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For updated information, please visit www.ibef.org March 2018
INFRASTRUCTURE
For updated information, please visit www.ibef.org Infrastructure 2
Table of Content
Advantage India…………………..….……. 4
Market Overview and Trends………...…….6
Strategies adopted……………....…………17
Growth Drivers and Opportunities…...…...21
Industry Organisations…………......………32
Useful Information……….……….....…......34
Porters Five Forces Framework…….…….16
Executive Summary……………….….…….3
Case studies......………………..………….28
For updated information, please visit www.ibef.org Infrastructure 3
EXECUTIVE SUMMARY
Source: Media sources, DIPP, Aranca Research
FDI received in Construction Development sector (townships, housing, built up infrastructure
and construction development projects) from April 2000 to December 2017 stood at US$ 24.67 billion ; and
in Construction (Infrastructure) activities stood at US$ 12.36 billion.
Rising foreign direct
investment (FDI) in the
sector
In the Union Budget 2018-19, the Government of India has given a massive push to the infrastructure sector
by allocating Rs 5.97 lakh crore (US$ 92.22 billion) for the sector.
High budgetary
allocation for
infrastructure
The infrastructure sector in India witnessed 33 deals in FY2016-17 involving US$ 3.49 billion as against
US$ 2.98 billion raised across 31 deals in FY2015-16, with the majority of deals led by the power, roads and
renewable sectors. Also, in April 2017, companies in Malaysia and India signed deals for infrastructure
projects worth US$ 3.86 to be implemented in India.
Rising infrastructure
deals
Private sector is emerging as a key player across various infrastructure segments, ranging from roads and
communications to power and airports
Increasing private
sector involvement
In 2016, India jumped 19 places in World Bank's Logistics Performance Index (LPI) 2016, to rank 35th
amongst 160 countries. Improvement in logistics
Infrastructure
ADVANTAGE INDIA
For updated information, please visit www.ibef.org Infrastructure 5
ADVANTAGE INDIA
India has a requirement of investment worth Rs 50 trillion (US$
777.73 billion) in infrastructure by 2022 to have sustainable
development in the country. Sectors like power transmission,
roads & highways and renewable energy will drive the
investments in the coming years.
Favourable valuation and earnings outlook makes this sector
an attractive opportunity.
Only 24 per cent of the National Highway network in India is
four-lane, therefore there is immense scope for improvement.
The Regional Connectivity Scheme (RCS) gives
opportunity for development of airports.
Increasing impetus to develop
infrastructure in the country is attracting
the major global players like China Harbour
Engineering and Mizuho Financial Group.
Construction Development sector and
Infrastructure activities sector received FDI
inflows amounting to US$ 24.67 billion and
US$ 12.36 billion, respectively from April 2000 to December
2017.
With initiatives like ‘Housing for All’ and
‘Smart Cities Mission’ the Government of
India is working on reducing bottlenecks
and impeding growth in the infrastructure
sector.
With the UDAY Scheme, that will help in financial
turnaround and revival of electricity distribution
companies of India, the power sector has been
registering strong growth.
100 per cent FDI is permitted under the automatic across
various infrastructure sectors.
ADVANTAGE
INDIA
Source: Media Sources, DIPP, Aranca Research, PricewaterhouseCoopers
Note: UDAY – Ujwal Discom Assurance Yojana
Infrastructure
MARKET OVERVIEW
AND TRENDS
For updated information, please visit www.ibef.org Infrastructure 7
INCREASING FDI INFLOWS INTO THE SECTOR
Note: FDI – Foreign Direct Investment, * up to December 2017
Source: DIPP, Media sources, Aranca research
Cumulative FDI inflows in the Construction Activities sector, which
includes infrastructure, reached US$ 12.36 billion between April
2000 – December 2017.
Cumulative FDI inflows in the Construction Development sector,
which includes townships, built-up infrastructure and
construction- development projects, reached US$ 24.67 billion
between April 2000 – December 2017.
In January 2018, the National Investment and Infrastructure Fund
(NIIF) partnered with UAE-based DP World to create a platform that
will mobilise investments worth US$ 3 billion into ports, terminals,
transportation, and logistics businesses in India.
Squared Capital, a global infrastructure investment company, plans
to raise up to US$ 4 billion through its second infrastructure fund,
which will be invested in infrastructure assets in India and across the
globe.
