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Infrastructure development in india

1. “ Expanding investment in infrastructure canplay an important counter cyclical
role.Projects and programmes [are] to be reviewedin the area of infrastructure
development,including pure public private partnerships, toensure that their
implementation is expeditedand does not suffer from [the] fund crunch.” Mr.
Manmohan Singh, Indian Prime Minister,
2. Definition The Rangarajan Commission indicated six characteristics of
infrastructure sectors,2. Natural monopoly3. High-sunk costs4. Non-tradability of
output5. Non-rivalness (up to congestion limits) in consumption6. Possibility of
price Exclusion6. Bestowing externalities on society.
3. Risk Sharing Affordable prices through greater competition Provision of
efficient services Improved maintenance and management of assets
Development of assets of world class standards Budgetary constraints
Maximizing investmentGovernment is committed to PPP mode- Why?
4. Country Program DescriptionBrazil Growth This strategic investment program
oversees and Acceleration approves initiatives and public Program works
investment. PAC, the first phase of the program launched in 2007, invested $349
billion in areas, includingCHINA 12th Five-Year energy, urban began in 2011, is
allocating some $1 The 12th Five-Year Plan, which infrastructure, sanitation,
spending over five years. The program is trillion in infrastructure and
transportation. Plan PAC-2byis Central Committee with help from the Ministry of
developed the a $900 billion extension of the PAC of the investment will Housing
and Urban-Rural Development. Much program for 2011–2014. with a secondary
emphasis on go toward building high-speed rail, water supply, electricity, and
highwaysINDIA 11th and 12th The 11th Five-Year Plan, which began in 2007, is
developed and implemented by India’s Planning Commission. Of the plan’s FiveYear Plans estimated $500 billion in total infrastructure investment, one-third will
flow to roads, including a project to upgrade, rehabilitate, and widen major
highways in India. The rest will be spent on transit, water, electricity, and other
infrastructure sectors. The country’s 12th Five-Year Plan, which runs from 2012 to
2017, will double the amount spent on infrastructure to $1 trillion.
6. Budget 2012-Infrastructure Sector gets major boost
7. Size – Power Sector•Generation capacity of 122 GW; 590 billion unitsproduced
(1 unit = 1kwh)-CAGR of 4.6% over the last four years.•India has the fifth largest
electricity generationcapacity in the world-Low per capita consumption at 606
units; less thanhalf of China•Coal-fired plants constitute 57% of the
installedgeneration capacity, followed by 25% from hydelpower, 10% gas based,
3% from nuclear energy and5% from renewable sources
8. Structure of power sector •Majority of Generation, Transmission and
Distribution capacities are with either public sector companies or with State

500 km of National Highways under NHDPV.Power sector•100% FDI permitted in Generation. up-rating and life extension of old thermal andhydro power plants•Total investment opportunity of about US$ 200 billion over a seven yearhorizon 13. • Total length is 33 lakh kms • Carry 65% of fright & 80% passengers •National highway constitute only 1. in the world.000 MW is untapped as assessed by theGovernment of IndiaRenovation.Many large generation projects have been planned in the private sector 9.Distribution circles to be privatised-Tariff reforms by regulatory authorities•Opportunities in Generation for:.Electricity Boards (SEBs).)• Important Development projects -The Golden Quadrilateral (GQ-5846 kms of 4 lane highway) .Natural Gas/CNG based turbines at load centres or near gas terminals. 10.Four-laning of 12. Each State has its own ElectricityRegulatory Commission.Unbundling of vertically integrated SEBs.000 MW of hydel power is yet to be tapped in India •India requires an additional 100.CESC 1005 Yes yes YesReliance Energy 885 yes yes Yes International Private SectorChina Light and 655 Yes No NoPower (CLP)Marubeni 330 yes No NoCorporation •G . Policy.Coal based plants at pithead or coastal locations (imported coal).109 km under NHDP-III -Program for 6-laning of 6. •Private sector participation is increasing especially in Generation and Distribution . 15.Distribution 11. Transmission &Distribution .) Investment plan . ROADWAYS (cont. Opportunity •Over 150.Generation •T .North-South & East-West Corridor (NSEW-7142 kms of 4 lane highways) .Distribution licences for several cities are already with the private sector .the Government is keen to draw privateinvestment into the sector•Policy framework in place: Electricity Act 2003 andNational Electricity Policy 2005•Incentives: Income tax holiday for a block of 10 yearsin the first 15 years of operation.7% of roads but carries about 40% of traffic •Annual projected growth is 12-15% for passenger traffic & 15-18% for cargo traffic 14.749 Yes No NoNational Hydro Yes No NoElectric Power 3615CorporationNPC Yes NO No 2770 Domestic Private sectorTata Power 2203 yes yes YesRPG Group .000 MW of generation capacity by 2012 12.Hydel power potential of 150.Transmission •D . modernisation. KeY Players-Power SectorMajor Players Capacity G T D Public sectorNTPC 23. waiver of capitalgoods import duties on mega power projects (above1. ROADWAYS • India has second largest Road network.“Open Access” to transmission and distribution network. Potential•Large demand-supply gap: All India average energy shortfall of 7% andpeak demand shortfall of 12%•The implementation of key reforms is likely to foster growth in all segments:.000 MW generation capacity)•Independent Regulators: Central ElectricityRegulatory Commission for Central PSUs and inter-State issues. Roadways (cont.

