Infrastructure
Infrastructure: Energy, Ports, Roads, Airports,
Railways etc.
Infrastructure
is
the basic facilities needed for the functioning of a community or society. In
other words, it is the basic physical or organizational structures needed for the
operation of a society or enterprises. The 12th 5YP envisaged the
investment requirement in infrastructure to the tune of $1trillion, with 47% of
this fund coming from the private sector.
1.
Physical
infrastructure:
·
Energy: coal, oil and natural gas, hydro,
nuclear and renewable.
·
Transport: roadway, railway, airway and
waterway.
·
Communication: telecom and postal
services.
·
Urban: transport housing and civic
amenities.
2.
Social
infrastructure: (I will not cover this part)
·
Education
·
Health
Energy:India
will produce 71% of its energy needs domestically by 2016-17, and 69% by
2021-22. The remaining will be met through import.
Integrated energy
policy (IEP) 2031-32
Sector
|
2003-04 (%)
|
2031-32 (%)
|
Power generation 2012 (%), total-2,14,000MW
|
Coal
|
51
|
42-65
|
57 (1, 20,000MW)
|
Oil
|
36
|
28-33
|
0.6 (1,190MW)
|
Natural gas
|
9
|
7-12
|
9 (18,900MW)
|
Hydro
|
2
|
3-4
|
18.5 (39,3240)
|
Nuclear
|
1
|
5-6
|
2.02 (4780)
|
Renewable
|
|
5-7
|
12.5 (28,000MW)
|
Coal:India’s
reserve as on March, 2012 was 293.5billion tones (40% proven and some 40bn tons
proven)&Domestic production-540million tons in 2011-12 (import-100mn tons)
need to increased to 795mn tons by 2016-17; even then there will be import need
of 185mn tons.
·
IEP says
present potential to last for 40years.
·
Mines & Mineral (development and
regulation) bill 2011 for simple and transparent mechanism for granting of
mining lease or prospecting license through competitive bidding; Coal
forecasting, private participation and captive mining for merchant uses.
·
Pricing change from useful heat value
(UHV) to Gross Calorific Value (GCV) in 20012 (grade I-VII: 15% ash &
moisture content)- mainly Bituminous coal.Need to invest in super-critical
boiler technology.
·
Liquefaction of coal: gasification to
liquefaction (Sasol process in S. Africa and Fischer Tropsch process in
Germany).
Oil
& Natural Gas: 73% import dependent, 90% import by
2031-32.India’s Refining Capacity – 215mmt in 2013, exporting 60.84mmtof
petroleum products worth $50bn (20 refineries: 17 public & 3 Pvt.).
Steps
taken by the govt.:
·
New Exploration Licensing Policy (NELP),
1999- 177 oil & N. Gas discoveries in 39 NELP blocks.
·
Deregulation of prices: petrol,
diesel-dual pricing, L.P.G- 9 cylinders/year, kerosene-direct cash transfer
through ADHAAR, underway; import parity pricing system underway.
·
Pipeline Network (16 crude pipelines-
106MMT).
·
Vision
2015: Piped Natural Gas by re-gasification of Liquefied
Natural Gas to 200 cities.
·
Rajiv Gandhi Gramin LPG VitaranYojana,
2009- 75% population by 2015 -5.5cr new connections
·
Rangarajan formula on gas pricing:
KG-D6 gas price to go up to $8.4mbtu from $4.2mbtu by April 2014.
·
International
effort:India-Oman
(1100km) undersea pipeline, Turkmenistan-Afghanistan-Pakistan-India (TAPI-1700km)pipeline
to transport 3billion cubic feet of natural gas per day.
·
Lost
opportunities:Iran-Pakistan-India
(IPI) pipeline andIndia-Bangladesh-Myanmar natural gas
pipeline.
(Sweden has
declared that they will have nothing to do with oil by 2050).
Hydro:
potential of around 1, 45,000MW: environmental, and relief and rehabilitation
issues. (157 projects-57,672MW, 38-mega dam with 320MW capacity, 12% free to
Arunachal Pradesh).
Nuclear:
20
power plant running – 4780MW, two at Kudankulam (2000MW) yet to connect to grid,
five under construction (3300MW)
·
Target-20,000MW by 2022 and 63,000MW by
2032.