Visakhapatnam port traffic (million tonnes) Cumulative FDI inflows from April 2000 (US$ billion)
2.0
9
2.5
8
3.4
3
7.9
6
9.8
2
12
.36
22.0
8
23.3
24.0
6
24.1
8
24.2
9
24.6
7
0
5
10
15
20
25
30
FY
13
FY
14
FY
15
FY
16
FY
17
FY
18*
Construction activities (includes infrastructure)
Construction Development: Townships, housing, built-upinfrastructure and construction-development projects
For updated information, please visit www.ibef.org Infrastructure 8
SUMMARY OF INFRASTRUCTURE PROJECTS
COMPLETED DURING THE 12TH FIVE YEAR PLAN
Source: Ministry of Statistics and Programme Implementation (MoSPI)
Sector Number of Projects Cumulative Expenditure (US$)
Road Transport and Highways 91 8.7 billion
Power 73 16.63 billion
Petroleum 65 19.48 billion
Railways 33 3.81 billion
Steel 20 8.13 billion
Shipping and Ports 20 1.78 billion
Telecommunications 14 463.62 million
Coal 9 2.26 billion
Fertilisers 6 596.24 million
Civil Aviation 5 861.16 million
Urban Development 5 678.83 million
Atomic Energy 1 168.93 million
For updated information, please visit www.ibef.org Infrastructure 9
RECENT PPP PROJECTS IN INFRASTRUCTURE
Source: infrastructureIndia.gov.in, Aranca Research
Project Project
Authority
Project
Concessionaire Name Signing Date
Project Cost
(US$) Location
Period
(months)
Six laning of Handia-
Varanasi section in length
of 72.4 km NHAI
G R Infraprojects
Limited 31-Mar-2017 387.37 million
Uttar
Pradesh 180
Six laning of Chitradurga-
Davanagere section in
length of 72.7 km
NHAI
PNC Infratech Limited 31-Mar-2017 224.26 million Karnataka 180
Four laning of Singhara-
Binjabahal section in
length of 104.1 km
NHAI
Montecarlo Limited 29-Mar-2017 222.07 million Odisha 180
Four laning of Jhansi-
Khajuraho section in
length of 76.3 km
NHAI
PNC Infratech Limited
28-Mar-2017 220.51 million
Multi State/
Centre 180
Four laning of Waranga-
Mahagaon section in
length of 66.9 km
NHAI
Sadbhav Engineering
Limited 28-Mar-2017 166.90 million Maharashtra 180
Four/six laning of Bodare-
Dhule section in length of
62.8 km under NHDP-IV
NHAI
Sunil Hi-Tech
Engineers Private
Limited
23-Mar-2017 199.16 million
Andhra
Pradesh 180
Six laning of NH-8 in
length of 93.2 k m of
Shamlaji-Chiloda section
NHAI
Sabarkantha Annuity
Private Limited 25-Jan-2017 201.74 million
Gujarat 180
Note: NHAI : National Highway Authority of India
For updated information, please visit www.ibef.org Infrastructure 10
STRONG MOMENTUM IN EXPANSION OF ROADWAYS
6.9
6.8
8.3
8.6
8.6
11
13
.4
16
.10
19
.20
0
2
4
6
8
10
12
14
16
18
20
200
9
201
0
201
1
201
2
201
3
201
4
201
5E
201
6F
201
7F
Source: Business Monitor International (BMI), Ministry of External Affairs, Union Budget 2018-19
Note: FY - Financial Year, F - Forecast
Value of total roads and bridges infrastructure in India is estimated to
have expanded at a CAGR of 13.6 per cent over FY09–17 to US$
19.2 billion
An outlay of Rs 6.92 trillion (US$ 107.64 billion) was approved by the
Government of India in October 2017 to build a road network of
83,677 km over the next five years. The outlay includes the
Bharatmala projects worth Rs 5.35 trillion (83.25 billion).
In Union Budget 2018-19, Rs 71,000 crore (US$ 10.97 billion) was
allocated for national highways while Rs 19,000 crore (US$ 2.94
billion) was allocated to Pradhan Mantri Gram Sadak Yojana
(PMGSY) for development of roads in rural and backward areas of
the country.
All villages in India will be connected through a road network by 2019
under Pradhan Mantri Gram Sadak Yojana (PMGSY).
Highway network in the country is expected to cover 50,0000 km by
2019. The National Highway Authority of India has created a new
highway operations division to focus on all non-commercial highway
operational activities like electronic toll collection, road safety,
incident management, and other modern amenities.
In December 2017, the National Highway Authority of India (NHAI)
created the National Highways Investment Promotion Cell (NHIPC)
to attract foreign and domestic investments towards highway projects
in India.
