​BUSINESS STRATEGY

​ASSIGNMENT-2

Case Study: Business Portfolio Planning at

​Roland Construction Company Limited

Submitted to: Prof. Anupam Bawa

​Submitted by: Anu(06)
Nikita Bamel(18)
​Pooja Miglani(22)
Course: M.com(Honours)
University Business School,
Panjab University, Chandigarh
CONTENTS
● Case Report
● Analysis of Tables
● Questions & Answers
● References

GROUP ASSIGNMENT DECLARATION

We declare that this assignment is an original work submitted by the following group members
who have all actively made an equal contribution. Any other work of similar nature has been
appropriately referenced in this assignment.

Group no​: 4
Group Members & Roll no’s:
Anu(06)

Nikita Bamel(18)

Pooja Miglani(22)
Case Study Allotted​: Business Portfolio Planning at Roland Construction Company Limited
Date of Submission:​ 25th October, 2020
CASE REPORT
This case gives insights about the construction business of India in different sectors of
infrastructure such as Transport, power, port, airport development etc because construction
activity majorly contributes to economic growth of the country. The case is about business
portfolio planning of Roland construction company limited and gives insights of the business
environment of five verticals (Roads, Port, Airport, Railway, Power) of construction business.
Roland construction company is a public limited company which has been in existence since the
last 78 years with good track records of profits and strong financial position. It has executed its
projects under EPC and PPP model.
It works on four verticals and each vertical contributes in its revenue generation:
Verticals. Revenue contribution
Road-30%
Railway-38
Power-30%
Industrial construction-2%
RCCL has a large equipment base as well as international tie-ups for its construction activities
and ability to use its resources and technology efficiently to enhance profitability and
productivity. CMD of RCCL has given the task of revisiting the business portfolio to the
corporate planning team who is thinking to revisit the railways vertical as well as close down its
industrial construction because of the weak performance of these verticals. They are looking at
entering into seaport or airport construction by taking advice of the firms who have expertise in
the construction of ports and airports.
Business environmental appraisal
However, various sectors of infrastructure are facing many challenges such as shortage of labour,
obtaining land and environmental clearances, competition, inflation, non availability of finance
etc. which are also affecting the GDP growth of the economy and the central government is also
working upon the challenges by making various reforms.
Roads
The largest road networks of India divided into National highways, State highways, district roads
and villages which are being controlled by government agencies are achieving the road visions
2021 prepared by Department of Road Transport and Highways. The challenges in road
construction lead to the delay in projects under construction and slower toll collection but efforts
have been made by the government to improve the situation of contracting firms. Road contracts
have shorter gestation periods and can be constructed in a segmental fashion and revenue can be
generated through toll collection.
Ports
India's port traffic has been growing since last few years but Indian ports charge high tariffs to
the shippers. Government is trying to solve the issues related to environmental clearances,
financing etc. The new tariff regime is introduced to attract investors in port development. Port
projects involve a longer gestation period and revenue can be generated after completion of the
projects.
Airport
The ninth largest Indian aviation market operational under the PPP model is growing
tremendously. Target of 51 airports in small cities and different states was set in june 2013 by
the Prime minister of India. The GOI has allowed for consortiums to bid and execute projects.
Airport construction sector involves a huge cost of air operations but competition between
contractors is less as compared to competition between road contractors.
Railway
The fourth largest network of the world is Indian railways which is yet inadequate where speed
of progress is too low and involves various challenges. Routes passing through forests and
wildlife sanctuaries don't get environmental clearances easily. An initiative of forming a special
purpose vehicle was taken by Gujarat to develop a rail network to connect industrial hubs with
important railway stations which leads to cost effective transportation as well as faster and
smoother movement of goods.
Power
Indian government has taken several steps to promote investments in the power sector. High
capacity addition of about 19000 MW of power was seen in FY-2011-12 still there is a large
demand supply gap. Power project construction in India was slow because of shortage and lower
pricing of coal which was based on heat value. India shifted to gross calorific value pricing as
per global standards which lead to increase in prices and power generation. However, some
projects are stuck due to lack of fuel-supply arrangements or environmental clearances which are
being taken in front of the concerned ministries to commit efforts in order to put the power sector
on track.
Corporate planning team of RLL has to revisit its business portfolio by appraising the business
environment of each vertical and make appropriate recommendations to the chief managing
director of RCCL.