·
Signed Civil Nuclear Energy Treaty with
9 countries (US, Canada, Russia, France, Kazakhstan, Mongolia, S. Korea,
Argentina and Namibia).
Major
Issue: Safety and Environment (Sweden, Germany and Japan
will discard Nuclear Energy by 2040).
Other
sources:
Coal
Bed Methane (CBM): 4th largest proven reserved.
33 exploration block- Assam, Gujarat, Andhra Pradesh, Chhattisgarh, M.P, T.N,
Odisha, Rajasthan… Production started – 0.28mmscmd(million metric standard
cubic meters per day).
Gas/Chathrate
Hydrates:Methane Gas trapped inside ice in coastal sea, ocean
sediments, polar seabed, and permafrost (around 300mt deep in temperate region
and nearer in polar region).
Shale
Gas:
2012 – draft policy for the exploration and exploitation: “Shale Gas in India:
look before you leap”. It is being considered by a group of ministers. India is
believed to have technically recoverable resources of 96 trillion cubic feet
(tcf) of wet shale gas.
·
Ministry of Petroleum and Natural Gas
(MoPNG) has identified 6 basins as potentially shale gas bearing: Cambay,
Assam-Arakan, Gondwana, Krishna-Godavaari, Kaveri and the Indo-Gangetic basin.MoPNG
has signed a MoU with the Deptt.of states USA.
·
US geological survey: India has
recoverable resources of 6.1 trillion cubic feet (tcf) in 3 of the 26 sedimentary
basins.
·
ONGC: 34 tcf in Damodar basin alone with
8tcf recoverable (47tcf- total conventional reserves)
·
Procedure:
hydro-fraction or fracking- horizontal drilling by injecting a mixture of
water, chemicals (guar gum…), and sand into the well at very high pressures
(8000psi-pounds per square inch) to create a no.of fissures in the rock to
release the gas. It requires minimum land area of 80-160 acres and 3-4 million
gallons per well (11,000 – 15, 000 cubic mts of water).
·
TERI- india will be a water stressed
country by 2030, so the result might not be as dynamic as in the US.
·
India-waterportal.org: next 15-20 years,
consumption of water will increase by 50%, supply by 5-10%; resulting in to the
scarcity of water.
·
Possibility of contamination of aquifer
(both surface and sub-surface) from hydro-fracturing fluid disposal.
Nuclear
Fusion: ITER-international thermonuclear experimental
reactor, Cadarache, France; started in 2005-07 to be completed by 2018. It has
7 member countries: Japan, China, India, S. Korea, US, Russia and EU. 50MW
input power to produce 500MW output.
Renewable
Energy:Potential – 89,760MW, present installed
capacity-28,000MW&plan to double renewable energy generation by 2017.
Small
Hydro: less than 25MW, 3496MW installed with potential of
15,000MW.
1.
Bio-fuel:
5% (earlier 10%) blending target, Brazil-25%.
·
Bio-diesel (mono alkyl esters of long
chain fatty acid): jatropha, karanj, Mahua, Soyabean oil…
·
Ethanol (water soluble alcohol–30%
oxygen): Bagasse (2239/5000MW), Corn, Sorghum, Potatoes, Wheat, Sugarcane.
2.
Solar:
Photo Voltaic (363MW) and thermal (800MW)- 1000MW by 2013
·
JN National Solar Mission – 20,000MW
grid connection by 2022.
·
Major issue:
Gallium, Arsenic, Selenium, Indium and Tellurium getting depleted.
Wind:
more than 18,000MW in operation, and total capacity of 49,130MW.
·
Rare Earth Elements (REE)use
in magnets in Wind Mills is available mainly in China.
Tidal
and Wave Energy: ocean currents are the store house of
infinite energy. West coast of India is the most favorable region for
harnessing this energy.
Geothermal
Energy: when the Magma from the interior of earth comes out
on the surface, tremendous heat is released. This heat energy can successfully
be tapped and converted to electrical energy. Also the hot water that gushes
out through the geyser wells is used in the generation of thermal energy.
Himalayan region has major potential.