Visakhapatnam port traffic (million tonnes) Roads/ bridges infrastructure value in India (US$ billion)
CAGR 13.6%
For updated information, please visit www.ibef.org Infrastructure 11
STRONG REVENUE GROWTH FOR INDIAN RAILWAYS
8.6
8
9.8
7
10
.97
11
.97
12
.88
14
.31
17
.11
19
.09
21
.66
24
.49
24
.60
0.00
5.00
10.00
15.00
20.00
25.00
30.00
200
6-0
7
200
7-0
8
200
8-0
9
200
9-1
0
201
0-1
1
201
1-1
2
201
2-1
3
201
3-1
4
201
4-1
5
201
5-1
6
201
6-1
7
Source: Vision 2020, Ministry of Railways, Aranca Research
Note: CAGR – Compound Annual Growth Rate, E – Estimates, FY – Indian Financial Year (April–March)
Revenue growth has been strong over the years; during FY07–17,
revenues increased at a CAGR of 11 per cent to US$ 24.60 billion in
FY17. The sundry earnings of Indian Railways reached Rs 1,775.78
crore (US$ 276.21 million) till September 2017.
Revenues from the sector are estimated to reach to US$ 44.5 billion
by the end of FY20.
The Indian Railways received the highest ever budgetary allocation
under Union Budget 2018-19 at Rs 1.48 trillion (US$ 22.86 billion).
Out of this allocation, Rs 1.46 trillion (US$ 22.55 billion) is capital
expenditure that will be used for capacity creation and
redevelopment of 600 railway stations.
The Ministry of Railways is working on a plan to earn Rs 15,000
crore (US$ 1.56 billion) over the next 10-20 years through a rail
display network (RDN), enabling real-time information to
passengers.
Indian Railways will require investment of Rs 35.3 trillion (US$
545.26 billion) by 2032 for capacity addition and modernisation. The
capital expenditure in the sector is expected to be increased 92 per
cent annually.
In March 2017, Railways started a new segment of revenue
generation channel through auctioning for advertising and branding
contracts.
All Indian Railways trains will become electric by 2022.
Visakhapatnam port traffic (million tonnes) Gross revenue trends over the years (US$ billion)
CAGR 11%
For updated information, please visit www.ibef.org Infrastructure 12
POWER GENERATION CAPACITY HAS INCREASED AT
A HEALTHY PACE
13
2.3
0
14
3.1
0
14
8.0
0
15
9.4
0
17
3.6
0
19
9.9
0
22
3.3
0
23
7.7
0
27
2.5
0
28
0.3
3 3
26
.80
33
4.1
5
0
50
100
150
200
250
300
350
400
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
FY
17
FY
18*
Source: CEA (Central Electricity Authority), Aranca Research
Note: GW - Gigawatt, CAGR - Compound Annual Growth Rate; FY18* - data up to February 2018
Installed capacity increased steadily over the years, posting a CAGR
of 10.57 per cent in FY09–17 and stood at 326.84 (GW) by the end
of FY17.
As of February 2018, India had a power generation capacity of
334.15 GW.
During FY18* electricity generation in India reached 1,095.76 billion
units (BU).
Indian energy sector is expected to offer investment opportunities
worth US$ 300 billion over the next 10 years.
Under Union Budget 2018-19 following allocations were made for the
power sector:
• Rs 16,000 crore (US$ 2.47 billion) for the Sahaj Bijli Har Ghar
Yojana (Saubhagya) for last mile connectivity to rural households
• Rs 3,800 crore (US$ 586.96 million) for Deendayal Upadhayaya
Gram Jyoti Yojna
• Rs 4,900 crore (US$ 756.87 million) for Integrated Power
Development Scheme (IPDS)
• Rs 4,200 crore (US$ 648.75 million) for capacity addition in wind
power, solar power and green energy corridor project
Visakhapatnam port traffic (million tonnes) Installed electricity generation capacity (GW)
CAGR 10.57%
For updated information, please visit www.ibef.org Infrastructure 13
PERFORMANCE OF EIGHT CORE INFRASTRUCTURE
INDUSTRIES
Source: Ministry of Commerce and Industry
12
1.8
94
.5
66
.5
11
9.7
10
6.6
13
3.1
12
2 1
41
.6
11
6.8
94
.2
68
.9
12
5.1
10
7
14
0
12
7.3
14
9.8
0
20
40
60
80
100
120
140
160
Coa
l
Cru
de O
il
Natu
ral G
as
Refin
ery
Pro
du
cts
Fe
rtili
se
rs
Ste
el
Cem
en
t
Ele
ctr
icity
2016-17 April'17 - Jan'18
Index of eight core Industries The eight core infrastructure industries include coal, crude oil, natural
gas, refinery products, fertilisers, steel, cement and electricity.
The growth in the index was led by Steel (6.4 per cent), electricity
(5.4 per cent), refinery products (4.7 per cent), cement (4.4 per cent)
and natural gas (3.5 per cent).
The cumulative growth of the index between April 2017-January
2018 was 4.3 per cent.
The overall index grew by 4.8 per cent during FY 2016-17.