ANALYSIS OF TABLES
Table 1 & 2: Size of construction
Table 1 indicates the share of construction activities in various infrastructural projects which was
taken from the annual report 2012-13 of Hindustan construction company limited It was
analysed that construction activity majorly contributes to the Railways and Airport which is 78%
and 70% respectively. Contribution of construction in Roads and Ports is 63% and 65%
respectively. The least contribution of construction is made in Power i.e. 38%.
The data of Table 2 was taken from the Annual report 2012 of ITD Cementation Limited. It
gives insights of the tentative investments in various infrastructural sectors. The largest amount
of 13.5 trillions was invested in Power and the least investment was made in Airports.
Investments of 9.69 trillions, 5.19 trillions, 1.97 trillions were made in Roads, Railways and
Ports respectively.
The construction activity in India is the major contributor to the economic growth of the country.
with a multiplier effect of five which involves the potential of generating income that is five
times of one unit of expenditure in the sector. It is also the second largest employer of manpower
in the country. The substantial portion of the investment is formed through The 12th Five-Year
Plan (2012–17) which has a very ambitious target of investing about USD 1 trillion in
infrastructure and construction. About 50 per cent of the construction revenue comes from
infrastructure and the remaining 50 per cent comes from real estate that comprises residential,
commercial and industrial buildings.
The construction sector in India consists of about 120,000 standalone contractors, 25,000 small
(employees less than 200), 500 medium (200–500 employees) and 250 large sized contracting
firms (employees more than 500). The Indian construction company is very large and dominated
by large players who possess the expertise to execute several mega projects.
Compounded annual growth rate(CAGR)
CAGR = {(Ending value of investments/Beginning value of investments)^1/n}- 1

Table-4: Roads & Bridges (Row 1)

CAGR = {(1815.7/652.4)^1/9}- 1
= 12.04%
It indicates that the value of roads and bridges infrastructure has grown at the rate of 12.04%
compounded annually.
Table-5: Railways (Row 1)
CAGR = {732.2/280.5)^1/9}- 1
= 11.25%
It indicates that the value of railways infrastructure has grown at the rate of 11.25% compounded
annually.
Table-6: Airport (Row 1)
CAGR = {748.4/324.7)^1/9}- 1
= 9.72%
It indicates that the value of the airport's infrastructure has grown at the rate of 9.72%
compounded annually.
Table-7: Power (Row 2)
CAGR = {1650.2/4581.7)^1/9}- 1
= 12.02%
It indicates that the value of Power infrastructure has grown at the rate of 12.02% compounded
annually.

Findings

S. no Infrastructural sectors Share of Construction(%) CAGR(%)

1. Roads 63 12.04

2. Railways 78 11.25

3. Airport 70 9.72

4. Power 38 12.02

It was analysed that the share of construction activity in India was largest in railways followed
by Airport, Roads and Power. However, growth rate is higher in Roads and Power as compared
to railways and Airport. Therefore, the Business Portfolio Planning team of RCCL would take
decision of revisiting the business portfolio by keeping in consideration growth and investment
factor of each vertical as well as through appraisal of their business environment.
QUESTIONS & ANSWERS

Question 1: What are the strengths and weaknesses of Roland Construction Company
Limited (RCCL)? Why does it want to take a look at its portfolio?
Answer: ​The strengths and weaknesses of RCCL are following:

