Istanbul Conference 2014-November25-27

Gammon India Ltd

Reconnecting Afghanistan

Istanbul November 26th 2014Pankaj Tandon

2009-10 2010-11 2011-12 2012-13 2013-14 (9 months)

45.34 55.58 55.33 51.9731.87

71.4388.97 83.30 75.86

49.32

Turnover (in INR Billion)

2009-10 2010-11 2011-12 2012-13 2013-14(9 months)

756926 922 866

531

1190

1483 13881264

822

Turnover (in US$ Mn)

Financials

Peace….The pre requisite ..

Business is from the heart

Safety: Which place is this ?

Business prospers amidst confidence and trust

Infrastructure: Which place is this ?

Infrastructure is the enabler and is also result of good Business

Exposure to new ideas :Is this Kabul…?

Openness allows critical evaluation of choices Do we know where did first Marks and Spencer showroom

opened in Central Asia…

Ease of movement ….Is it Kandahar …?

Safety is reality and perception as well

World Class:…Yes….!!

It is the same country and the same people….And

Not so colorful data Ease of doing Business…189 Countries • 1st –Singapore 183rd -Afghanistan Starting a Business -24th Paying Taxes -79th Getting Credit -89th Getting Electricity -141st Registering Property -183rd Enforcing Contracts -183rd Trading across borders -184th Perception improvement is important 85% women population yet to have formal education Life expectancy of women is 51 years

Trading across borders: Cross section study –Rank 184th Export Import

Days Cost -USD

Days Cost-USD

Documents preparation 44 570 49 680

Customs Clearance 8 300 7 300

Ports and Internal Handling 4 175 5 200

Inland Transportation and Handling

30 4,000 30 4,500

Cumulative 86 5,045 91 5,680

Turkey-It is 13 days for Export and 14 days for Import at a corresponding cost of USD 990 AND 1235 respectively

Business Needs in Afghanistan• Import/Export Challenges–Manpower Issues• Difficult to attract suitable talents –Incentivizing skill

development

– Land Locked Country • Material to come through Iran or Pakistan • Delay in Delivery – Documentation at various ports-IT enabled customs

clearance for speed and transparency

– Security • Bringing material from border to the destination places have

a greater risk of transit losses • Use of /GPS /RFID on shipments

Business Needs in Afghanistan

• Import/Export Challenges– Financial Transaction• Limitations in banking capacity– High Value BGs are difficult to be issued locally

• Limits on Banks to keep foreign Currency Accounts• High Transactions Cost of LC/BG• Low Currency Acceptance – Apprehension in taking payment in Afghani

International Business community has the responsibility to create Trust and credibility

International business community to invest in Skill, Talent and Technology

Business Needs in Afghanistan• Customs– Capacity Development• Duty on Duty (Duty deducted on DDP price rather than

CIF prices)• Comprehensive Training and up to date international

exposure

– Infrastructure development • Improvement of IT infrastructure – Remote operations to be enabled with higher use of

technology-Supply Chain, Logistics and Project Monitoring

Business Needs in Afghanistan: As experienced • Visa, Business License and Permits– Visa • Minimum 15-20 days for the whole process• Delay the man movement and hence impact the

business interest• Business and Investment may be allowed long term

multiple entry from the Embassy itself

Business Needs in Afghanistan

– General Apprehension about the business/security environment• Communication and brand building of “Afghanistan”

– Funding • A large proportion still dependent on external agencies• Manufacturing /Processing must be incentivized with Insurance and

Assurance

– Infrastructure• Non Reliable Power supply• Lack of Medical and Education Facilities • Road Infrastructure more to be done

– Volatile Policy framework• Change in the banking regulations recently making foreign banks to

close their office in the country (PNB Closed its office in Afghanistan)

Strong and self sufficient Afghanistan….

A Proud and Victorious Afghanistan..

Projects of Gammon…

Chennai Metro Rail Project

INR. 19.90 Bn / US$ 332 Mn

AIIMS- Digha elevated road

INR. 7.17 Bn / US$ 120 Mn

Nathani Heights Mumbai

INR. 3.46 Bn / US$ 57 Mn

Bajoli Holi HEP

INR. 8.3 Bn / US$ 138 Mn

Mayapur ISKCON temple

INR. 1.37 Bn / US$ 23 Mn

Godavari Bridge

INR. 7 Bn / US$ 116 Mn

MbPT Offshore Container TerminalINR. 5.5 Bn / US$ 92 Mn

Signature Bridge

INR 6.32 Bn/ US$ 105 Mn

THANK YOU

“Micro competitiveness”….Examples of Bangladesh

Focus on few sectors to build economy around it…..

Fruit and Food processing

Mining

Credits….World Bank sites, Web-search and my colleagues