For updated information, please visit www.ibef.org Infrastructure 14
GROWTH IN INFRASTRUCTURE RELATED ACTIVITIES
Source: Economic Survey 2017
Growth in infrastructure related activities between
April-September 2016
6.6
9.8
1.8
-3.9
5.3
10
.0
5.8
-6
-4
-2
0
2
4
6
8
10
12
Po
wer
Ge
nera
tion
Hig
hw
ay
con
str
uctio
n/
wid
en
ing
Rail
fre
igh
ttr
affic
Railw
ay
earn
ing
s
Carg
o a
tm
ajo
r p
ort
s
Expo
rt c
arg
o
Imp
ort
ca
rgo
Infrastructure related activities witnessed strong growth between
April-September 2016.
The activities that registered the highest growth include export cargo
(10 per cent), highway construction/widening (9.8 per cent), power
generation (6.6 per cent), import cargo (5.8 per cent) and cargo at
major ports (5.3 per cent).
Note: Data is as per latest available information
For updated information, please visit www.ibef.org Infrastructure 15
KEY PRIVATE PLAYERS
Major projects: Mumbai–Pune BOT Project, Pune–Nashik BOT Project, Bharuch–Surat BOT Project,
Thane–Bhiwandi by-pass 4 Lane Project, Thane Ghodbunder BOT Project, Ahmedabad–Baroda NH-8, 6
laning of Agra - Etawah bypass
Major projects: North Karnataka Expressway, West Gujarat Expressway, Noida Toll Bridge, Ahmedabad -
Mehsana Toll Road, East Coast Road, Kotakatta Kurnool Road Project, East Coast Road, Hazaribagh
Ranchi Expressway Ltd, Karnataka Toll Bridges
Major projects: NH6 Dhankuni to Kharagpur, Sambalpur Baragarh, NH4 Belgaum Dharwad, NH-3
Pimpalgaon – Nashik – Gonde Road (JV with L&T), Jaora – Nayagaon Road, Chennai Outer Ring Road,
Modhul – Nippani Road, Indore Edalabad Road, Wainganga Bridge, Ahmednagar Aurangabad Road
Major projects: Bandra–Worli Sea Link, Badarpur Elevated Highway Project, Delhi Faridabad Elevated
Expressway, Breakwater construction for new port at Ennore, Chennai, New Railway Line Project from
Jiribam - Tupul
Major Projects: Hyderabad-Vijayawada Road Project, Sikkim’s Greenfield Airport, The Medanta (Medicity),
Bangalore Metro Rail Project, Upgradation of Belgaum-Maharashtra Border Section of NH-4, Elevated
Viaduct, Delhi Metro
Major Projects: Hyderabad Metro Rail, Construction of a 6-lane bridge over the Ganges river, Mechanise
Track Laying for India's first 626 km Dedicated Freight Corridor, Monorail in Mumbai, Railway
electrification works and Rigid Overhead Contact System for the Delhi Metro, Kakrapar nuclear power
project and Srinagar Hydel Power Project, Uttaranchal
Source: Company websites, Aranca Research
For updated information, please visit www.ibef.org Infrastructure 16
Porter’s Five Force Framework Analysis
Low – Bargaining power of suppliers is
low as the order quantity by buyers is in
bulk.
Bargaining Power of Suppliers
Low – Threat is low as there aren’t
substitutes for transport infrastructure
like roads and railways, for airports etc.
However, if technology like Hyper Loop
becomes functional, it can possess some
threat to traditional modes of transport.
Threat of Substitutes
Medium – In the past, competition in this
sector was high in terms of bidding for
Government projects.
However, in the more recent years,
bidding has rationalised and the
competition between players has become
stable.
Competitive Rivalry
Low - Threat is low due to the capital-
intensive nature of the industry; all the
capable players have already entered in
the sector. Also, there aren’t much
foreign players involved in infrastructure
projects in India.
Threat of New Entrants
High – Buyer here is the Government;
therefore there is high bargaining power,
as it is the Government that makes the
final decision about whom the tender for
a project goes to.
Bargaining Power of Buyers
Positive Impact
Neutral Impact
Negative Impact
Source: Aranca Research
Infrastructure
STRATEGIES
ADOPTED
For updated information, please visit www.ibef.org Infrastructure 18
The company selected countries and regions with the maximum congruence to its strengths and the most favourable
logistics. The Middle East and China have been identified as prime centres for expansion for manufacturing and projects
businesses. L&T seeks to ramp up its presence in these markets through a slew of new projects and business initiatives that
will add breadth and depth to the existing association with the industry and infrastructure of the GCC countries and other
states in the region. L&T is setting up a Modular Fabrication Yard in Oman that will build equipment for offshore applications
and for the hydrocarbon sector.
Global sourcing policy is another key area that has given a thrust to its international strategy. With a steady rise in material
costs, the company has placed sourcing teams in China, Europe and Russia.