STRENGTHS
● EPC model & PPP model: Roland Construction Company, uses both the models, EPC
and PPP which helps the company for the development of infrastructure projects mainly
highways. Under these models, the cost is completely borne by the government by
inviting bids for engineering knowledge from private players. Costs related to raw
material and construction are met by the government.
● Expertise in planning and scheduling: RCCL uses expertise in planning and scheduling
to carefully plan projects and execute its plans. Timely Planning and scheduling enable
RCCL to avoid cost escalation and also establish its name.
● Training facility: RCCL strongly believes in adding skills to functional managers to
enhance productivity. It provides training to its managers to different institutes. Meeting
different institutes help managers to improve their skills and knowledge of the job and
build their confidence in their abilities. This will improve their performance and make
them work more efficiently and effectively.
● International tie-ups: RCCL has good relationships globally, which helps the company
in having the latest technology. The latest technology helps with productivity.
● Large Equipment base: As construction took a lot of time and expertise, the activities of
construction are outsourced to subcontractors. To carry the construction activities
effectively RCCL carries a large equipment base. To maintain the equipment a
specialized department is established.
● Skilled Manpower: RCCL hires its manpower carefully and also gives importance to its
retention. A proper process is followed by RCCL to hire the manpower. After hiring it
also focuses on the training needed for the manpower. It provides adequate training if
required, training is provided in the managerial as well as technical areas. RCCL has a
developed and stabilized system to evaluate the effectiveness of the training provided to
its personnel.
● Strong Financial Position: RCCL has a sound financial position; it negotiates well and
drives a hard bargain with all its subcontractors, vendors, and also with banks. RCCL has
enough funds that it can enter into new sectors.
WEAKNESSES
● Low growth: ​RCCL didn’t grow as much as it should have, so CMD wanted to revisit
the portfolio of the company. The organization's relative position in the industrial
construction sector was weak and did not encourage them much to continue that further,
 so the CMD decided to close down the industrial construction sector because there was
no growth from this sector.
● Low return on investments: ​RCCL has different verticals like airports, seas, railways,
power, and industrial construction which contributed different returns. Road and power
verticals contributed 30% of its revenue; railway constitutes 30% revenue whereas
industrial construction contributes just 2% of its revenue, which was less. They couldn’t
generate enough returns on their investments from this vertical.
● Reduction in efficiency: ​As the construction company was operating in different
verticals which has affected their efficiency of operating all these verticals, one of the
verticals i.e. industrial construction was not much successful. Low return on investment
and low growth in this sector lead to reduced efficiency of the company.

Why does RCCL want to take a look at its portfolio?

Although RCCL has achieved in their business verticals but despite these achievements, CMD
felt that they haven’t achieved as much as they should have because of the relatively weak
performance in one of its verticals which was industrial construction. RCCL was financially
strong, it had enough funds to enter into any new sector. CMD decided to revisit the portfolio
and task was handed over to the newly formed Corporate Planning Team consisting of three
members of RCCL and led by Deepak Joshi, an alumnus of a prestigious business school. They
decided to enter into the seaport and/or airport construction. They had expertise in construction,
operation, and maintenance of ports and airports to form a consortium for bidding for port and
airport sectors. CMD also felt the need to revisit the importance given to railways. They decided
to close down the company’s industrial construction business, as they have not grown enough
and the experience of doing business in this sector does not particularly encourage him to
continue doing industrial construction.

Question 2: For each of the following identify the opportunities and threats for RCCL. Also
enumerate the advantages and disadvantages of that sector compared to other verticals:
Roads, Ports, Airports, Railways, Power.
Answer: ​The opportunities and threats of RCCL are following:

OPPORTUNITIES
● Entry to new verticals: ​RCCL had the opportunity to enter into new business verticals
such as seaports and airports which have high scope of growth and expansion in future.
RCCL can revive its business operations through entering into new business verticals.
● Expansion of railways: ​As railways was contributing maximum in its revenue
generation i.e. 38% and CMD also decided to revisit the importance given to railways by
increasing its share in construction activity. This is the opportunity for RCCL to expand
its business.
THREATS
● Economic factors: The GDP growth has slowed to 5.0 percent, inflation is also beyond
control, interest rates are high, Indian currency is depreciating and liquidity is poor.
These situations have affected the business, the economic recession led to a change in
the attitude of the customers, where the company had to drop their prices.
● Political pressure: Political factors had affected the construction business because of
changing policies and actions of the prevailing government at every level. Increasing and
decreasing tax rates also affected the profitability of the business. Multiple political
parties create chaos among the business. Therefore, political stability is a must for an
economy as it directly disrupts the business operations and activities.
● Competition: Competition is the biggest threat to any business. RCCl had the threat of
its other competitors which are into construction business. Some of the major contracting
firms in construction business are Larsen and Toubro, Hindustan Construction Company,
GVK, GMR, Gammon India, Reliance, Infrastructure, Shapoorji Pallonji Company Ltd,
Simplex Infrastructure etc.

