, deemed to be foreign territory for the purposes of trade operations, duties and tariffs. The scope for participation is broad based which allows any private /public / joint sector / FDI / State Government departments to establish SEZs.

Constantly on the path to making the ambience more conducive for investments and trade, Karnataka has been proactive in spearheading initiatives on the SEZ front.

The Government of Karnataka has been instrumental in driving growth through:

• Sector specific SEZ for Pharmaceuticals &
  
• Biotechnology at Hassan
  
• Sector specific SEZ for Food Processing and Agro-based industries at Hassan
  
• Sector specific textile SEZ at Hassan
  
• IT SEZ at Mangalore
  
• Coastal SEZ at Mangalore

The proactive steps taken by the Government has resulted in encouraging the establishment of SEZs for specific sectors like IT & ITES, Hardware, Apparel, Petrochemicals, etc, through both public / private initiatives, opening up growth corridors across various locations like Bangalore, Mysore, Mangalore and Hassan.

Institutional Framework For Industrial Promotion

Karnataka government has set up Karnataka State Financial Corporation [KSFC]

KSFC provides term loans to new and existing units up to 300 lakh in case of proprietary, partnership and joint Hindu family concerns and up to Rs. 500 lakh for corporate bodies and registered cooperative societies. KSFC has a number of tailor made schemes, suitable to different kinds of entrepreneurs and projects. KSFC has fully decentralised its operations and the corporation has 7 Zonal offices, 23 'A' grade branch offices, 16 B grade branch offices and 2 field offices spread throughout the State.

Karnataka State Industrial Investment and Development Corporation [KSIIDC]

KSIIDC extends finance to the bigger projects soley or jointly with KSFC, commercial banks or any other financial institutions. KSIIDC also participate in joint stock companies by way of equity contribution. The corporation has a wide network throughout the State with ----- zonal offices and ----- branch offices.

Further, national level financial institutions like Small Industries Development Bank of India [SIDBI], Industrial Development Bank of India [IDBI], Commercial Banks are extending required financial/ loan assistance to the investors.