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India Infrastructure Report Q1 2010Published by: Business Monitor International Published: Nov. 10, 2009 - 93 Pages Table of Contents
AbstractThis quarter BMI has introduced a new data series for infrastructure and its subsectors (transport andenergy & utilities). This is an effort to address a significant deficiency in the availability of globallycomparable, infrastructure-specific indicators and forecasts across a wide range of countries. BMI's newinfrastructure data series enables users to quantify trends and growth patterns in the infrastructure sectorsof the 35 main emerging and developed markets out of the 62 countries in BMI's infrastructure service.In BMI’s Q110 India Infrastructure Report we are forecasting India’s construction industry to post onlyminimal growth of 0.98% y-o-y in 2009/10. However, taking into account BMI’s new data breakdown,we see far more potential in the infrastructure sector for the financial year, when we are anticipating it toregister 8.98% growth y-o-y. This figure far better represents the level of activity that we have seenrecorded on the ground in both the transport and utilities industry over the last quarter and 2009 ingeneral. India’s Infrastructure Output Index, a measure of output growth from six industries related toinfrastructure production, has shown resilience thus far in 2009 and according to the latest available datafrom August 2009, production increased by 7.1% year-on-year (y-o-y), the strongest month yet. Thisconfirms BMI’s optimism for the infrastructure industry value in 2009/10 and presents further upsidepotential for the financial year. According to BMI’s new data breakdown, transport will contribute the vast majority of infrastructureindustry value, 73%, in 2009/10, equal to INR1.69trn (US$35.53bn). The road and ports sectors have seenthe most activity over the past quarter, with a number of contracts awarded as both EPC and concessions.International activity has been seen most prominently in the port sector. While the utilities infrastructure industry has contributed far less than the transport sector historically, theindustry value will average real growth of 12% y-o-y between 2009/10 and 2014/15. This reflects twomajor plans to build up electricity capacity in the country announced by the government over the pastquarter. In August, Prime Minister Manmohan Singh pushed forward with the Solar Mission, a plan togenerate 20GW of electricity from solar power by 2020, expanding to 200GW by 2030 and 300GW by2050. While ambitious, progress has been made on the 3,000MW Gujarat Solar Power plant, with theClinton Foundation signing an MoU to participate in the project in August 2009, adding some weight tothe plans. The other plan announced to build up electricity generating capacity focuses on nuclear power andindicates the rapid pace with which the market will grow over coming years. In October Prime MinisterSingh announced a strategy to develop up to 470GW of nuclear power by 2050, a more than 11,000%capacity increase from current levels. The news reiterates India’s prominence as a growing market fornuclear power and its attractiveness to international nuclear majors vying to get a foothold in the market. On the whole, India’s infrastructure sector has been defined by the same trends over the past quarter ashave long been the case. Almost limitless opportunities for development of infrastructure have beenmarred by the recurring issues with cumbersome, incoherent and inconsistent bureaucracy, issues withtransparency and competitiveness, and unclear regulations. All of this means that while opportunities areplenty there are risks that potential investors need to heed. Get Full Details About This Report >> |
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