To expand nuclear energy portfoilo, efforts to increase scope by offering products beyond conventional island in Nuclear
business are under way.
Considering the National Action Plan on Climate Change targeting 15% of electricity generation from renewables by 2020,
BHEL is looking towards expanding its capacity to manufacture photo voltaic modules and cells.
BHEL's collaborative initiatives to address the growing demand potential in Railway Transportation including Metro and
Suburban Railways include initiative with Indian Railways for setting up a greenfield Mainline Electrical Multiple Unit (MEMU)
Coach Factory in Rajasthan
STRATEGIES
Source: Company websites, Media sources, Aranca research
GMR Energy Limited (GEL), a subsidiary of GMR Infrastructure Ltd (GIL) and TNB Repair and Maintenance Sdn Bhd (TNB
Remaco) have signed an MoU to collaborate and set up an O&M joint venture. As per the three-year MOU, GEL and TNB
Remaco will identify business opportunities in the high-potential Indian market and provide operation and maintenance
services to the power plants. hrough this JV, GEL and TNB REMACO will extend their technical expertise to the several power
plants in India. The company is planning to expand its airport vertical and consolidate the energy business along with divesting
its highway projects.
Adani Ports and Special Economic Zone (APSEZ) Ltd aims to complete expansion of Adani International Container Terminal
Pvt. Ltd (AICTPL) at Mundra port by 2017 to create a transhipment hub for the Middle East, South Asia and India. Adani Ports
has also secured a contract from Tamil Nadu State Electricity Board for shipment of coal, adding muscle to its coastal shipping
plan.
Infrastructure
GROWTH DRIVERS
AND OPPORTUNITIES
For updated information, please visit www.ibef.org Infrastructure 20
GROWTH DRIVERS FOR INFRASTRUCTURE IN INDIA
Growth Drivers
Government
Initiatives
Public Private
Partnerships
International
Investment
Housing Development
Infrastructure
Needs
For updated information, please visit www.ibef.org Infrastructure 21
GOVERNMENT INITIATIVES DRIVING GROWTH IN THE
SECTOR
For 2018-19, the total capital expenditure of Railways will
be Rs 1.46 trillion (US$ 22.55 billion).
As per Union Budget 2018-19, capacity constraints in the
railways network will be eliminated through doubling of
18,000 km of tracks, third and fourth lines and
conversion of 5,000 km of tracks into broad
gauge.
A new Metro Rail Policy was approved in
August 2017.
Budget allocation for road sector increased to US$ 10.07
billion in 2017-18 from US$ 8.99 billion in 2016-17.
2,000 kms of coastal connectivity roads have been identified
for construction and development .
Select airports in Tier 2 cities will be taken up
for operation and maintenance in the PPP
mode in the coming years.
Road projects worth Rs 6.92 trillion (US$
107.64 billion) approved in October 2017.
In 2017, government announced plans
to facilitate higher investment in
affordable housing.
The National Housing Bank will refinance
individual housing loans of about US$ 3.1
billion in 2017-18.
The National Steel Policy 2017 aims at higher spending on
infrastructure and construction through government
initiatives.
Rs 10,000 crore (US$ 1.54 billion)
allocated in Union Budget 2018-19 for
creation and augmentation of telecom
infrastructure in the country.
In the second phase of Strategic Crude
Oil reserves, reserve capacity will be
increased to 15.33 MT.
In the second phase of Solar Park Development an
additional capacity of 20,000 MW will be generated.
Total allocation for
infrastructure in
Budget of 2017-18
stands at US$ 61.48
billion.
Source: Union Budget 2017-18, Media sources, Aranca research
For updated information, please visit www.ibef.org Infrastructure 22
AFFORDABLE HOUSING
39
%
30
%
27
%
33
% 36
%
34
%
34
%
32
%
30
%
26
%
22
%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
Source: Bloomberg, Economic Times
In Budget 2017-18, affordable housing was given infrastructure
status.
As of June 2017, about 69 percent of the country’s 1.3 billion people
were in prime house-buying age -- 20 to 40 years, more than any
than any other nation.
As per Union Budget 2018-19, a dedicated Affordable Housing Fund
(AHF) will be established under the National Housing Bank which will
be funded by shortfall in priority sector lending and government
bonds. In March 2018, construction of additional 3,21,567 affordable
houses was sanctioned under Pradhan Mantri Awas Yojana (PMAY),
Urban.
“Housing for All” programme, launched in June 2015 aims to build 20
million urban homes and 30 million rural houses by 2022.
Approximately, 60 million new homes are expected to be built in
India between 2018 and 2024 with social and affordable housing
rising almost 70 percent to 10.5 million by 2024, exceeding the 33
percent increase in the premium market.
