Industrial Infrastructure

Industrial Infrastructure

Presented By:Arjit Parashar Arun Singh,

Current StatusInfrastructures total share in bank funding rose from 3.74% in 2002 to about 8.7 per cent in 2016It is estimated that total spending on infrastructure would reach USD19 billion during FY12-17India needs Rs 31 trillion (US$ 465 billion) to be spent on infrastructure development over the next five years, with 70 per cent of funds needed for power, roads and urban infrastructure segmentsThe Indian power sector itself has an investment potential of US$ 250 billion in the next 4-5 years, providing immense opportunities in power generation, distribution, transmission and equipment

INFRASTRUCTURE SECTOR

Aviation infrastructureIndia is the ninth largest civil aviation market in the worldIndia has 464 airports and airstrips, of which 125 airports are owned by aai

India ranks fourth in domestic passenger volumes (80.16 million) as of FY16*

Indias civil aviation market is set to become the worlds third3 largest by 2020 and expected to be the largest by 2030

Advantage in India

Source: Ministry of Civil Aviation, MRO India, TechSci Research Notes: FDI Foreign Direct Investment, MRO Maintenance, Repair and Overhaul; FY Indian Financial Year (April March); *Data is till September 2015

Source: Airports Authority of India, Ministry of Statistics and Programme Implementation, Ministry of Civil Aviation, TechSci Research,Data is for April-September 2015

TrendsTravel & tourism to be contributing USD475.43 billion to GDP by 2025By 2020, passenger traffic at Indian airports is expected to increase to 421 million from 106.45 million in 2016*The travel & tourism industry is forecast to grow 12.79 per cent to USD475.43 billion in 2025 from USD142.65 billion in 2015

Roads and HighwaysSecond largest road network in the world (4.87 million kilometres)Overseas Investment for infrastructure developmentRoads constitutes about 80 per cent of the countrys passenger traffic and 65 per cent of freight trafficValue of total roads and bridges infrastructure in India is expected to expand at a CAGR of 13.6 per cent over FY0917 to USD19.2 billionProjects worth USD32.69 billion was awarded through (PPP) mode as on March 2015

In FY16, road projects worth USD2.21 billion has been awarded under (PPP) modeAs on August 2015, 149 Public Private Partnership projects were under construction and around 112 Public Private Partnership projects were implemented

Source: Business Monitor International (BMI),Ministry of External Affairs, TechSci Research

Advantage in IndiaSource: NHAI, Make in India, MoRTH, Business Monitor International, TechSci ResearchNotes: NHAI - National Highways Authority of India, MoRTH - Ministry of Road Transport and Highways, E- Estimated

ROAD NETWORK IN INDIA IS SUB-DIVIDED INTO THREE CATEGORIESSource: Ministry of Road Transport and Highways (MoRTH),TechSci Research

EVOLUTION OF INDIAS ROAD NETWORKSource: (NHAI), National Highway Builders Foundation, (RBI); Notes: FY - Indian Financial Year (April-March), NHDP - National Highway Development Project, TechSci Research,FY16*:Till November 2015

NHDPGovernment of India has formulated a seven-phase programme, National Highway Development Project (NHDP), vested with NHAI, for the development of National Highways in the country

RailwaysWorlds third-largest rail network under single managementAs on August 2015, IR has a total route network of about 66,000 kilometres spread across 8,500 stationsIt operates more than 21,000 trains dailyIt has 2.4 lakh wagons, 63,870 coaches and 9,549 locomotivesRevenue growth has been strong over the years; during FY0715, revenues increased at a CAGR of 7.9% to USD26.4 billion in FY15

Cont..In the last eight years, revenues from the passenger segment expanded at a CAGR of 8.13 per cent. In FY16 (April-October 2015), the total passenger revenue earnings were USD4.4 billionIndian Railways generated USD10.3 billion in earnings from commodity freight traffic during FY16 (April-October 2015).Increasing carrying capacity, cost effectiveness, improving quality of service will support the increment in the share of Railway in the freight movement from 35 per cent to 50 per cent by 2020

