Infrastructure October Report - IBEF

INFRASTRUCTURE
For updated information, please visit www.ibef.org October 2017

Table of Content
Executive Summary...3
Advantage India.... 4
Market Overview and Trends....6
Porters Five Forces Framework..16
Strategies adopted....17
Growth Drivers and Opportunities......21
Case studies.........28
Industry Organisations......32
Useful Information............34
2 Infrastructure For updated information, please visit www.ibef.org

EXECUTIVE SUMMARY
High budgetary
In the Union Budget 2017-18, the Government of India has given a massive push to the infrastructure sector
allocation for
by allocating US$ 61.92 billion for the sector.
infrastructure
The infrastructure sector in India witnessed 33 deals in FY2016-17 involving US$ 3.49 billion as against
Rising infrastructure US$ 2.98 billion raised across 31 deals in FY2015-16, with the majority of deals led by the power, roads and
deals 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.
Increasing private Private sector is emerging as a key player across various infrastructure segments, ranging from roads and
sector involvement communications to power and airports
In 2016, India jumped 19 places in World Bank's Logistics Performance Index (LPI) 2016, to rank 35th
Improvement in logistics
amongst 160 countries.
Rising foreign direct FDI received in Construction Development sector (townships, housing, built up infrastructure and
investment (FDI) in the construction development projects) from April 2000 to June 2017 stood at US$ 24.54 billion ; and in
sector Construction (Infrastructure) activities stood at US$ 9.82 billion.
Source: Media sources, DIPP, Aranca Research

Infrastructure
ADVANTAGE INDIA
ADVANTAGE INDIA
India has a requirement of investment worth US$ 646 billion in Favourable valuation and earnings outlook makes this sector
the infrastructure sector by 2022; 70 per cent of which will be an attractive opportunity.
required in the power, roads and urban infrastructure sectors. 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.
ADVANTAGE
INDIA
Increasing impetus to develop With initiatives like Housing for All and
infrastructure in the country is attracting Smart Cities Mission the Government of
the major global players like China Harbour India is working on reducing bottlenecks
Engineering and Mizuho Financial Group. and impeding growth in the infrastructure
Construction Development sector and sector.
Infrastructure activities sector received FDI With the UDAY Scheme, that will help in financial
inflows amounting to US$ 24.54 billion and turnaround and revival of electricity distribution
US$ 9.82 billion, respectively from April 2000 to June 2017. companies of India, the power sector has been
registering strong growth.
100 per cent FDI is permitted under the automatic across
various infrastructure sectors.
Note: UDAY Ujwal Discom Assurance Yojana

Source: Media Sources, DIPP, Aranca Research, PricewaterhouseCoopers

Infrastructure
MARKET OVERVIEW
AND TRENDS
INCREASING FDI INFLOWS INTO THE SECTOR
Cumulative FDI inflows in the Construction Activities sector, which Cumulative FDI inflows between April 2000-June 2017
Visakhapatnam port traffic (million tonnes)
includes infrastructure, reached US$ 10.26 billion between April (US$ billion)
2000 June 2017.
30
Cumulative FDI inflows in the Construction Development sector,
which includes townships, built-up infrastructure and construction-
25
development projects, reached US$ 24.54 billion between April 2000
24.54
24.29
24.18
24.06
June 2017.
23.3
22.08
20
UAE-based firm, DP World, having previously invested US$ 1 billion
in India, is planning to invest another US$ 1 billion in India's
infrastructure sector along with logistics and container terminals 15
Squared Capital, a global infrastructure investment company, plans

to raise up to US$ 4 billion through its second infrastructure fund, 10
10.26
9.82
which will be invested in infrastructure assets in India and across the
7.96
globe.
2.58
5
2.09
3.43
0
FY13
FY14
FY15
FY16
FY17
Q1 FY18
Construction activities (includes infrastructure)
Construction Development: Townships, housing, built-up

infrastructure and construction-development projects
Note: FDI Foreign Direct Investment

