INFRASTRUCTURE

For updated information, please visit www.ibef.org February 2018

 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 2018-19, the Government of India has given a massive push to the infrastructure sector
allocation for
by allocating Rs 5.97 lakh crore (US$ 92.22 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
investment (FDI) in the and construction development projects) from April 2000 to December 2017 stood at US$ 24.67 billion ; and
sector in Construction (Infrastructure) activities stood at US$ 12.36 billion.

Source: Media sources, DIPP, Aranca Research

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

 Infrastructure

ADVANTAGE INDIA
 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.
ADVANTAGE
INDIA
 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.
Note: UDAY – Ujwal Discom Assurance Yojana
Source: Media Sources, DIPP, Aranca Research, PricewaterhouseCoopers
5 Infrastructure
 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.
 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.
For updated information, please visit www.ibef.org
 Infrastructure

MARKET OVERVIEW
AND TRENDS
 INCREASING FDI INFLOWS INTO THE SECTOR

 Cumulative FDI inflows in the Construction Activities sector, which Visakhapatnam portfrom
traffic (million tonnes)
Cumulative FDI inflows April 2000 (US$ billion)
includes infrastructure, reached US$ 12.36 billion between April
2000 – December 2017.
30
 Cumulative FDI inflows in the Construction Development sector,
which includes townships, built-up infrastructure and
25
construction- development projects, reached US$ 24.67 billion

24.67
24.29
24.18
24.06
between April 2000 – December 2017.

23.3
22.08
20
 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, 15
transportation, and logistics businesses in India.

12.36
 Squared Capital, a global infrastructure investment company, plans 10

9.82
to raise up to US$ 4 billion through its second infrastructure fund,

7.96
which will be invested in infrastructure assets in India and across the

2.58
5

2.09
globe.

3.43
0

FY13

FY14

FY15

FY16

FY17

FY18*
Construction activities (includes infrastructure)

Construction Development: Townships, housing, built-up

infrastructure and construction-development projects

Note: FDI – Foreign Direct Investment, * up to December 2017

Source: DIPP, Media sources, Aranca research

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

 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)

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

 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

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

 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 FY09–17 to US$
19.2 billion CAGR 13.6%
20
 An outlay of Rs 6.92 trillion (US$ 107.64 billion) was approved by the

19.20
Government of India in October 2017 to build a road network of 18
83,677 km over the next five years. The outlay includes the
Bharatmala projects worth Rs 5.35 trillion (83.25 billion). 16

16.10
 In Union Budget 2018-19, Rs 71,000 crore (US$ 10.97 billion) was 14
allocated for national highways while Rs 19,000 crore (US$ 2.94

13.4
billion) was allocated to Pradhan Mantri Gram Sadak Yojana 12
(PMGSY) for development of roads in rural and backward areas of

11
the country. 10

 All villages in India will be connected through a road network by 2019 8

8.6

8.6
8.3
under Pradhan Mantri Gram Sadak Yojana (PMGSY).

6.9

6.8
6
 Highway network in the country is expected to cover 50,0000 km by
2019. The National Highway Authority of India has created a new 4
highway operations division to focus on all non-commercial highway
operational activities like electronic toll collection, road safety, 2
incident management, and other modern amenities.
0
 In December 2017, the National Highway Authority of India (NHAI)

2016F

2017F
2009

2010

2011

2012

2013

2014

2015E
created the National Highways Investment Promotion Cell (NHIPC)
to attract foreign and domestic investments towards highway projects
in India.
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

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

 STRONG REVENUE GROWTH FOR INDIAN RAILWAYS

 Revenue growth has been strong over the years; during FY07–17, 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. The sundry earnings of Indian Railways reached Rs 1,775.78 CAGR 11%
crore (US$ 276.21 million) till September 2017. 30.00

 Revenues from the sector are estimated to reach to US$ 44.5 billion
by the end of FY20. 25.00

24.60
24.49
 The Indian Railways received the highest ever budgetary allocation
under Union Budget 2018-19 at Rs 1.48 trillion (US$ 22.86 billion).

