INDIA'S_INFRASTRUCTURE_ppt (1)

INDIA’S INFRASTRUCTURE

Made By:Rohan Aggarwal-639

MBE

INDIA GROWTH STORY India’s economic growth is attracting wide

attention

India & China are enjoying high economic growth

In 2009-10 India’s growth was 8%

Economic prosperity is placing huge demands on infrastructure

India is the third largest economy behind USA and China

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

Investment requirements

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

Liberalization of FDI Regulations

(a) Barring aviation, 100% FDI under the automatic route is now permitted in all infrastructure sectors.

(b) FDI under the automatic route is permitted up to 49% - 100% for various services in the aviation sector.

Extended tax holiday periods A ten year tax holiday is available to enterprises engaged in the

business of development, operation and maintenance of infrastructure facilities, subject to compliance with the conditions prescribed therein.

Introduction of Public Private Partnerships (PPP) Government has introduced the concept of public-private

partnerships in India, to combine the best practices of public and private sectors to efficiently develop and maintain infrastructure facilities

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

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

PPP

Components of Infrastructure Sector in India

Electricity Water Supply Telecom Roads Industrial parks Railways Ports Airports Storage

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

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%

Passenger Volumes

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

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)

ROADS (NHAI)

ROADS (NHAI)

ROADS (NHAI BONDS)

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

Telecommunications

India’s telecommunications network is the third largest in the world with more than 500 million subscribers

Wireless services have been growing at an impressive CAGR of over 87% per annum since 2003

The investment opportunity in areas such as network infrastructure, value added services sector etc. is estimated at US$ 76 billion

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

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

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

POWER SECTOR

Comparative Per Capita Consumption Of Electricity (Kwh)

STRENGHTS AND OPPORTUNITIES OF POWER SECTOR:

Well established and vast transmission and distribution network.

Highly qualified engineering and technical personnel.

Regulatory framework is further facilitated with enactment of Electricity Bill, 2003.

Emergence of strong and globally comparable central utilities (NTPC, POWERGRID).

India has substantial non-conventional energy resource base and technologies to meet growing power requirements by tapping this energy.

WEAKNESSES AND THREATS TO POWER SECTOR:

Poor infrastructure Old and poor transmission and distribution network Lack of proper metering and theft has led to large scale losses. Cheap electricity at subsidized rates Non-availability of quality coal Inability of SEBs to raise funds

PORTERs 5 Force Analysis

NTPC -Strategy The initial and overriding aim of the company is to consolidate its

position as India’s leading thermal power generator, while establishing a growing presence in the hydropower segment. The group also wishes to develop a network of international power generation assets and businesses. It wishes to diversify across the Indian power chain, including trading and transmission/distribution, as well as coal mining.

By 2017, the power generation portfolio is expected to have a diversified fuel mix with coal based capacity of around 53GW, 10GW through gas, 9GW through hydro generation, about 2GW from nuclear sources and around 1GW from Renewable Energy Sources (RES). NTPC has adopted a multi-pronged growth strategy which includes capacity addition through green field projects, expansion of existing stations, JVs, subsidiaries and takeover of stations.

Company Monitor-NTPC

StrengthsWeaknesses

OpportunitiesThreats

SWOT of ROADS & NETWORKStrengths India has one of the largest road networks in the world. Country's

total road length was 30, 15,299 km. More roads are being added Trains like Palace on Wheels provide a feel of Indian majesty of the

days gone by.Deccan odyssey, Heritage on wheel, Taj trains offer unique Rail experience.

Weaknesses The road condition in India is very bad. The roller coaster ride is not what is expected while travelling by the

tourists. Heavy road taxes.

SWOT of ROADS & NETWORKOpportunities As the tourism industry expands the airline industry is

also in for a boom. The smaller places that cannot be accessed by the air,

road, railways are the next best options.

Threats There are no major threats to this industry as there is

no substitute at present. Airlines are the only threat, which will take time to develop to come up to have such extensive distribution as rail or roadways

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

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