Source: DIPP, Media sources, Aranca research

SUMMARY OF INFRASTRUCTURE PROJECTS
COMPLETED DURING THE 12TH FIVE YEAR PLAN
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
Source: Ministry of Statistics and Programme Implementation (MoSPI)

RECENT PPP PROJECTS IN INFRASTRUCTURE
Project Project Project Cost Period

Project Signing Date Location
Authority Concessionaire Name (US$) (months)
Six laning of Handia- Uttar

Varanasi section in length G R Infraprojects 31-Mar-2017 387.37 million 180
Limited Pradesh
of 72.4 km NHAI
Six laning of Chitradurga-

Davanagere section in NHAI PNC Infratech Limited 31-Mar-2017 224.26 million Karnataka 180
length of 72.7 km
Four laning of Singhara- NHAI

Binjabahal section in Montecarlo Limited 29-Mar-2017 222.07 million Odisha 180
length of 104.1 km
Four laning of Jhansi- Multi State/

NHAI PNC Infratech Limited Centre
Khajuraho section in 28-Mar-2017 220.51 million 180
length of 76.3 km
Four laning of Waranga-

Mahagaon section in NHAI Sadbhav Engineering 28-Mar-2017 166.90 million Maharashtra 180
length of 66.9 km Limited
Four/six laning of Bodare- Sunil Hi-Tech Andhra

NHAI 23-Mar-2017 199.16 million 180
Dhule section in length of Engineers Private Pradesh
62.8 km under NHDP-IV Limited
Six laning of NH-8 in

length of 93.2 k m of NHAI Sabarkantha Annuity 25-Jan-2017 201.74 million Gujarat 180
Shamlaji-Chiloda section Private Limited
Note: NHAI : National Highway Authority of India

Source: infrastructureIndia.gov.in, Aranca Research

STRONG MOMENTUM IN EXPANSION OF ROADWAYS
Value of total roads and bridges infrastructure in India is estimated to Roads/Visakhapatnam

bridges infrastructure
port traffic
value(million
in India
tonnes)
(US$ billion)
have expanded at a CAGR of 13.6 per cent over FY0917 to US$
19.2 billion CAGR 13.6%
20
In April 2017, the National Highways and Infrastructure Development
19.20
Corp. bagged a project to build 5 tunnels worth US$ 3.42 billion. 18
These tunnels, namely, Zojila tunnel at Zojila Pass (14 kms), Vailoo
Tunnel at Sinthan Pass (8-10 kms), Z-Morah tunnel (6.5 kms), Pir-Ki- 16
16.10
Gali Tunnel on National Highway-244 (8.5 kms) and Daranga Tunnel
14
at Shudh Mahadev (4.5 kms), will help in avoiding road accidents
13.4
because of avalanches
12
An outlay of Rs 6.92 trillion (US$ 107.64 billion) was approved by the
11
Government of India in October 2017 to build a road network of 10
83,677 km over the next five years. The outlay includes the
8
8.6
8.6
Bharatmala projects worth Rs 5.35 trillion (83.25 billion).
8.3
6.9
In January 2017, the government proposed to lay down cycle tracks
6.8
6
on all highways and major roads pan India, to promote the use of
electric cars and public transport. 4
Highway network in the country is expected to cover 50,0000 km by 2

2019. The National Highway Authority of India has created a new
highway operations division to focus on all non-commercial highway 0
2015E
2016F
2017F
2009
2010
2011
2012
2013
2014
operational activities like electronic toll collection, road safety,
incident management, and other modern amenities .
Note: CAGR - Compounded Annual Growth Rate, FY - Indian Financial Year (April - March), F - Forecast, NHDP - National Highway Development Project, SARDP-NE: Special Accelerated
Road Development Programme for the North Eastern Region and LWE - Left Wing Extremism Programme; Figures are as per latest data available
Source: Business Monitor International (BMI), Ministry of External Affairs, Aranca Research