• Petrol 388000 b/d.• Overall Tele.• FDI worth US$ 3. 332. 57630 cr the year 2011-12 for the development. Road Ahead• Mr S Jaipal Reddy. Railways• In 1947 rail network of about 53000 km• Added only 11000 km of network in last 65 years• Modifications like.44 million b/d.• Mobile subscriber base-936. Developments & Investments• KG Basin-Reserves of 56.5 millions of workforce 17.57%• Broadband Subscriber 13. DMIC project• Mega infrastructure project of USD 90 billion• To connect Delhi & Mumbai through road and railway network of 1483 km• Delhi.3 mega petrochemical Project• IOCL to set up refinery in Gujarat• ONGC & IOCL seeking refinery options in Srilanka• Petronet LNG Ltd planning to set up its third terminal in the east coast of India.. the development plan will also cut Indias import bill. India. Hindustan Petroleum Corporations grass-root refinery in Visakhapatnam. Haryana.• The Indian handset market is led by Nokia with 37. Market Dynamics Production Consumption• Crude oil 31.16. 24. expects investments worth US$ 75 billion in South Asian nations oil and gas sector from April 2012 to March 2017• Eventually. Government Initiatives• Indian Government has encouraged Saudi Arabia to get involved in the countrys petroleum upstream and downstream sector• OPaLs Petrochemical project at Dahej.42 million 27. 25. Gujarat.2 per cent market .04 million barrels per day• Gas 50 BCM 23.12 million.7 billion barrels of proven oil reserves. 26.6 BCM. MISSION 2020 OF INDIAN RAILWAYS• High speed rail travel• Raising the speed of regular passenger trains from 100-130 khph to 160-200 kmph• To develop 50 world class stations which can be recognized internationally• Segregating passenger and freight tracks completely 20.-Gauge changing -Electrification -Computerization -Double tracks 18. U. Rajasthan. Junior Oil Minister. OMPLs Petrochemical project at Mangalore. IOCs LNG project at Ennore. Railways • About 64000 km of rail network • Connects 7083 stations • Carry 2. 21. from April-Jan 12. Market Dynamics• The Indian handset market made a volume sale of 182 million. Bharat Petroleum Corporations LNG terminal at Kochi.• Natural Gas 40157 • Gas 58 BCM MCM• 1. Telecommunication• 3rd largest in the world & 2nd largest in Asia. Investment Plan• Investment of Rs.P.87 MMT • Diesel 1.• Reliance Industries J. Maharashtra this states will be connected to form a corridor of international standard.50 million tones of goods everyday • About 1. Oil & Gas• India 5th largest Consumer of energy• About 5.78 million during April 2000 to December 2011 22. highest ever by Indian railways in any financial year -Target of laying 1075 km of new lines in 2012 -800 km of gauge conversion -700 km of Doubling of lines 19.20 crore passengers & 2.density 77.