The advantages and disadvantages of each sector compared to other verticals are
following:

ROADS: Advantages
● Shorter gestation period: Road contracts have a shorter gestation period as compared to
ports and airports, roads are constructed faster as compared to constructing seaports and
airports which usually involves more time.
● Segmented construction: Roads can be constructed in segmental fashion, but seaports
and airports cannot be constructed in segments.
● Revenue generation: Roads can generate revenue by collecting tolls; toll collection is
immediately started after the road project starts. In road construction, the revenue can be
collected before the completion of the projects, whereas in the construction of the
seaports and airports revenue can be collected only after the completion of the project.
● Land acquisition: In the road project the land acquisition is easy as compared to seaports
and airport projects.
Disadvantages
● Possibility of Maoist attack​: In constructing roads there is a possibility of Maoist attacks
if these happen to be constructed in the routes going through deep forests.
● High Competition: There is more competition in road contractors as compared to other
verticals.
● Delay in construction: In the road project, the delay in construction sometimes occurs
due to delay in environmental clearance.
PORTS: Advantages
● High growth: Performance of India’s port traffic during the years 2002-08 has been
growing tremendously compared to a corresponding growth in world seaborne traffic.
● Land acquisition: The land acquisition problem is not as serious as in the case of rail or
road projects.
● No risk of terrorist attacks: Constructing ports does not carry a serious risk of terrorist
attacks as it is in the case of road projects that pass through thick forests.
● Less Competition: The competition between the contractors is less severe as compared
to competition between road contractors.
Disadvantages
● Capacity Constraint: Only 10 percent of the domestic cargo is carried by coastal
shipping. Reasons for this are regulatory, facilities, and finance; this all makes the coastal
shipping expensive and capacity constraints are always there because it can carry a small
volume at a point in time.
● Lack of long-term finance: Coastal vessels are expensive because of their big size, to
buy coastal vessels there is a lack of long-term financing; this is also a hindrance to the
growth of coastal shipping.
● Higher tariffs:​ The Indian ports charge higher tariffs to the shippers.
● Longer gestation period: Port projects involve a longer gestation period as compared to
the road projects.

AIRPORTS: Advantages
● Expansion: Airlines have the potential due to which the operation can be expanded in
India.
● High Returns:​ Airports generate more revenue as compared to other verticals.
Disadvantages
● High Investments: Construction of airports involves a huge amount of investments.
Various factors are responsible for constructing an airport, expansion, and modernization
of existing airports, improvements in connecting infrastructure, and better airspace
management. Constructing a big airport requires city-side facilities, airspace, terminal
building, and runway. It is difficult to get the above facilities together.
● Land acquisition: ​In smaller cities, the problem of land acquisition may not be grave as
in the case of big cities.
● Cost of Aviation Turbine Fuel (ATF): ​The cost of Aviation Turbine Fuel greatly
impacts the cost of air operations. Because of the high costs, the other modes of travel
such as rail and road are more attractive because of low prices as compared to airlines.

RAILWAYS: Advantages
● Faster and smoother movement of goods: With the help of the railway the raw
materials for the production in industries can be easily carried in bulk.
 ● Cost-effective utilization: ​With the help of railway bulk goods can be transferred from
one place to another at relatively low prices.
● Government initiatives: Indian Railways have planned to follow the PPP routes for all
its projects also other initiatives from states like Gujarat to form a Special Purpose
Vehicle (SPV) to develop a rail network to connect industrial hubs with important
railway stations due to which railways have been benefited.
Disadvantages
● Inadequate network: Indian railways are the fourth-largest railway network in the world
in terms of route kilometers, but the requirement of the economy and the size of the
country, the existing railway network has been inadequate.
● Slow progress: ​Railways is also suffering from a lot of problems; the construction of
railways tracks is such a long process that involves huge costs and much time. Due to
which the overall speed is slow.
● Land Acquisition: In the railway project, land acquisition is the toughest part in the
implementation of the projects.
● Time-consuming and tedious process​: Railway routes have to pass through forest and
wildlife sanctuaries; the clearance of forest may take much time, it is also a tedious
process.