STRONG REVENUE GROWTH FOR INDIAN RAILWAYS
Revenue growth has been strong over the years; during FY0717, Gross
Visakhapatnam
revenue trends
port
over
traffic
the(million
years (US$
tonnes)
billion)
revenues increased at a CAGR of 11 per cent to US$ 24.60 billion in
FY17. CAGR 11%
30.00
Revenues from the sector are estimated to reach to US$ 44.5 billion
by the end of FY20
The Ministry of Railways is working on a plan to earn Rs 15,000 25.00
24.60
24.49
crore (US$ 1.56 billion) over the next 10-20 years through a rail
display network (RDN), enabling real-time information to
21.66
20.00
passengers.
19.09
Indian Railway sector aims to boost passenger amenities
17.11
15.00
In March 2017, Railways started a new segment of revenue
14.31
generation channel through auctioning for advertising and branding
12.88
contracts on 1000 trains. The front running brands are to sign this
11.97
10.00
10.97
contract for 5 years.
9.87
8.68
5.00
0.00
2010-11
2006-07
2007-08
2008-09
2009-10
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
Note: CAGR Compound Annual Growth Rate, E Estimates, FY Indian Financial Year (AprilMarch)
Source: Vision 2020, Ministry of Railways, Aranca Research

POWER GENERATION CAPACITY HAS INCREASED AT
A HEALTHY PACE
Installed capacity increased steadily over the years, posting a CAGR Installed
Visakhapatnam
electricity
port
generation
traffic (million
capacity
tonnes)
(GW)
of 10.57 per cent in FY0917 and stood at 326.84 (GW) by the end
of FY17. CAGR 10.57%
As of September 2017, India had a power generation capacity of 350
329.3 GW.
326.8
As of June 2017, energy generation from conventional sources stood 300
at 307.7 billion units (BU).
280.3
272.5
Indian energy sector is expected to offer investment opportunities 250
worth US$ 300 billion over the next 10 years.
237.7
223.3
200
199.9
173.6
150
159.4
148
143.1
132.3
100
50
0
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
Note: GW - Gigawatt, CAGR - Compound Annual Growth Rate; FY18* - data upto June 2017
Source: CEA (Central Electricity Authority), Aranca Research

PERFORMANCE OF EIGHT CORE INFRASTRUCTURE
INDUSTRIES
The eight core infrastructure industries include coal, crude oil, natural Index of eight core Industries
gas, refinery products, fertilisers, steel, cement and electricity.
The overall index grew by 4.8 per cent during FY 2016-17. 180
The growth in the index was led by electricity (10 per cent), steel (9
160
per cent), refinery products (8.9 per cent), cement (5.8 per cent) and
153.3
fertilisers (3.3 per cent). 140
141.6
137.2
The cumulative growth of the index between April-August 2017 was
133.1
120
122.5
122
121.8
120.4
3 per cent.
119.7
100
106.6
The growth in the index was lead by steel (6.2 per cent), electricity
104.4
103.5
95.2
94.5
(4.9 per cent), natural gas (4.3 per cent), refinery products (1.8 per 80
cent) and crude oil (0.2 per cent).
68.8
60
66.5
40
20
Cement
Coal
Natural Gas
Fertilisers
Crude Oil
Steel
Products
Electricity
Refinery
2016-17 April'17 - Aug'17
Source: Ministry of Commerce and Industry

GROWTH IN INFRASTRUCTURE RELATED ACTIVITIES
Infrastructure related activities witnessed strong growth between Growth in infrastructure related activities between
April-September 2016. April-September 2016
12
The activities that registered the highest growth include export cargo
(10 per cent), highway construction/widening (9.8 per cent), power
10
generation (6.6 per cent), import cargo (5.8 per cent) and cargo at
10.0
9.8
major ports (5.3 per cent). 8
6.6
5.8
5.3
4
1.8
0
-2
-3.9
-4
-6
major ports
Generation
Rail freight
construction/
earnings
Import cargo
Export cargo
Railway
Cargo at
widening
Highway
Power
traffic
Source: Economic Survey 2017