21.66
20.00
Out of this allocation, Rs 1.46 trillion (US$ 22.55 billion) is capital

19.09
expenditure that will be used for capacity creation and

17.11
redevelopment of 600 railway stations.
15.00
 The Ministry of Railways is working on a plan to earn Rs 15,000

14.31
12.88
crore (US$ 1.56 billion) over the next 10-20 years through a rail

11.97
display network (RDN), enabling real-time information to 10.00

10.97
9.87
passengers.

8.68
 Indian Railways will require investment of Rs 35.3 trillion (US$ 5.00
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. 0.00

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17
 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.

Note: CAGR – Compound Annual Growth Rate, E – Estimates, FY – Indian Financial Year (April–March)
Source: Vision 2020, Ministry of Railways, Aranca Research

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

 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 FY09–17 and stood at 326.84 (GW) by the end
of FY17. CAGR 10.57%
 As of January 2018, India had a power generation capacity of 334.4 400
GW.
350
 As of June 2017, energy generation from conventional sources stood
at 307.7 billion units (BU).

334.40
326.8
300
 Indian energy sector is expected to offer investment opportunities

280.3
worth US$ 300 billion over the next 10 years.

272.5
250
 Under Union Budget 2018-19 following allocations were made for the

237.7
223.3
power sector: 200

199.9
• Rs 16,000 crore (US$ 2.47 billion) for the Sahaj Bijli Har Ghar

173.6
Yojana (Saubhagya) for last mile connectivity to rural households 150

159.4
148
143.1
• Rs 3,800 crore (US$ 586.96 million) for Deendayal Upadhayaya

132.3
Gram Jyoti Yojna 100

• Rs 4,900 crore (US$ 756.87 million) for Integrated Power

50
Development Scheme (IPDS)

• Rs 4,200 crore (US$ 648.75 million) for capacity addition in wind 0

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18*
power, solar power and green energy corridor project

Note: GW - Gigawatt, CAGR - Compound Annual Growth Rate; FY18* - data upto January 2018
Source: CEA (Central Electricity Authority), Aranca Research

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

 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. 160
 The growth in the index was led by electricity (10 per cent), steel (9

149.6
140
per cent), refinery products (8.9 per cent), cement (5.8 per cent) and

141.6
139.1
133.1
fertilisers (3.3 per cent).
120

125.8
124

122
121.8

119.7
 The cumulative growth of the index between April-December 2017

113.2

107.2
was 4 per cent. 100

106.6
94.5
94.3
 The growth in the index was lead by steel (6.7 per cent), electricity
80
(4.9 per cent), natural gas (4.0 per cent) and refinery products (3.9
per cent).

69.1
60

66.5
40

20

Coal

Natural Gas

Fertilisers

Cement
Crude Oil

Steel
Products

Electricity
Refinery
2016-17 April'17 - Dec'17

Source: Ministry of Commerce and Industry

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

 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

Rail freight

major ports
earnings

Import cargo
Generation

construction/

Export cargo
Railway

Cargo at
widening
Highway
Power

traffic
Source: Economic Survey 2017

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

 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

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

 Porter’s Five Force Framework Analysis

Threat of Substitutes

 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.

Bargaining Power of Suppliers Competitive Rivalry Bargaining Power of Buyers

 Low – Bargaining power of suppliers is
low as the order quantity by buyers is in
bulk.
 Medium – In the past, competition in this  High – Buyer here is the Government;
sector was high in terms of bidding for therefore there is high bargaining power,
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 aren’t much
foreign players involved in infrastructure
Negative Impact projects in India.

Source: Aranca Research

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

 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. 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.

