An analysis by India Infrastructure Research of large projects across the infrastructure space indicates that vast opportunities exist although current performance has been patchy. On the positive side, the pace of road-building has clearly accelerated, and the power sector has also shown definite signs of improvement. Urban rail transport systems are also being set up in various cities at a fair speed. But while there have been grandiose targets set in aviation, railways, ports and urban water and sewerage systems, there has not been too much movement on the ground in these areas.
There are, clearly, future opportunities galore. As many as 521 major projects at various stages of planning were identified. These would, taken together, cost about Rs 38 trillion, and most sectors are represented in the mix.
Power has by far the largest weight in this set at Rs 20.4 trillion, with railways (Rs 10 trillion) coming second. The single largest project would be the Delhi-Mumbai Industrial Corridor (DMIC), which involves developing a 1,483 km corridor across seven states, alongside a high-capacity rail line. The DMIC mega-project is estimated to cost over Rs 4 trillion on a stand-alone basis.
A variety of models are also represented in this mix. Some of the projects will be PPP; some will be privately developed; some will be developed directly by the government or by some government-controlled agencies. Award processes in general have also been speeded up.
But issues persist. The old bugbears of land acquisition problems, slow environmental and statutory clearances, and policy ambiguity and policy lacunae continue to hold up project implementation. Quite a few projects remain stalled. Financing costs also remain high and financing is hard to get, with many banks having hit sector limits. Quite a few developers are also hobbled by the fact that their own funds are stuck in stalled projects.
The global slowdown has led to subdued interest and made it hard to raise cash abroad, even though 100 per cent FDI would be welcome in most infrastructure areas. However, policymakers appear determined to tackle the roadblocks and ease policy constraints. As and when the global economic cycle picks up, investment flow into infrastructure should certainly improve.