POWER: Advantages
● Expansion: ​The government has taken several steps to promote investments in the power
sector. Many state-owned establishments and independent power producers have decided
to expand their existing facilities.
● Pricing: ​India has shifted to gross calorific value pricing which lead to increase in prices
as compared to the prices which were based on heat value earlier. Adopting the gross
calorific pricing helps in generating more revenue.
.​Disadvantages
● Slow process: The construction process in the power sector is slow due to many reasons,
shortage of coal. Coal is not easily available and also the prices of coal are high.
● Land acquisition: Land acquisition is also difficult in the power sector. In only some
sectors such as road construction, land acquisition is easy whereas for all other sectors it
is very difficult to acquire the land.
● Environmental clearance: Environmental clearance is also one of the biggest challenges
for this sector, clearing land involves huge time and cost. Due to delay in clearance. the
project generally gets stuck.
 
Question 3. Prepare the BCG matrix for RCCL. Explain your reasoning. Make explicit any
assumptions that you had to make while preparing the matrix. List the difficulties (if any)
faced by you in preparing the matrix.
Answer: ​The BCG Matrix is a well-known management model for analyzing the product
portfolio of companies . 'BCG' stands for Boston Consulting Group, a well-known consultancy
company which developed the BCG matrix in the 1970s.The BCG matrix method is based on the
product life cycle theory that can be used to determine what priorities should be given in the
product portfolio of a business unit. To ensure long-term value creation, a company should have
a portfolio of products that contains both high-growth products in need of cash inputs and
low-growth products that generate a lot of cash. It has 2 dimensions: market share and market
growth. The basic idea behind it is that the bigger the market share a product has or the faster the
product's market grows the better it is for the company.
The Matrix is divided into 4 quadrants based on an analysis of market growth and relative market
share:

BCG Matrix for RCCL

RCCL is divided into four verticals—Roads, Railways, Power and Industrial Construction.
Industrial Construction was the latest addition to its business portfolio in 2011. Road and power
verticals each contribute 30 percent of its revenue while railway constitutes 38 per cent and
industrial construction contributes just 2 per cent of its revenue. In terms of market share
(number of projects) in the four verticals, RCCL ranks second in the railway sector and third in
the road and power sectors. In case of industrial construction, it is at the fifth position. There are,
however, a few firms which have come into existence in the last twelve years which have a
revenue growth rate of more than 35 per cent annually.

Assumptions taken for preparing the BCG matrix of RCCL are following:
● High market share is the only success factor
● Market growth is the only indicator for attractiveness of market
● Market share gains have the potential to generate a cash surplus due to the effect of
economies of scale.
● The best opportunities to build a strong market position usually occur during a market’s
growth period.

BCG Matrix components of RCCL:

● Stars: RAILWAYS ​(high growth, high market share)
This vertical of RCCL uses large amounts of cash and is a leader in the business so it also
generates large amounts of cash. They are expected to become cash cows when the
market growth starts to decline and they have kept a high market share. Railway is
generating more ROI than other product categories.
● Cash Cows: ROAD & POWER​ (low growth, high market share)
Road & Power verticals of RCCL are generating high growth margins. It has low growth
with relatively larger market share and RCCL should link the cash cow as much as it can
as they generate regular income. Cash cows don't cost much and there is less competitive
pressure. These should be milked for cash to reinvest in ‘stars’ with high growth and high
market share, i.e. Railways
● Dogs: INDUSTRIAL CONSTRUCTION ​(low growth, low market share)
Industrial construction of RCCL has a weak market share in a low growth market because
of which it is not making profits. Therefore, construction in this vertical should be closed
and the investment currently being spent on this vertical could be spent on making
something that would be more profitable.
● Question Marks​ (high growth, low market share)
These are the construction projects in new markets or a different type of work than the
company has been doing which shows potential because they are growing rapidly. They
could consume a lot of cash while the organisation is putting the processes in place to
manage these projects. A question mark could prove itself and become a star, and
eventually a cash cow. If the question mark does not prove profitable within 90 - 180
days, it may be wise to re-evaluate those projects. Industrial construction was the new
addition in the business portfolio of RCCL in 2011 which couldn’t perform well and
came out to be the ‘Dog’ later.