• Greenfield airport projects are planned in resort destinations and emerging metros •Further. Initiative• Complaint centre by TRAI• Hybrid power• Easier & standardized municipal laws for Towers• Subsidy for Solar panels & use of nonconventional resource of energy. INVESTMENT BY AAI XI Plan (2007-12)– Planned Investment $10 billion . • Traffic is estimated to reach 877 million tonnes by 2011-12.5% (CAGR) over the next 7 years.• Increased trend of sharing infrastructure. 7. • India’s existing ports infrastructure is not sufficient to handle the increased loads – cargo unloading at many ports is currently inadequate.9 per cent).• Awarded A1+ by ICRA for Short‐term Loan/Commercial Papers 32. 33. and containerised cargo is expected to grow at 15.• Estimates made in 2007 by the Indian Government’s Committee on Infrastructure suggest that passenger traffic will grow at a CAGR of over 15% in the next 5 years 30. GFive (7. 28. although this slowed in 2007. followed by Samsung (14.517 km long Indian coastline plays a pivotal role in the maritime transport helping in the international trade • Increasing connectivity with inland transport networks is challenges currently facing India’s ports • which have seen massive swells in the amount of goods transported.– To achieve efficiency by improving Air Traffic FlowManagement.share.– Financing• Mainly through Internal Resources• Relatively small portion through BudgetarySupport• Balance through Borrowings.– To meet the increased demand by enhancementof Aircraft/Cargo handling capacity. 29.• Exploring Loan from JBIC/World Bank. •The total investment on new airports has been proposed at about $10 billion by 2012.8 per cent).– To provide WorldClass infrastructure facilities. AIRPORT DEVELOPMENT PLAN (During the XI Plan Period 2007-12)• Main Objectives– To boost Infrastructure in Aviation sector.• The National Maritime Development Programme . STEPS TAKEN BY GOVERNMENT FOR DEVELOPING PORTS• An estimated investment of around $22 billion is targeted for port projects in the five year period from 2007-12. NEED OF DEVELOPMENT OF PORTS • With 12 major ports and 187 minor ports. STEPS TAKEN BY GOVERNMENT FOR DEVELOPING AIRPORTS •The Airports Authority of India (AAI) manages and operates 126 airports and 329 airstrips •The Government established the Airport Economic Regulatory Authority (AERA) •State governments are also getting involved and looking to facilitate the development of new airports. even where ports have already been modernised 34. Key developments & Gov.5 per cent) and Micromax (5.• A number of Indian airlines have faced challenging market conditions in 2008• Indians are still flying in much greater numbers.– Credit Rating• Awarded AAA stable by CRISIL and L AAA byICRA for AAI Bonds. 35 non-metro airports are proposed for development.• Issue of Bonds in Domestic Market. 31.– To provide safe Air Traffic Services. NEED FOR INFRASTUCTURE DEVELOPMENT IN AIRPORTS• Air traffic has increased rapidly in recent years.

Steps taken for infrastructural development• IIFC . Would be able to borrow at low rates as they are guaranteed by GoI.India Infrastructure Finance Corporation2.• Government has started the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) to improve Urban infrastructure Conclusion• Infrastructure inadequacies in both rural and urban areas are a major factor constraining Indias growth. 35. with private investment targeted at around $8 billion.• The government is focusing on this and has created a set of programs and reforms aimed at addressing this issue.• Port capacity will be increased from 520MT to 800MT• 60000 MW of new power is to be added by 2012 37. and an independent tariff regulatory authority has been set up to facilitate projects at major ports. Steps taken in the 11th 5.• Recent deregulation of the sector now permits 100% FDI. India needs a lot more infrastructure to meet its needs. Will lend money at low rates to public and private infrastructure projects4.• Projects related to port Development will provide a major opportunities for E&C companies. .6% of GDP)• One Half of all new investments in the 11th plan will be in infrastructure• The planning Commission has estimated that a total investment of $450 Billion in infrastructure is required over the next 5 years to meet India’s infrastructure needs. with a required investment of about $15 billion over the next ten years.000 MW of new power needed by 2012• Sanitation Coverage is only 35% currently 36.year plan 2007-2012Actions taken in the 11th 5 year plan – 2007-2012:• The amount of money spent on infrastructure will be raised to 8% of GDP (earlier. Infrastructural requirement scenario in India• Urban population is expected to grow about 50% by 2025• Growth in GDP is predicted to be 8-9% per annum• Road Traffic growth will be 15% per year• Air traffic is growing by 25% per year• 101.includes 276 projects.3. infrastructure spending was only 4. Setup to fund infrastructure funds in India & is owned by government.