KEY PRIVATE PLAYERS
Major projects: MumbaiPune BOT Project, PuneNashik BOT Project, BharuchSurat BOT Project,
ThaneBhiwandi by-pass 4 Lane Project, Thane Ghodbunder BOT Project, AhmedabadBaroda 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: BandraWorli 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, Sikkims 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

Porters Five Force Framework Analysis
Threat of Substitutes
Low Threat is low as there arent

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.
Bargaining Power of Suppliers Competitive Rivalry Bargaining Power of Buyers
Low Bargaining power of suppliers is Medium In the past, competition in this High Buyer here is the Government;
low as the order quantity by buyers is in sector was high in terms of bidding for therefore there is high bargaining power,
bulk. Government projects. as it is the Government that makes the
final decision about whom the tender for
However, in the more recent years,
a project goes to.
bidding has rationalised and the
competition between players has become
stable.
Threat of New Entrants
Low - Threat is low due to the capital-

intensive nature of the industry; all the
Positive Impact capable players have already entered in
Neutral Impact the sector. Also, there arent much
foreign players involved in infrastructure
Negative Impact projects in India.
Source: Aranca Research

Infrastructure
STRATEGIES
ADOPTED
STRATEGIES
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
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.
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.
Source: Company websites, Media sources, Aranca research

Infrastructure
GROWTH DRIVERS
AND OPPORTUNITIES
GROWTH DRIVERS FOR INFRASTRUCTURE IN INDIA
Government Public Private

Initiatives Partnerships
Growth Drivers
International
Infrastructure
Investment
Needs
Housing Development

GOVERNMENT INITIATIVES DRIVING GROWTH IN THE
SECTOR
For 2017-18, the total capital and development expenditure Budget allocation for road sector increased to US$ 10.07
of Railways has been pegged at US$ 20.33 billion. billion in 2017-18 from US$ 8.99 billion in 2016-17.
As per 2017-18 Budget, railway lines of 3,500 kms will be 2,000 kms of coastal connectivity roads have been identified
commissioned in FY18. for construction and development .
Government expressed plans to announce a Select airports in Tier 2 cities will be taken up
new Metro Policy by FY18. for operation and maintenance in the PPP
mode in the coming years.
A new Metro Rail Act will be enacted by
rationalising the existing laws. Road projects worth Rs 6.92 trillion (US$
Total allocation for 107.64 billion) approved in October 2017.
infrastructure in
Budget of 2017-18
stands at US$ 61.48
In 2017, government announced plans billion. By the end of 2017-18, high speed
to facilitate higher investment in broadband connectivity on optical fibre
affordable housing. will be available in more than 1,50,000
gram panchayats.
The National Housing Bank will refinance
individual housing loans of about US$ 3.1 In the second phase of Strategic Crude Oil
billion in 2017-18. reserves, reserve capacity will be increased to
15.33 MT.
The National Steel Policy 2017 aims at higher spending on
infrastructure and construction through government In the second phase of Solar Park Development an
initiatives. additional capacity of 20,000 MW will be generated.
Source: Union Budget 2017-18, Media sources, Aranca research

AFFORDABLE HOUSING
In Budget 2017-18, affordable housing was given infrastructure Trend