Source: Company websites, Media sources, Aranca research

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

 Infrastructure

GROWTH DRIVERS
AND OPPORTUNITIES
 GROWTH DRIVERS FOR INFRASTRUCTURE IN INDIA

Government Public Private

Initiatives Partnerships

Growth Drivers
International
Infrastructure
Investment
Needs

Housing Development

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

 GOVERNMENT INITIATIVES DRIVING GROWTH IN THE
SECTOR

 For 2018-19, the total capital expenditure of Railways will  Budget allocation for road sector increased to US$ 10.07
be Rs 1.46 trillion (US$ 22.55 billion). billion in 2017-18 from US$ 8.99 billion in 2016-17.
 As per Union Budget 2018-19, capacity constraints in the  2,000 kms of coastal connectivity roads have been identified
railways network will be eliminated through doubling of for construction and development .
18,000 km of tracks, third and fourth lines and
 Select airports in Tier 2 cities will be taken up
conversion of 5,000 km of tracks into broad
for operation and maintenance in the PPP
gauge.
mode in the coming years.
 A new Metro Rail Policy was approved in
 Road projects worth Rs 6.92 trillion (US$
August 2017.
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.  Rs 10,000 crore (US$ 1.54 billion)
to facilitate higher investment in allocated in Union Budget 2018-19 for
affordable housing. creation and augmentation of telecom
infrastructure in the country.
 The National Housing Bank will refinance
individual housing loans of about US$ 3.1  In the second phase of Strategic Crude
billion in 2017-18. Oil 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

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

 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 country’s 1.3 billion people
were in prime house-buying age -- 20 to 40 years, more than any
40%
than any other nation.

39%
 As per Union Budget 2018-19, a dedicated Affordable Housing Fund 35%

36%
(AHF) will be established under the National Housing Bank which will

34%

34%
33%
be funded by shortfall in priority sector lending and government

32%
30%

30%

30%
bonds.

27%
 Per capita income has grown at a compound annual growth rate of 25%

26%
10 percent for the past five years.

22%
20%
 Prime Minister Narendra Modi broadened reforms in FY17 to foster
construction and home buying under his “Housing for All”
15%
programme, launched in June 2015. That aims to build 20 million
urban homes and 30 million rural houses by 2022. Property has also
10%
become the most affordable in two decades.

 Approximately, 60 million new homes are expected to be built in 5%

India between 2018 and 2024 with social and affordable housing
rising almost 70 percent to 10.5 million by 2024, exceeding the 33 0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018
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.

Source: Bloomberg, Economic Times

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

 INFRASTRUCTURE DEVELOPMENT IN NORTHEAST
INDIA

 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.

 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 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.

Source: Budget, Economic Times, Media sources, Aranca research

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

 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 airport’s 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 (2013–17); 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

 Around 55 new airports are required in India by 2030 with an investment of US$ 36-45 billion.

Source: Media sources, Aranca research

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

 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.

 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
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.

Source: Media sources, Aranca research

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

 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

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

 OPPORTUNITIES IN INFRASTRUCTURE

Government Initiatives
 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$35 billion for the period of 2014-19 to boost India’s manufacturing and infrastructure sectors.
International
 The Japanese government is constantly looking for investment opportunities in India.
Associations
 Asian Development Bank will provide US$ 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
Urban Indian Real 2022.Hundreds of new cities need to be developed over the next decade.
Estate  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.

Source: Media sources, Aranca research, Ministry of Finance

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

 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.
300
 It is a subsidiary of the Larsen and Toubro group and was set up in
1995.

 The company has implemented major infrastructure projects across 250

roads, bridges, ports, airports water supply, hydel energy, metro

249.41
railway and urban infrastructure.

 The company’s revenue has increased from US$ 9.12 million in FY 200
2010-11 to US$ 396.45 million in FY 2015-16.

 During FY17, the company earned total revenue of Rs 572.11 crore

150
(US$ 85.28 million).

152.70
100

85.28
50

15.94
15.42
8.73

36.38
0

FY11

FY12

FY13

FY14

FY15

FY16

FY17
Source: Company website

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

 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

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

 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 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

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

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

 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

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

 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

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

 EXCHANGE RATES

Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year INR INR Equivalent of one US$ Year INR Equivalent of one US$
2004–05 44.81 2005 43.98
2005–06 44.14
2006 45.18
2006–07 45.14
2007 41.34
2007–08 40.27
2008–09 46.14 2008 43.62

2009–10 47.42 2009 48.42

2010–11 45.62
2010 45.72
2011–12 46.88
2011 46.85
2012–13 54.31
2013–14 60.28 2012 53.46

2014-15 61.06 2013 58.44

2015-16 65.46 2014 61.03
2016-17 67.09
2015 64.15
Q1 2017-18 64.46
2016 67.21
Q2 2017-18 64.29
Q3 2017-18 64.74 2017 65.12

Source: Reserve bank of India, Average for the year

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

 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 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
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.

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