Difficulties faced in preparing BCG Matrix

● Case didn’t support enough evidence to find out the ‘Question mark’ category.
 ● The BCG matrix model would have been developed more effectively if the market could
be defined properly.

Question 4. What are your recommendations to RCCL?

Answer: The Roland Construction Company Limited (RCCL) is a company listed on the
Bombay Stock Exchange and also on the National Stock Exchange. The four verticals of RCCL
are Roads, Railways, Power and Industrial Development. RCCL is an organisation known for its
ability to carry out projects as well as for financial prudence.
Here are some recommendations for RCCL case-
● The RCCL is not expanded as much as it should be and the portfolio of RCCL needs to
have a relook.
● As mentioned, the importance given to the railway sector needs to be revisited and should
be increased as it is a ‘Star’ Vertical and generates more ROI than other products.
● There is a delayed decision making process because of various political parties and
democratic governance sectors; it needs to be boosted up.
● Industrial construction is a ‘Dog’ for RCCL which is not generating enough ROI and
performing weakly, So RCCL should close down this vertical and may look upon the
opportunity of entering into seaport and airport construction where there is a scope to
grow the business.
● They need to focus on the pre-qualification requirement to enter the seaport and for
airport construction.
The construction industries are on the verge of digitalization, which is disrupting traditional
processes and also holds many opportunities in store. Artificial intelligence is expected to
increase efficiency throughout the entire value chain – from the production of building materials
to the design, planning and construction phase itself, and facility management as well. Therefore,
RCCL should also adopt the artificial intelligence based approach for its construction business.
A five step approach to implement AI-
1. Accept Change,
- Challenges for the construction industry are manifold: e.g. low efficiency gains, lack of
qualified workers, delays and budget overruns. It should be open to new technologies to
tackle the challenges- before its competitor does
2. Make the call
- Identify use cases for the company and rank them
- Build capabilities
- Adjust its data strategy
3. Get going- now
- Start with small, quick-win. AI use cases then continue with more complex cases
- Rely on ready-made, off-the-shell solutions
4. Build strength
- Build capacity in people to be able to develop their own interior algorithms
 - Drive a holistic people-centered approach-including change management, strong
communications and trainings
5. Think big
- Scale up rolling out AI to all areas of the company
- Finally, let AI take over control of entire operations
-
Question 5: Write a brief note providing an update of the following sectors:- Roads, Ports,
Airports, Railways, Power.
Answer:​ The below mentioned are the updates of the following sectors:
1. ROADS-
India has the second largest road network in the world, spanning a total of 5.89 million
kilometres (kms). This road network transports 64.5 per cent of all goods in the country
and 90 per cent of India’s total passenger traffic uses the road network to commute.
Investments/Developments
The Union Minister of State for Road, Transport and Shipping has stated that the
Government aims to boost corporate investment in roads and shipping sector, along with
introducing business-friendly strategies that will balance profitability with effective
project execution. According to the data released by Department for Promotion of
Industry and Internal Trade Policy (DPIIT), construction development including
townships, housing, built-up infrastructure and construction-development projects
attracted Foreign Direct Investment (FDI) inflow worth US$ 25.66 billion were recorded
in the construction development^ sector between April 2000 and March 2020.