Visakhapatnam
in affordability
port traffic
of a US$
(million
45,000tonnes)
house
status.
45%
As of June 2017, about 69 percent of the countrys 1.3 billion people
were in prime house-buying age -- 20 to 40 years, more than any
40%
than any other nation.
39%
Per capita income has grown at a compound annual growth rate of 35%
36%
10 percent for the past five years.
34%
34%
33%
32%
Prime Minister Narendra Modi broadened reforms in FY17 to foster 30%
30%
30%
construction and home buying under his Housing for All
27%
programme, launched in June 2015. That aims to build 20 million 25%
26%
urban homes and 30 million rural houses by 2022. Property has also
22%
become the most affordable in two decades. 20%
Approximately, 60 million new homes are expected to be built in

15%
India between 2018 and 2024 with social and affordable housing
rising almost 70 percent to 10.5 million by 2024, exceeding the 33
10%
percent increase in the premium market.
5%
0%
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Source: Bloomberg, Economic Times

INFRASTRUCTURE DEVELOPMENT IN NORTHEAST
INDIA
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 Chinas ambitious One Belt One Road ( Obor).
Government announced plans to invest US$ 6.98 billion in Northeast States.
The North East-Agra transmission line, which is the biggest power transmission line to be built in the country in terms of capacity, is to be
inaugurated by the end of 2017. This means that cheap power from the hydro-rich North-East can now reach the central part of North India.
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 Indias 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 Indias 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.
Source: Budget, Economic Times, Media sources, Aranca research

AIRPORTS INFRASTRUCTURE INVESTMENT
The AAI 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.
Metro airports 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 airports phase 1 with annual handling capacity of 10 million
passengers each year rephrasing it from the origin
The AAI plans to spend US$ 1.3 billion on non-metro projects over the 5 years (201317); mainly focusing on
the modernisation and upgradation of airports; New airports at Itanagar, Kohima and Gangtok are also
planned.
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
Non-metro airports 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
The AAI plans to develop Guwahati as an inter-regional hub and Agartala, Imphal and Dibrugarh as intra-
regional hubs
Source: Media sources, Aranca research

METRO RAIL AND MONORAIL INFRASTRUCTURE
INVESTMENT
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
Metro Rail
increase after another 140 km addition of lines in 2016.
In FY18, a new Metro Rail Policy will be announced with focus on innovative models of implementation and
financing, as well as standardisation and indigenisation of hardware and software.
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
Monorail 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.

KEY HIGHLIGHTS OF UNION BUDGET 2017-18
Affordable housing has been given infrastructure status.
National Housing Bank will refinance individual housing loans of about US$ 3.1 billion in 2017-18.
For transportation sector as a whole, including rail, roads, shipping provision of US$ 37.46 billion has been made in 2017-18.
For 2017-18, the total capital and development expenditure of Railways has been pegged at US$ 20.33 billion. This includes US$ 8.53 billion
provided by the Government.
Railway lines of 3,500 kms will be commissioned in 2017-18. During 2017-18, at least 25 stations are expected to be awarded for station
redevelopment.
500 stations will be made differently abled friendly by providing lifts and escalators. It is proposed to feed about 7,000 stations with solar power in
the medium term.
Budget allocation for road sector increased to US$ 10.07 billion in 2017-18 from US$ 8.99 billion in 2016-17.
Total length of roads, including those under PMGSY, built from 2014-15 till the current year is about 140,000 kms which is significantly higher
than previous three years. The Government has identified 2,000 kms of coastal connectivity roads for construction and development.
Select airports in Tier 2 cities will be taken up for operation and maintenance in the PPP mode.
By the end of 2017-18, high speed broadband connectivity on optical fibre will be available in more than 1,50,000 gram panchayats, under
BharatNet. A DigiGaon initiative will be launched to provide tele-medicine, education and skills through digital technology.
A provision of US$ 115.62 million has been made for in incentive schemes like M-SIPS and EDF in order to create an eco-system which will
make India a global hub for electronics manufacturing.
A new and restructured Central scheme with a focus on export infrastructure, namely, Trade Infrastructure for Export Scheme (TIES) will be
launched in 2017-18.
Note: PMGSY Pradhan Mantri Gram Sadak Yojana