Bio-energy/
Biomass: energy derived from biological products which
include agricultural residues, municipal, industrial and other wastes (1200MW/17,000MW).
Waste
to Energy (WtE) incineration – Okhla – 16MW has
taken off but yet to connect to Grid, Ghazipur-10MW, Narela-Bawana – 36MW
Ministry of New
and Renewable Energy’s (MNRE) flagship program on ‘energy recovery from urban
and industrial waste’, announced in May 2011 aimed to generate 84MW of power
from waste by providing subsidies uptoRs 10cr to developers.
Negative
effect of WtE incineration:
1. WHO:
Dioxins are one of the “dirty Dozen” – a group of dangerous chemicals known as
persistent organic pollutants (POPs)- potential of causing cancer.
Central
Pollution Control Board and Chennai based Non-profit org. Global Alliance for
Incinerator Alternatives (GAIA) revealed life threatening levels of
particulates and toxic chemicals including Dioxins which is 30-40 times above
permissible level in Okhla, Delhi. Those who live close to incinerator since 2009
are experiencing incidences of cancer and low birth weight.
2. The
United States environmental protection agency (USEPA) recognizes incinerators
emit 2.5 times more carbon dioxide per MW than coal fired power plants.
3. Cost
twice the cost of Nuclear Energy, and incinerator relies heavily on govt.
fiscal and financial incentives.
4. US
largest WtE company, Covanta, recently announced its plan to conclude
operations in the U.K., whereas, the Municipal Corporation of Hyderabad
announced its plan to construct India’s largest incinerator using Covanta’s
technology. Europe is committed to ending the land-filling and incineration of
recyclable waste by 2020. Aiming instead to implement a resource-efficiency
strategy that will boost a circular economy; where, all waste is treated as a
resource rather than requiring expensive infrastructure to dispose of it.
(Sustainable
waste management option; prevent, reuse and recycle).
Alternative:Plasma Gasification of municipal
waste.
·
Yoshii, Japan – 24tonne per day –
running for decade released less than 1% to that of incineration plants.
·
200 municipal solid waste gasification
plants under construction or in operation globally.
·
India: Pune & Nagpur, 68 tons
each/day commercial plants employing this technology have been disposing of
medical and other hazardous wastes.
·
British Airway partner Solena (US based
bio-fuel co.) to set up plants that will gasify 1300 tons/day of London’s solid
waste to use as ATF.
Challenges
in power sector:total installed capacity-2, 14, 000MW;
Industrial sector-45%, domestic-22%, agriculture-17% and commercial-8.9%); Transmission
& Distribution Loss (India-24%, world average-15%, US & EU-4%, China-7%),
Power theft (20,000cr annual loss), under pricing and subsidies.The overall
power shortage-8.6% and peak shortage of -9%.
Power
sector reform:
1. Power
discipline: unbundle by amending states electricity act (central electricity
act, 2003 amended)
2. Merchant
sale of electricity
3. Integrated
energy policy 2031-32
4.
1% cut in consumption – Rs1000cr saving
in the economy.
Initiatives
taken in Power Sector:
·
4UMPP, coal-based of 4000MW: Sasan-MP,
Mundra-Gujarat: three units of 800MW commissioned in 2012, Krishnapatnam-A.P,
Tilaiya—Jharkhand.
·
Rajiv Gandhi GrameenVidyutikaranYojana
(RGGVY), 2005: rural electrification program to provide free connection
(202lakh achieved by 2012) to BPL household.
·
National Grid:
inter-regional transmission capacity of 27,750MW connected to Northern,
western, eastern and NE region in a synchronous mode operating at the same
frequency and same mode with southern region.
·
Open
Access: buyer to choose supplier & vice-versa at the
interstate level is now fully functional, facilitative framework created
through the central electricity regulatory commission (CERC), 2008.
·
Bachat Lamp Yojana (BLY) Scheme:
Replacement of incandescent bulb by CFL (in the long run by LED).
·
11th plan target-62,374MW,
achievement: 54,964MW. 12th plan target: 88,537MW.
Other initiatives in energy sector:
·
National Energy Fund: 0.1% Cess of
turnover in energy products for companies worth Rs100cr.
·
National Mission for Enhanced Energy
Emission (NMEEE): to save 23 million ton oil equivalent in 5 years.
