In the past couple of years, the government has announced and awarded a number of key projects across infrastructure sectors. Among these are the mechanisation of the Eastern Quay at Paradip port, the Kolkata monorail project, the Zojila tunnel project, etc. A number of these projects have also been plagued by issues which have hampered project progress. For instance, the Lower Siang hydropower project has been constrained due to protests by the local population. This results in significant time overruns and hampers the financial feasibility of a project.
Overall, the road sector has seen significant progress in project development in the past year. The cabinet approved the Rs 7,000 billion road development plan – Bharatmala – in October 2017 through which it aims to build a road network of 83,677 km over the next five years. A major project which was recently awarded is the Zojila tunnel project in Jammu & Kashmir. IL&FS won the contract for building the Rs 48.99 billion tunnel through the L1 route in January 2018. The project will connect Srinagar, Kargil and Leh and provide all-year access to the regions.
The port sector has seen the award of a number of projects across both the major and minor ports. Of the projects awarded, six projects worth Rs 50.48 billion were awarded at the major ports. One of the key projects was the mechanisation of the EQ-1, EQ-2 and EQ-3 berths at Paradip port which was awarded to a consortium of JSW Infrastructure Limited and South West Port Limited. The project involves an estimated investment of Rs 16.48 billion and will add a capacity of 30 million tonnes per annum (mtpa). It is expected to be commissioned by 2020. Across the non-major ports, Phase IA of Astaranga port, which was awarded to Navayuga Engineering Company Limited and is expected to cost Rs 74 billion, is yet to start construction. Another non-major port project is the Subarnarekha port project involving an investment of Rs 28 billion. The project has been facing considerable delays due to challenges in land acquisition.
The power sector has seen the maximum number of projects being awarded in the hydropower segment. Twenty projects with a total cost of about Rs 1,328 billion and a capacity of 14 GW have been awarded across states. However, a number of these projects have been constrained due to challenges around environmental clearances, technical clearances and opposition from local residents. One of the major hydropower projects facing significant delays is the Lower Siang hydropower project awarded to Jaiprakash Power Ventures Limited in 2006. The project has been delayed due to protests from the Siang People’s Forum and the Lower Siang Dam Affected Peoples’ Forum. They have appealed to the central government stating that the project will affect their livelihood and take away their ancestral land.
The Ministry of Railways is taking a number of innovative initiatives to boost project development in the railway sector. For instance, the redevelopment contract of the Habibganj railway station (as the first private railway station in the country) has been awarded to the Bansal Group. It will invest Rs 1 billion to overhaul the station. The airport sector has seen several new projects being awarded. Recently, Phase II of the modernisation of Chennai airport was awarded to AECOM, which plans to build the airport along the lines of Singapore’s Changi Airport.
The urban transport sector saw major projects such as the Kolkata monorail and the Kochi metro being awarded. Of the projects tracked, a total of five stretches together having a length of about 72 km have been awarded between January 2016 and January 2018. The Kolkata monorail project, under which a 30 km stretch is being developed, has attracted an investment worth Rs 42 billion. The state government has signed an MoU with Burn Standard Company for the project, which is expected to be completed by 2020.
Of the projects tracked in the water and waste management sector, five projects worth Rs 21.52 billion were awarded to various contractors during 2017. In Bihar and Karnataka, projects of about Rs 13.39 billion and Rs 3.8 billion, respectively, were awarded. In Bihar, a 60 million litre per day (mld) sewage treatment plant (STP) in Patna’s Saidpur zone has been awarded to UEM India Private Limited and Jyoti Build Tech Private Limited. Also, a 23 mld STP in the city’s Beur zone has been awarded to a joint venture of Larsen & Toubro, Voltas Limited and GAA Germany.
Conclusion
Projects in the infrastructure sector have seen significant progress under the current government. However, this is not the same across sectors. While projects in the road, power transmission and water and waste sectors have seen significant progress, certain sectors such as thermal and hydro generation have faced significant delays due to delay in regulatory clearances and protests by locals. Thus, infrastructure projects show a mix of progress and delays across sectors.