Source: Union Budget 2017-18

OPPORTUNITIES IN INFRASTRUCTURE
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$115.62 million in 2017-18 in incentive schemes like M-SIPS and EDF.
Government Initiatives
Introduction of National Steel Policy in 2017 to aim at higher spending on infrastructure and construction
through government initiatives.
Total allocation for infrastructure in Budget of 2017-18 stands at US$ 61.48 billion.
Japanese investment has played significant role in Indias growth story. Japan has pledged investments of
around US$35 billion for the period of 2014-19 to boost Indias manufacturing and infrastructure sectors.
International
The Japanese government is constantly looking for investment opportunities in India.
Associations
Asian Development Bank will provide US$ 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.
Urban Indian Real This has the potential for catapulting India to 3rd largest construction market globally. The sector is expected
Estate to contribute 15 per cent to the Indian economy by 2030, become the largest employer by 2022 employing
about 75 million people or more than 13 per cent of the total estimated workforce of India, remain the largest
contributor to the state exchequer and will consume almost a quarter of Indias total electricity need 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.

Infrastructure
CASE STUDIES
L&T INFRASTRUCTURE DEVELOPMENT PROJECTS
LIMITED (L&T IDPL)(1/2)
L&T IDPL is the pioneer of the Public-Private-Partnership (PPP) Revenue (US$ million)
model in India.
600
It is a subsidiary of the Larsen and Toubro group and was set up in
1995.
The company has implemented major infrastructure projects across 500

roads, bridges, ports, airports water supply, hydel energy, metro
489.33
railway and urban infrastructure.
The companys revenue has increased from US$ 9.12 million in FY 400
396.45
2010-11 to US$ 396.45 million in FY 2015-16.
300
200
208.67
100
16.67
16.12
9.12
0
FY11
FY12
FY13
FY14
FY15
FY16
Source: Company website

L&T INFRASTRUCTURE DEVELOPMENT PROJECTS
LIMITED (L&T IDPL) (2/2)
1995-2005 2006-2009 2010-2011 2012-2013 2014-2016
Coimbatore Bypass Jadcherla-Kothakota Gandhidham- Jalgaon to Canada Pension Plan

Project Road Project Samakhiali road Maharashtra-Gujarat Investment Board
project border (Maharashtra) invests in L&T IDPL
Narmada Bridge Palanpur-
Road Project
Project Swaroopganj Road Krishnagiri-Walajapet Sambalpur Rourkela
road project Rajkot Jamnagar Road project
Jaipur-Kishangarh Krishnagiri-Thopur
Vadinar Road Project
Expressway Project Toll Road Project Devihalli-Hassan road Kudgi Power
project Halol Godhra Transmission Line
Second Vivekananda Vadodara-Bharuch
Shamlaji Road Project project
Bridge Project in West Tollway Project Hyderabad Metro
Bengal project Pimpalgaon Nashik L&T IDPL completes
Chennai-Tada toll
Gonde road project development of the
Bangalore road project Kacchigarh Port
India's first all women longest four-lane road
International Airport Project
Pimpalgaon - Nashik - toll plaza project under the
Panipat Elevated Gonde road project Beawar-Pali-Pindwara Public Private
Corridor Project Road project Partnership (PPP)
Dharma Port Project
Sangareddy model
Karnataka /
Maharashtra border
Road Project
Source: Company website

YAMUNA EXPRESSWAY A PPP SUCCESS STORY
Yamuna Expressway is a 165-km, 6-lane, controlled-access expressway stretching between Greater Noida and Agra
It is Indias 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
Yamuna Expressway
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
Source: Jaypee, Yamunaexpressway, Aranca Research

