Cluster DevelopmentHowrah Foundry Cluster
The Industrial Infrastructure Upgradation Scheme (IIUS) promoted by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry (MoCI) aims at providing strategic interventions for improving the infrastructure of industrial clusters in order to enhance their international competitiveness
Under IIUS, the GoI provides up to 75% of the project cost (subject to a ceiling of Rs. 50 crores) for creation of infrastructure assets in approved clusters. The infrastructure components may include Physical Infrastructure, Common Facilities Centre, Infrastructure related to Information and Communication Technology (ICT), Research and Development (R&D), Information Dispersal/International Marketing, Quality Certification and Benchmarking etc
To avail funding, each cluster is required to form a Special Purpose Vehicle (SPV), which is to be a separate legal entity set up under the Companies/Societies Act. The balance 25% of the cost is to be met from other sources, with 10% envisaged to come from banks/financial institutions and industrial units located in the cluster providing a minimum of 15%
The Howrah Foundry Cluster is an agglomeration of industries in the city of Howrah. Due to congestion and inadequate capacity for expansion, a new 'Foundry Park' is proposed with an annual capacity of more than 1 million tonnes. The proposed Park is 5 Km from the National Highway No. 6, and is very close to the existing Foundry cluster
Abundant raw material and cheap and skilled manpower further strengthens the case of the cluster. Moreover, 36% of the country’s installed capacity (foundry units) comes from West Bengal. There are about 280 units in the Howrah Foundry cluster which has a turnover of more than Rs 1500 crores and exports of more than Rs 600 crores. Indian Foundry Association (IFA) is the apex body of Foundry associations in the state of West Bengal and is interested in developing the Howrah Foundry cluster with assistance from IIUS
IL&FS Infrastructure Development Corporation Limited (IIDC) was approached by the IFA to appraise the diagnostic study of the Cluster prepared by Consulting Engineering Services (CES) and to provide a loan to the Project. IFA has retained IIDC to assist IFA in project development and preparation of cluster proposal to obtain sanction from DIPP under the IIUS as well as project implementation and project management. The diagnostic study undertaken by CES has identified critical infrastructure Projects, which could be structured in such a way that the grant funds available through the IIUS scheme could be leveraged to attract the balance capital required to complete these projects
The project benefits inlude:
- Investments to the tune of Rs. 2500 crores with creation of direct employment for 30,000 people and indirect employment for ~ 100,000 people.
- Boost to the Economy of West Bengal, especially in the metallurgical sector.
- Socio-economic upliftment of the region.
- Long pending modernization program of Howrah foundry cluster will be realized.
- Opportunity to set up foundries of international standards to attract foreign direct investment.
- Attract User Industries like Automobiles, pumps, OEMs, Railway units, Electrical appliances etc.
Currently Phase 1 of 270 acres is at an advanced state of completion. Investments of approximately Rs.45 crores have already been made in creation of common infrastructure and facilities, in addition to investment in land and its development amounting to Rs. 35 crores. More than 50 foundry units have been allotted requisite land. The land allotment to members is on a cost to cost basis as IFA is a non-profit organisation. Plot sizes vary from 1 bigha (0.33 acres) to 10 acres
IIDC acts as the Project Developer on behalf of Industrial Associations in clusters, which are seeking financial assistance under the IIUS. The role of IIDC is spilt into two phases. Phase 1 comprising of preparing the proposal for seeking financial assistance under IIUS and obtaining the sanction from the MoCI for the projects. Phase 2 includes project development, procurement of contractors/operators for implementation of project and project management. The project has been sanctioned by the Ministry (Phase 1 completed) and IIDC is carrying out Phase 2 works