In November 2017, the Government of India increased the carpet
area for houses falling under the affordable housing scheme, giving
a boost to developers having large inventories.
Visakhapatnam port traffic (million tonnes) Trend in affordability of a US$ 45,000 house
For updated information, please visit www.ibef.org Infrastructure 23
INFRASTRUCTURE DEVELOPMENT IN NORTHEAST
INDIA
Source: Budget, Economic Times, Media sources, Aranca research
In December 2017, the North East Special Infrastructure Development Scheme (NESIDS) was approved by Government of India with 100 per cent
funding from the central government for infrastructure projects in the region.
In October 2017, the Government of India announced that highway projects worth Rs 1.45 trillion (US$ 22.6 billion) would be undertaken in the
north-east region of the country in the coming two to three years.
In August 2017, India-Japan Coordination Forum for Development of North East was formed to focus on major projects such as road and network
development, disaster management, connectivity, and electricity provision.
With an eye on China, India is working on a slew of road and bridge projects to improve connectivity with Bangladesh, Nepal and Myanmar.
India is also pulling out all stops to expedite the South Asian Sub-Regional Economic Cooperation (SASEC) road connectivity programme in the
backdrop of China’s ambitious One Belt One Road ( Obor).
Government announced plans to invest US$ 6.98 billion in Northeast States.
As of May 2017, road infrastructure was being created in the North-East at an investment of US$ 6.2 billion, nineteen major railway projects had
been started and the electricity infrastructure is also being improved. The whole region is being developed to give impetus to tourism.
Arunachal Pradesh was brought on the railway map of India with India’s longest rail-cum-road bridge — the 4.94-km long Bogibeel bridge over
Brahmaputra.
Government, has also, announced plans to convert all meter gauge tracks in the northeastern states to broad gauge tracks.
In May 2017, Mr Narendra Modi, Prime Minister of India, inaugurated India’s longest river bridge – the 9.15 kilometer long Dhola-Sadiya bridge over
the Brahmaputra river in Assam. The bridge will provide easy access to the people of Assam and Arunachal Pradesh and will improve its defence
requirements along the Sino-Indian border.
For updated information, please visit www.ibef.org Infrastructure 24
The AAI plans to spend over Rs 21,000 crore (US$ 3.2 billion) between 2018-22 to build new terminal and
expand capacity of existing ones.
The Government of Andhra Pradesh is to develop greenfield airports in six cities-Nizamabad, Nellore,
Kurnool, Ramagundam, Tadepalligudem and Kothagudem under the PPP model.
Upfront subsidy has been proposed through which non-metro airports would be funded by imposing 2 per
cent levy on both domestic and international airfares.
About 22 airports to get connected under regional connectivity scheme of AAI.
Over 30 airport development projects are under progress across various regions in Northeast India.
AAI plans to develop over 20 airports in tier II and III cities in next 5 years
Around 55 new airports are required in India by 2030 with an investment of US$ 36-45 billion.
The Airports Authority of India aims to bring around 250 airports under operation across the country by 2020
The AAI has developed and upgraded over 23 metro airports in the last 5 years
AAI plans to develop city-side infrastructure at 13 regional airports across India, with help from private
players for building of hotels, car parks and other facilities, and thereby boost its non-aeronautical revenues.
Airport housing will also have height restrictions to avoid interference with flight paths. They will also have to
be far from the runway and 45m above a defined level of the airport, which will allow 4-5 floors to be built
The development of Navi Mumbai airport has been approved. The project will be developed on 74:26 per
cent partnership between MIAL and Cidco and airport’s phase 1 with annual handling capacity of 10 million
passengers each year rephrasing it from the origin
AIRPORTS INFRASTRUCTURE INVESTMENT
Metro airports
Non-metro airports
Source: Media sources, Aranca research
For updated information, please visit www.ibef.org Infrastructure 25
At least ten Indian cities are working on metro railway projects and the government initiated a plan in 2012 to
study the feasibility of such networks in all cities with a population of more than 2 million.
More than 500 billion rupees ($7.7 billion) worth of metro projects are underway in India and this pile will
probably grow.
Some 200 trains cover 70,000 km everyday on 190-km-long Metro corridors in Delhi. The numbers have
increase after another 140 km addition of lines in 2016.
A new Metro Rail Policy was announced in August 2017, which will give boost to private investments by
mandating public private partnership (PPP) component in new projects.
A new Metro Rail Act will be enacted by rationalising the existing laws. This will facilitate greater private
participation and investment in construction and operation.
Monorail has made its beginning in India with Mumbai being the first city in the country to have this transport
system in place.
It took more than six years from the date of inviting Request for Qualification for MMRDA (Mumbai
Metropolitan Region Development Authority) to complete a part of the project involving a stretch of 8.26
km.