2. PORTS-
According to the Ministry of Shipping, around 95 per cent of India's trading by volume
and 70 per cent by value is done through maritime transport. India has 12 major and 205
notified minor and intermediate ports. Under the National Perspective Plan for
Sagarmala, six new mega ports will be developed in the country..
Investments/Developments
● In October 2019, Ease of Doing Business-Implementation of Radio Frequency
Identification (RFID) based Port Access Control System (PACS) at Kolkata Dock
System (KDS) was introduced.
● JSW Infrastructure entered into a build--operate-transfer agreement with Paradip Port
Trust at an investment of Rs 750 crore (US$ 107.31 million) to operate Paradip port.
● Essar Ports will invest US$ 70 million in Hazira port by 2020.
● The zones would be converted into manufacturing hubs, supported by port modernisation
projects, and could span 300–500 kms of the coastline. The Government is also looking
to develop the inland waterway sector as an alternative to road and rail routes to transport
goods to the nation’s ports and hopes to attract private investment in the sector.
● The Ports sector in India has received a cumulative FDI worth US$ 1.64 billion between
April 2000 and March 2020.

3. AIRPORTS-
India is expected to become the world’s third largest aviation market by 2024. Capacity
available in India’s domestic flights, as measured by Available Seat Kilometres, stood at
155,033.4 million kms, while demand, as measured by Revenue Passenger Kilometres,
stood at 136,631.4 million kms in FY19.
Investments/Developments​-
● The Government of India launched a regional connectivity scheme named UDAN (Ude
Desh ka Aam Nagrik) to make flying affordable for the common man.
● AAI plans to invest Rs 25,000 crore (US$ 3.58 billion) in the next five years to augment
facilities and infrastructure at airports. It has opened the airport sector to private
participation as six airports across major cities are being developed under the PPP (public
private partnership) model. Investment to the tune of Rs 42,000-45,000 crore (US$ 6-6.5
billion) is expected in India’s airport infrastructure between FY18-23. Under Union
Budget 2020-21, the Government has introduced Krishi Udan scheme on both domestic
and international routes to help farmers in transporting agricultural products and
improving their product value.

4. RAILWAYS-
Indian Railways is among the world’s largest rail networks. Indian Railways route length
network is spread over 1,23,236 kms, with 13,452 passenger trains and 9,141 freight
trains plying 23 million travellers and 3 million tonnes (MT) of freight daily from 7,349
stations.
Investments/ Developments,
● In November 2019, a pilot project was launched to study the feasibility of using
Railways’ parcel service for e-tail players.
● In November 2019, Indian Railways entered into a Procurement cum Maintenance
Agreement with Madhepura Electric Locomotive Pvt. Ltd. (MELPL), a joint venture of
Indian Railways and France-based Alstom to manufacture 800 electric locomotives for
freight service and its associated maintenance.
● In October 2019, Indian Railway launched One Touch ATVM for fast ticketing at 42
Suburban Stations of Central Railway.
● Khurja –Bhadan section of eastern corridor in Uttar Pradesh to be formally opened for
traffic on October 2, 2019.
● In July 2019, the longest electrified tunnel built between Cherlopalli and Rapuru stations.
 5. POWER-
Power is among the most critical components of infrastructure, crucial for the economic
growth and welfare of nations. The existence and development of adequate infrastructure
is essential for sustained growth of the Indian economy.
Investments and Developments,
● In March 2020, the Central Government signed a virtual agreement to conclude strategic
sales in Kamarajar Port Ltd, THDC India Ltd and North Eastern Electric Power
Corporation Limited (NEEPCO), and it will receive Rs 13,500 crore (US$ 1.93 billion)
from these deals.
● In December 2019, NTPC announced an investment of Rs 50,000 crore (US$ 7.26
billion) to add 10GW solar energy capacity by 2022.
● In August 2019, Sembcorp Industries, the Singapore-based energy firm, made an equity
infusion of Rs 521 crore (US$ 101.6 million) into Sembcorp Energy India Ltd.
● Brookfield will invest US$ 800 million in ReNew Power.
● In September 2019, Adani Transmission planned to acquire the entire stake in Bikaner
Khetri Transmission.
● ReNew Power and Shapoorji Pallonji will invest nearly Rs 750 crore (US$ 0.11 billion)
in a 150 megawatt (mw) floating solar power project in Uttar Pradesh.
● The Government of India expected to offer nearly 20 power transmission projects worth
Rs 16,000 crore (US$ 2.22 billion) for bidding in 2019.

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