2. OECD defines as power, telecom, roads, and water
supply
In investment terms, it really constitutes
“infrastructure” that is suitable for PPP investment
– political and social constraint
URGENT NEED IN INDIA :
Infrastructure can directly assist the poor by:
1. Enhancing economic activity
2. Removing bottlenecks in a local economy
3.generating distributional effects by increasing the
access of the poor to product markets
3.
4.
5. HIGHWAYS
66,590 Km of NH (2% of network, 40% of traffic): only 12% Four lane;
50% Two-lane; and 38% Single-lane
PORTS
Inadequate berths, rail / road connectivity and draft are
constraints
AIRPORTS
Inadequate capacity: Runways, aircraft handling capacity,
parking space & terminal buildings
RAILWAYS
Old technology; saturated routes: slow average speeds (freight:
22 kmph; passengers: 50 kmph); low payload to Tare ratio (2.5)
POWER
9.6% energy shortage; 40% T&D losses; absence of competition
6. • Roads (USD 20b in each of next 2 yrs)
Total opportunity of USD 42.2 bn over next 2 yrs
Expressways additional opportunity of USD 11 bn
• Power (USD 200 bn in next 4 yrs)
12th Plan capacity addition of 100GW (vs. 78GW)
Private energy developers dominant share (64%)
Investment of USD102b investment in power plants
and an additional USD102b in T&D
• Railways(INR800-900b spending over the next 1-2 yrs)
Dedicated freight corridor (USD15b) and associated
feeder route upgrades (USD5b)
comprise 30% of total spending. Approximately 26%
(USD15.6b) allocated for asset modernization.
7. 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
Aviation Industry:
100% foreign direct investment allowed
$ 9 billion program to upgrade 25 airports
Delhi and Mumbai International airports – two PPP
projects with estimated investment of $3.8 billion
19 greenfield airport locations identified
Airport Economic Regulatory Authority being set up
9. • Lack of infrastructure to support real estate
development
• Transparency and governance
• Institutionalization
• Sources of finance
• Corruption
• Affordability of residential real estate
10. POLICY FRAMEWORK MARKET SIZE
• 100% FDI under automatic route for • 170+ NHAI Projects having a project
all road projects cost of Rs. 1.21lac crore at various
stages of bidding
• 100% income tax exemption for a • Multiple State Road Projects are on
period of 10 years anvil (Bihar, UP, Punjab and MP)
• Overseas borrowing amount under • Highways: opportunity of Rs. 1.90
ECB Policy increased to USD 500 mn. Lac crore in the next 2 years
•Indexed user charges to recover • Expressways: additional
building / maintenance costs opportunity of Rs. 50k crore
11. • New drinking water projects (24X7)
• Solid waste management and sewage
• New mass rapid transport systems
• Bus terminals
• Key players: Jindal
Water, IVRCL, JUSCO, Global Players (such as
Vivendi)
12. • Supplement scarce public resources.
• Investment largely limited to PPP in physical
infrastructure sector (roads, ports, power, airports,
metro, urban sector).
• Few PPPs in social sector (education, health, water
supply).
• Mixed success stories.
• Positive climate.
14. In 2012, A.T. Kearney FDI Confidence Index
has ranked India second most attractive
destination.
During August 2012, top 10 sectors attracting
highest FDI inflows included 12% in built up
infrastructure and 7% telecommunication.
During the last decade, FDI entrance in the
economy was hindered because Infrastructure
investment were not paying back
NOTE: Major factor hindering PE flows in
infrastructure sector comprise delay in getting
approvals and long GESTATION Period.
15. The Planning Commission has projected that
investment in infrastructure would almost
double at US$ 1,025 billion, 50% is expected to
come from private sector, whose investment is
36% in eleventh plan.
12 1200
10 1,024.81
1000
8 800
6 600
4 400 Infra Invsmt. As % of GDP
229.51 259.88
2 178.17 202.38 200 Infra invstmt(US $ billion)
132.08 154.86
0 0
Base Year( 2012–13 2013–14 2014–15 2015–16 2016–17 Total 12th
2011-12) Plan
16. 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
17. http://indiabudget.nic.in/es2011-12/echap-
11.pdf
http://unctad.org/en/docs/iteiit20061a6_en.p
df
Budget 2012: Infrastructure sector gets major
boost : North, News - India Today
Union Budget 2011: Bonanza for infrastructure
sector - Moneycontrol.com