1 / 18

INDIA’S INFRASTRUCTURE –Issues and Prospects

INDIA’S INFRASTRUCTURE –Issues and Prospects. INDIA GROWTH STORY. India’s economic growth is attracting wide attention India & China are enjoying high economic growth In 2006-07 India’s growth was 9.4% Economic prosperity is placing huge demands on infrastructure

Download Presentation

INDIA’S INFRASTRUCTURE –Issues and Prospects

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. INDIA’S INFRASTRUCTURE –Issues and Prospects

  2. INDIA GROWTH STORY • India’s economic growth is attracting wide attention • India & China are enjoying high economic growth • In 2006-07 India’s growth was 9.4% • Economic prosperity is placing huge demands on infrastructure • India is the third largest economy behind USA and China

  3. Infrastructure Requirements • World Economic Forum has noted that India’s annual investments in infrastructure between 1998 and 2005 averaged 4% of GDP compared to 8.2% for China • Government of India is addressing the infrastructure requirements • 11th Five Year Plan (2007-2012) calls for more than doubling the financial outlay for infrastructure

  4. Investment requirements • Total financing requirements • $492 billion in the next five years • Of this, $147 billion to come from private investment • Share of private investment in total to rise from 17% to 30% by 2012. • Investment to touch $1.48 trillion by 2017

  5. Interest of international investors • Strong interest evinced by international investors in India’s infrastructure • This includes Private Equity • 3i, Blackstone etc • International banks • Citigroup, Macquarie Bank (Australia), Mizuho (Japan), Deutche Bank • Multilateral institutions including ADB, World Bank, IFC, JBIC, KfW

  6. Challenges before India • India growth story likely to continue • Strong economic growth will fuel further demand on infrastructure • India should absorb the large investments in infrastructure sector to sustain growth momentum • Indian rupee has appreciated against the dollar by 5% over the past year and 20% in the past five years

  7. Development of PPP market in India • PPPs in India are at a nascent stage • Slew of measures by government • 100% foreign investment allowed in infra sectors • Model Concession Agreements evolved • Viability Gap Funding (VGF) • Setting up of IIFCL • Regulatory institutions (Telecom Regulatory Authority, Port Tariff Authority) • PPPs in India are accelerating • 118 projects valued at $13.4 billion are progressing in roads, ports, airport sectors

  8. Transport Sector – the potential in India Aviation infrastructure • 100% foreign direct investment allowed • $ 9 billion programme to upgrade 25 airports • Delhi and Mumbai International airports – two PPP projects with estimated investment of $3.8 billion • 19 greenfield airport locations identified • Airport Economic Regulatory Authority being set up

  9. Air transportation - growth • Passenger traffic is projected to cross 100 million passengers p.a. by 2010   • Cargo traffic to grow at over 20% p.a. over the next five years- To cross 3.3 million tonnes by 2010 • Maintenance, Repair and Overhaul (MRO) growing in a big way • MRO market expected to grow by 10%

  10. Roads and Highways • India has the second longest road network in the world of 3.3 million KMs • Expressways and highways constitute only 2% of the above • US $54 billion earmarked for the sector • Cargo traffic expected to grow by 15-18% over the next 5 years

  11. Roads - Potential • 100% foreign direct investment allowed • Incentives:- 100% income tax exemption for a period of 10 years • - Grants/viability gap funding for marginal projects available • - Model Concession Agreement formulated • Opportunities in construction equipment (earth moving, material handling equipment etc), tolling equipment services and advisory (architecture, structural design, soil investigation etc)

  12. Railways • India has one of the largest railway networks in the world (63,000 route KMs network) • Accounts for 30% of total freight traffic • Traffic volumes set to double by 2012 • Potential for rolling stock, locomotives, passenger coaches, track equipment, signalling equipment

  13. Ports • India has coastline of 7500 KMs • 12 major ports; 187 minor ports • Traffic has grown by a compounded average of 8.5% • Traffic expected to reach 880 million tonnes by 2011-12 • 95% of India’s exports & imports moved by sea • India expects to double its exports to $150 billion in the next five years

  14. Ports • 100% FDI under the automatic route is permitted for port development projects    • 100% income tax exemption is available for a period of 10 years •  Tariff Authority for Major Ports (TAMP) regulates the ceiling for tariffs charged by Major ports • Investment needed in the next 5 years $18 billion

  15. Ports - Opportunity • Opportunities exist in • Development of greenfield ports • Development of container and bulk terminals • Logistics infrastructure • Dredging services • Port related equipment • Ship building, ship repair, maritime training

  16. Role of IIFCL • IIFCL is a SPV to provide long term finance to infrastructure projects • Overriding priority to PPP projects • Finance projects in sectors like roads, airports, ports, power, urban infrastructure etc • Since inception in April 2006 • Financed 77 projects to the tune of $4.3 billion with a total project cost of $31 billion

  17. Conclusion • Investment requirements of infrastructure sector huge • India growth story to continue • 50% of the population is below 25 years • Huge domestic demand • Need to bridge infrastructure gaps to sustain economic growth • Opportunities for international investors significant • India can leverage on its vast human capital to successfully adopt the PPP model

  18. THANK YOU FOR YOUR ATTENTION

More Related