FREIGHT ACCOUNTS FOR MORE THAN TWO-THIRDS OF RAILWAYS REVENUESSource: Railway Budget 2015 - 16, Ministry of Railways, TechSci ResearchNote: Other Coaching includes service coaches such as pantry cars, parcel vans, mail vans, etc

ADVANTAGE INDIASource: Railway Budget 2014-15, Press Information Bureau, Department of Industrial Policy & Promotion; TechSci Research Notes: 2017 MRTS - Mass Rapid Transit System, Forecast 2017, MT - Million Tonnes, October 2015

INDIAN RAILWAYS HAS TWO MAJOR SEGMENTSSource: Ministry of Railways, Make In India, Railway Budget FY15 16, TechSci Research

EVOLUTION OF RAILWAYS IN INDIASource: Ministry of Railways, Note: - Data is for FY15; - Data till October 2015; ** - Data is for August 2015; *** - Data is for September 2015; ^^ - Data is for October 2015

PortsIndia has 12 major ports100% FDIIndias 187 non-major ports are strategically located on the worlds shipping routesCargo traffic at major ports in India Stood at 347.89 MMT in FY16*Increased at a CAGR of 7.4 per cent during FY0717ECargo traffic in 2017 at major ports is expected to reach 943.1 MMTThe average turnaround time improved to 4.01 days in FY15 from 3.84 days in FY14

ADVANTAGE INDIASource: Report of the Task force on Financing Plan for Ports, Govt. of India, Notes: FY (AprilMarch), NMDP National Maritime Development Programme

THERE ARE TWO BASIC CATEGORIES OF PORTS IN INDIA

MAJOR PORTS IN INDIA

Source: Ministry of Shipping

TrendsIncreasing private participationBy March15, around 99 (PPP) projects are operational with a total cost of around USD8813.8 million and capacity of 683.29 million tonnes per annum.In FY15, total cargo handled at Indian ports increased by8.2 per cent to 1052.5 million tonnes from 972.4 million tonnes during FY14Setting up of port-based SEZsDevelopment of SEZs in Mundra, Krishnapatnam, Rewas and few others is underway.

PowerThird largest producer and fourth largest consumer globally, With a production of 1,031 TWh100 per cent FDI is allowedElectricity production in India stood at 1,048.7 BU in FY15, a 8.4 per cent growth over the previous fiscalOver FY1015, electricity production expanded at a CAGR of 6.3%Electricity production in India reached 654.5 BU during April-October 2015According to the Planning Commissions 12th Five Year Plan projects that total domestic energy production would reach 669.6 million tonnes of oil equivalent (MTOE) by 201617 and 844 MTOE by 202122

Source: BP Statistical Review, Ministry of Power, TechSci Research; Notes: FY(April-March),BU Billion Unit, TWh - Terawatt Hours

ADVANTAGE INDIASource: CEA, DIPP (Department of Industrial Policy and Promotion), TechSci ResearchNotes: FY - Indian Financial Year (April March), FDI - Foreign Direct Investment, E - Estimates, TWh - Terawatt-Hour, FY22 estimates as per IEA forecasts

Sources of PowerSource: Ministry of Coal, NHPC, CEA, BP Statistical Review 2015, Corporate Catalyst India, Indian Power Sector, Ministry of Power, TechSci Research Notes: MW - Megawatt, GW - Gigawatt

RENEWABLE ENERGYAs of October 2015, total installed power capacity from renewable energy sources (excluding Hydro power) was 36.5 GW. This accounts for 13.0 per cent of the total installed power capacity and forms 6.5 per cent of the total electricity mixWind energy is the largest source of renewable energy in India; it accounts for an estimated 64.77 per cent of total installed capacity (24.7 GW). There are plans to double wind power generation capacity to 20 GW by 2022Biomass is the second largest source of renewable energy, accounting for ~12 per cent of total installed capacity in renewable energy. There is a strong upside potential in biomass in the coming yearsSolar energy accounts for 12 per cent of total renewable energy installed capacity. The countrys true potential for solar power stands at an estimated 5,000 TWh per annum