Monorail Projects are being developed in Chennai, Pune, Thiruvananthpuram, Bengaluru, Thane, Delhi, Port
Blair, Dehradun, Chandigarh etc.
METRO RAIL AND MONORAIL INFRASTRUCTURE
INVESTMENT
Metro Rail
Monorail
Source: Media sources, Aranca research
For updated information, please visit www.ibef.org Infrastructure 26
KEY HIGHLIGHTS OF UNION BUDGET 2018-19
Source: Union Budget 2018-19
The Government of India has given a massive push to the infrastructure sector by allocating Rs 5.97 lakh crore (US$ 92.22 billion) for the sector.
Planned outlay for the road sector is Rs 1.21 lakh crore (US$ 18.69 billion) while allocation of Rs 71,000 crore (US$ 10.97 billion) has been made
for development of national highways across the country.
The Indian Railways received the highest ever budgetary allocation under Union Budget 2018-19 at Rs 1.48 trillion (US$ 22.86 billion). Out of this
allocation, Rs 1.46 trillion (US$ 22.55 billion) is capital expenditure that will be used for capacity creation and redevelopment of 600 railway
stations.
Rs 16,000 crore (US$2.47 billion) towards the Saubhagya scheme. The scheme aims to achieve universal household electrification in the country.
Rs 4,200 crore (US$ 648.75 billion) to increase capacity of Green Energy Corridor Project along with other wind and solar power projects.
Allocation of Rs 10,000 crore (US$ 1.55 billion) to boost telecom infrastructure.
Water supply to be provided to all households in 500 cities.
Allocation of Rs 452.25 crore (US$ 69.86 million) for the upgradation of state government medical colleges (PG seats) at the district hospitals and
Rs 794.07 crore (US$ 122.66 million) for government medical colleges (UG seats) and government health institutions.
For updated information, please visit www.ibef.org Infrastructure 27
The Government is making an attempt to revive and give boost to Public Private Partnerships.
For creating an eco-system to make India a global hub for electronics manufacturing a provision of
US$115.62 million in 2017-18 in incentive schemes like M-SIPS and EDF.
Introduction of National Steel Policy in 2017 to aim at higher spending on infrastructure and construction
through government initiatives.
Total allocation for infrastructure in Budget of 2018-19 stands at Rs 5.97 lakh crore (US$ 92.22 billion).
In November 2017, logistics sector was given the status of infrastructure, to boost investments in the sector.
Japanese investment has played significant role in India’s growth story. Japan has pledged investments of
around US$35 billion for the period of 2014-19 to boost India’s manufacturing and infrastructure sectors.
The Japanese government is constantly looking for investment opportunities in India.
Asian Development Bank will provide US$ 275 million loan for a piped water supply project for rapidly
urbanising small towns, covering 3 lakh households, in Madhya Pradesh.
With every sixth urban person globally being an Indian, the real estate and construction sector holds
significant opportunity for both global and domestic companies engaged across the value chain.
India will need to construct 43,000 houses every day until 2022 to achieve the vision of Housing for All by
2022.Hundreds of new cities need to be developed over the next decade.
This has the potential for catapulting India to 3rd largest construction market globally. The sector is expected
to contribute 15 per cent to the Indian economy by 2030
The recent policy reforms such as the Real Estate Act, GST, REITs, steps to reduce approval delays etc. are
only going to strengthen the real estate and construction sector.
OPPORTUNITIES IN INFRASTRUCTURE
Government Initiatives
International
Associations
Urban Indian Real
Estate
Source: Media sources, Aranca research, Ministry of Finance
Infrastructure
CASE STUDIES
For updated information, please visit www.ibef.org Infrastructure 29
L&T INFRASTRUCTURE DEVELOPMENT PROJECTS
LIMITED (L&T IDPL)…(1/2)
Revenue (US$ million)
8.7
3
15
.42
15
.94
36
.38
24
9.4
1
15
2.7
0
85
.28
0
50
100
150
200
250
300
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
FY
17
L&T IDPL is the pioneer of the Public-Private-Partnership (PPP)
model in India.
It is a subsidiary of the Larsen and Toubro group and was set up in
1995.
The company has implemented major infrastructure projects across
roads, bridges, ports, airports water supply, hydel energy, metro
railway and urban infrastructure.
The company’s revenue has increased from US$ 9.12 million in FY
2010-11 to US$ 396.45 million in FY 2015-16.
During FY17, the company earned total revenue of Rs 572.11 crore
(US$ 85.28 million).