Infrastructure
KEY INDUSTRY
ORGANISATIONS
INDUSTRY ORGANISATIONS
National Highways Authority of India (NHAI) Airports Authority of India (AAI)
Address: G 5 and 6, Sector 10, Dwarka Address: Rajiv Gandhi Bhawan, Safdarjung Airport,
New Delhi 110 075 New Delhi - 110003
Phone: 91-11-25074100, 25074200 Tel: 91-11-24632950
Fax: 91-11-25093507, 25093514
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: dgoffice@ilfi.in, ilfi@ilfi.in
Website: www.ilfi.in

Infrastructure
USEFUL
INFORMATION
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

EXCHANGE RATES
Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)
Year INR Equivalent of one US$ Year INR Equivalent of one US$
200405 44.81 2005 43.98

200506 44.14
2006 45.18
200607 45.14
2007 41.34
200708 40.27
2008 43.62
200809 46.14
2009 48.42
200910 47.42
201011 45.62 2010 45.72
201112 46.88 2011 46.85
201213 54.31 2012 53.46

201314 60.28
2013 58.44
2014-15 61.06
2014 61.03
2015-16 65.46
2015 64.15
2016-17 67.09
2016 67.21
Q1 2017-18 64.46
Q2 2017-18 64.29 H1 2017 65.73
Source: Reserve bank of India, Average for the year

DISCLAIMER
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation
with IBEF.
All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced,
wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or
incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval
of IBEF.
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 IBEFs 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
they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation.
Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any
reliance placed or guidance taken from any portion of this presentation.

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Infrastructure October Report - IBEF

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INFRASTRUCTURE

For updated information, please visit www.ibef.org October 2017

Market Overview and Trends....6

Porters Five Forces Framework..16

Growth Drivers and Opportunities......21

2 Infrastructure For updated information, please visit www.ibef.org

Source: Media sources, DIPP, Aranca Research

3 Infrastructure For updated information, please visit www.ibef.org

Note: UDAY Ujwal Discom Assurance Yojana

5 Infrastructure For updated information, please visit www.ibef.org

Squared Capital, a global infrastructure investment company, plans

Construction Development: Townships, housing, built-up

Note: FDI Foreign Direct Investment

7 Infrastructure For updated information, please visit www.ibef.org

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

Source: Ministry of Statistics and Programme Implementation (MoSPI)

8 Infrastructure For updated information, please visit www.ibef.org

Project Project Project Cost Period

Six laning of Handia- Uttar

Six laning of Chitradurga-

Four laning of Singhara- NHAI

Four laning of Jhansi- Multi State/

Four laning of Waranga-

Four/six laning of Bodare- Sunil Hi-Tech Andhra

Six laning of NH-8 in

Note: NHAI : National Highway Authority of India

9 Infrastructure For updated information, please visit www.ibef.org

Value of total roads and bridges infrastructure in India is estimated to Roads/Visakhapatnam

Highway network in the country is expected to cover 50,0000 km by 2

10 Infrastructure For updated information, please visit www.ibef.org

The Ministry of Railways is working on a plan to earn Rs 15,000 25.00

11 Infrastructure For updated information, please visit www.ibef.org

12 Infrastructure For updated information, please visit www.ibef.org

Source: Ministry of Commerce and Industry

13 Infrastructure For updated information, please visit www.ibef.org

14 Infrastructure For updated information, please visit www.ibef.org

Source: Company websites, Aranca Research

15 Infrastructure For updated information, please visit www.ibef.org

Low Threat is low as there arent

Bargaining Power of Suppliers Competitive Rivalry Bargaining Power of Buyers

Threat of New Entrants

Low - Threat is low due to the capital-

Source: Aranca Research

16 Infrastructure For updated information, please visit www.ibef.org

Source: Company websites, Media sources, Aranca research

18 Infrastructure For updated information, please visit www.ibef.org

Government Public Private

20 Infrastructure For updated information, please visit www.ibef.org

Source: Union Budget 2017-18, Media sources, Aranca research

21 Infrastructure For updated information, please visit www.ibef.org

In Budget 2017-18, affordable housing was given infrastructure Trend