India will see $51 billion of infrastructure investments
over the next three year in 2004-06, a 44-per cent surge
over the preceding three-year period.
a report issued by ICICI Securities on Indian infrastructure,
"after six years of policy fine-tuning, India is
poised at an inflection point in developing infrastructure."
It is expected that there will be more private and foreign
capital flowing into infrastructure projects in the country.
soft interest rate regime and several legislative issued
addressed various infrastructure projects like roads,
power and port will attract huge invests in the coming
days. It said that 43 per cent of the spend pie will accrue
to the power sector and 20 per cent for roads with a consequent
multiplier effect on the economy, the report said.
tenders for NESW corridor highways, several ports, and
at least two airports will also be issued during this
period. Already there is momentum in highways, ports and
power generation, where a successful track record has
fostered a virtuous cycle of more success, it said.
transmission and oil and gas have emerged as swing sectors
due to an emerging clarity in public-private models and
regulatory framework for transmission and distribution
of power, pipelines and refinery modernisation.
investments in telecom could plateau after the phase of
aggressive rollouts, the report said. "There is convergence
of public policy and political view that the way ahead
is by development of better infrastructure that can facilitate
and propel growth."
finance has been gathering pace but it accounts for less
than a third of the total bond issuance and just 6.5 per
cent of the bank credit to industry. Some of the companies
that are going to benefit are ABB, BHEL, Gujarat Ambuja
order to attract private and foreign capital, business
models for infrastructure projects need to be more market-oriented
and based on commercial principles, the report pointed
out. "For every Dabhol project which suffered, there
are early stage success stories such as Delhi's power
privatisation, Noida Toll Bridge, Konkan Railway and the
JNPT P&O container terminal."
leading domestic and private and public sector companies
like Reliance, the Tatas, NTPC, Power Grid and IOC are
coming into the sector in a big way. The main issue dogging
infrastructure projects in India has been the pricing
framework, as most of these services have an element of
direct subsidy or cross-subsidy built in the tariff structure.
setting up of the Rs 61-billion Central Road Fund (CRF),
incentives in the form of tax breaks, permission for 100-per
cent foreign direct investment and three innovative financing
methods (BOT, Annuity and SPV) should ensure that the
road sector will progress.
the linking of national highway projects with state highways
and rural roads are also being addressed simultaneously
by most state governments. This augurs well for eventually
moving to a synchronised tolling structure from the present
practice of segmental tolling.