Source: Company website
For updated information, please visit www.ibef.org Infrastructure 30
L&T INFRASTRUCTURE DEVELOPMENT PROJECTS
LIMITED (L&T IDPL)… (2/2)
Coimbatore Bypass
Project
Narmada Bridge
Project
Jaipur-Kishangarh
Expressway Project
Second Vivekananda
Bridge Project in West
Bengal
Bangalore
International Airport
Panipat Elevated
Corridor Project
Jadcherla-Kothakota
Road Project
Palanpur-
Swaroopganj Road
Krishnagiri-Thopur
Toll Road Project
Vadodara-Bharuch
Tollway Project
Chennai-Tada toll
road project
Pimpalgaon - Nashik -
Gonde road project
Dharma Port Project
Gandhidham-
Samakhiali road
project
Krishnagiri-Walajapet
road project
Devihalli-Hassan road
project
Hyderabad Metro
project
Kacchigarh Port
Project
Beawar-Pali-Pindwara
Road project
Sangareddy –
Karnataka /
Maharashtra border
Road Project
Jalgaon to
Maharashtra-Gujarat
border (Maharashtra)
Road Project
Rajkot Jamnagar
Vadinar Road Project
Halol Godhra
Shamlaji Road Project
Pimpalgaon Nashik
Gonde road project –
India's first all women
toll plaza
1995-2005 2006-2009 2010-2011 2012-2013 2014-2016
Canada Pension Plan
Investment Board
invests in L&T IDPL
Sambalpur Rourkela
Road project
Kudgi Power
Transmission Line
project
L&T IDPL completes
development of the
longest four-lane road
project under the
Public Private
Partnership (PPP)
model
Source: Company website
For updated information, please visit www.ibef.org Infrastructure 31
YAMUNA EXPRESSWAY – A PPP SUCCESS STORY
Source: Jaypee, Yamunaexpressway, Aranca Research
Yamuna Expressway is a 165-km, 6-lane, controlled-access expressway stretching between Greater Noida and Agra
It is India’s longest controlled-access expressway, developed by Jaypee Group under Public Private Partnership (BOT model) for a total value of
US$ 2.3 billion
The expressway became operational in August 2012
Salient Feature
Length - 165.5 kms
Number of Lanes - 6 lanes extendable to 8
Design speed - 120 kms per hour
Speed Limit - 100 kms per hour for cars, 60 kms per hour for heavy
vehicles
Main Toll Plazas - 4
Minor Bridges - 41
Yamuna Expressway
Infrastructure
KEY INDUSTRY
ORGANISATIONS
For updated information, please visit www.ibef.org Infrastructure 33
INDUSTRY ORGANISATIONS
National Highways Authority of India (NHAI)
Address: Rajiv Gandhi Bhawan, Safdarjung Airport,
New Delhi - 110003
Tel: 91-11-24632950
Address: G 5 and 6, Sector 10, Dwarka
New Delhi – 110 075
Phone: 91-11-25074100, 25074200
Fax: 91-11-25093507, 25093514
Airports Authority of India (AAI)
Infrastructure Industry And Logistics Federation of India (ILFI)
Address: P-95, South Extension Part – II
New Delhi - 110049
Phone: 91-11-41007091
Fax: 91-11-41007093
Email: [email protected], [email protected]
Website: www.ilfi.in
Infrastructure
USEFUL
INFORMATION
For updated information, please visit www.ibef.org Infrastructure 35
GLOSSARY
FY: Indian Financial Year (April to March) – So FY11 implies April 2010 to March 2011
US$ : US Dollar– Conversion rate used: US$ 1= INR54.43
FDI: Foreign Direct Investment
CAGR: Compounded Annual Growth Rate
GOI: Government of India
R&D: Research and Development
JV: Joint Venture
SEZ: Special Economic Zone
BOT: Build-Operate-Transfer
IBEF: Indian Brand Equity Foundation
NHAI: National Highways Authority of India
PPP: Public-Private-Partnership
Wherever applicable, numbers have been rounded off to the nearest whole number
For updated information, please visit www.ibef.org Infrastructure 36
EXCHANGE RATES
Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)
Year INR INR Equivalent of one US$
2004–05 44.81
2005–06 44.14
2006–07 45.14
2007–08 40.27
2008–09 46.14
2009–10 47.42
2010–11 45.62
2011–12 46.88
2012–13 54.31
2013–14 60.28
2014-15 61.06
2015-16 65.46
2016-17 67.09
Q1 2017-18 64.46
Q2 2017-18 64.29
Q3 2017-18 64.74
Year INR Equivalent of one US$
2005 43.98
2006 45.18
2007 41.34
2008 43.62
2009 48.42
2010 45.72
2011 46.85
2012 53.46
2013 58.44
2014 61.03
2015 64.15
2016 67.21
2017 65.12
Source: Reserve bank of India, Average for the year
For updated information, please visit www.ibef.org Infrastructure 37
DISCLAIMER
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation
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This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the
information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a
substitute for professional advice.
Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do
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