Source: Renewables 2015 Global Status Report (REN21)

NTPC: A PUBLIC SECTOR SUCCESS

During FY0915, NTPCs sales increased at a CAGR of 6.3 per cent; CAGR in profits was 6.3 per cent during FY09-13As on 31. 03. 2015, NTPC accounted for 16 per cent of the countrys capacity, though it contributed 25 per cent of total power generationThe company has an installed capacity of 45.05 GW. It aims for 128 GW of capacity by 2032Currently, 23.5 GW of additional capacity is under constructionThe company plans to set up an 800-MW advanced ultra supercritical plant, a first-of-its-kind in India1290 MW capacity commissioned during FY15 and 650 MW capacity commissioned during Q1FY16

NTPC has taken over and successfully turned around numerous sub-optimally performing stationsHigh operational efficiency (indicated by plant load factor and availability factor) is NTPCs trademarkIt is a pioneer in high-efficiency supercritical and ultra supercritical coal-bed power plants in IndiaNTPC has formulated a business plan for capacity addition of around 1,000 MW through renewable resources by 2017NTPC has already commissioned 110 MW of solar PV projects and another 250 MW of solar PV projects are under implementation as on August 2015As on August 2015, the company had commissioned its first hydro project at Koldam

Capacity addition at a CAGR of 17.7 per cent during 19822015Highest ever capacity addition of 43.05 GW during FY15.Average annual capacity addition of approximately 21 GW required till 201726% of the existing capacity needs to be added by FY17 to achieve 8% GDP growthAs of 2015, the companys total installed power generation capacity stood at 45.05 GW

DEDICATED FREIGHT CORRIDOR

The plan is to construct dedicated freight lines along the Eastern (1856 km route length) and Western (1504 km route length) parts of IndiaTotal length: 3,360 kilometres; total estimated cost: USD13.34 billion as on June 2015According to the 12th Five-Year Plan, the government allocated USD5 million for the 2,700-km Dedicated Rail Freight Corridor ProjectTotal Capital Expenditure incurred was USD595.55 million during FY14World Bank granted loan of USD1,100 million for EDFC-2 and have sanctioned a loan of USD650 million for EDFC-3 in June, 2015

Source: Ministry of Railways, DFC Dedicated Freight Corridor, DFCCIL Dedicated Freight Corridor, Corporation of India Limited, JV Joint Venture, EDFC Eastern Dedicated Freight Corridor

Freight traffic via DFC would increase at a CAGR of 5.4 per cent to 182 MT in 202122 from 140 MT in 201617Container traffic would probably be an important constituent of the WDFC and is expected to grow to 5.3 million TEUs in 202122 from 3.8 million TEUs in 201617According to the operational strategy as mentioned in the Vision 2020, dedicated freight corridors and speed raising projects would be completed in time bound mannerBy 2020, 30,000 km of route would be double/multiple linesAs per Railway Budget 2015 16, commissioning of 1200 km of double/multiple lines is projected in 2015 -16; there are 7000 km of double/multiple lines as on 2015

Source: KPMGNotes: CAGR Compound Annual Growth Rate, EDFC Eastern Dedicated Freight Corridor, WDFC Western Dedicated Freight Corridor,

Due to the DFC project, added capacity and efficiency of new infrastructure would result in an increased share of railway network to 87 per cent in 202122 from 84 per cent projected in 201617

Source: KPMG

DMICDelhi-Mumbai Industrial Corridor (DMIC) as the one of the best in the world, the 1,500 km industrial corridor's planned infrastructure will go even below the city.Today, it takes 14 days for goods to reach the ports in west India from the north. (Once) The corridor will be ready in 2018, goods will reach the ports in 14 hours

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