·
Energy Conservation building Code
Energy Security:
it means having access to the requisite volumes of energy at affordable prices,
i.e., supply must be impervious to disruptions and sufficient quantity must be
available in time from variety of sources.
Communication:
1. Telecom:2nd
largest telephone network after China.
National Telecom Policy
2012:
·
To secure affordable, reliable and high
quality telecom and broadband services across the country.
·
One nation-one license across services
area.
·
One-nation full mobile no. portability
and work towards free roaming
·
Rural Tele-density from 39- 70% by 2017
and 100% by 2020 (total telephone in 2012-951 connections with 96.7% wireless,
urban tele-density-169%, overall- 78.66%)
·
Telecom, broadband connectivity as basic
necessity and work towards ‘right to broadband’.
·
Affordable and reliable broadband on
demand by 2015 (175mn-2017, 600mn-2020 from 2mbps to 100mbps)
Present status:TRAIbegged the total no. of internet
subscribers in India as of March 31, 2013 at 164.81 million and broadband
penetration-1%; 12mn, 7/8 access internet through mobile, expected to cross
165mnby March 2014. However, comScore put the no. of internet
users in India at 74 million. Net users spend the most time on Facebook,
followed by LinkedIn and twitter. While the most unique visitors sites is Google,
and the most popular site for news is Yahoo.
Broadband policy 2004:
22.8mn internet subscribers including 13.7mn broadband by 2012.
·
Substantial transition to new IPv6 by
2020
National Optic Fiber
Network (NOFN)-2.5lakh broadband connections to gram
panchayat for e-health, e-education, e-governance, funded under universal
service obligation fund (USOF)-7310 towers set up by 2012. USOF has also signed
an agreement with the BSNL to provide rural wire-line broadband connectivity
with a speed of 512Kbps.
Village Public
Telephones Scheme has covered 97% of villages.
Two
years after the Department of Telecom (DoT) decided to set up a telecom
equipment testing lab at the Indian Institute of Science (IISc), Bangalore to
address security issues, foreign vendors have now refused to share their design
details with the premier academic institute as it could hurt their business
interests. This sudden turn of events will now further delay the setting up of
a full-fledged ‘Telecom Testing and Security Certification Centre’
(TTSCC), which should have become fully operational by April 2013. It
will also hurt India’s preparedness towards creating the ‘Telecom Security
Directorate’ as mandated by the National Security Council. TTSCC could be
established under the DoT.
2.
Postal
Services: Amongst the largest network in the world in terms of
area covered and people served. It has broadly 4 service areas:
1. Communication
services – letters, post cards…
2. Transportation:
Parcel logistic post…
3. Financial:
saving banks, life insurance…
4.
Premium value added services: speed
post, business post, retail post…
Project Arrow launched
in 2008:IT driven project to modernize the Post
Offices to become part of core banking solution and real time banking services,
better mail delivery, remittances, insurance, saving, Speed Post-One India One Rate Scheme for just Rs.39
for any consignment weighing up to 50gms (Leasing out land, develop shopping
complexes in postal departmental land, etc. are the other initiatives).
Transport:
Road, Railways, Waterways and Airways.
Civil
Aviation: 15 international airports out of the total 187
airports (manage by the Airport Authority of India, set up in 1994).
Construction of airports through PPP: IGI T3 – Delhi, Hyderabad, Bangalore and Greater
Mumbai and Completely Pvt.-Kolkata & Chennai.
·
Operators: 15 scheduled operators
including 2 regional and 2 cargos, around 419 aircrafts (Directorate General of
Civil Aviation).
·
9th largest in the world with
18% CAGR: 142 million passengers (14mn international)- 5% of travelling
population, 1.6 million tons of air cargo.
·
Worldwide Revenue-$671bn in 2012, just
1% profit, 2013-1.6% (10.6bn), need 7 to 8% profit to cover capital cost.
1911
|
1st flight: Allahabad to Naini, 1947 –
four service providers
|
1953
|
Nationalized: Domestic-Indian Airlines & Air
India International: merged in 2007-70% completed.
|
1992
|
Open Sky Policy for Cargo
|
2003
|
Kingfisher (operation operation from 2005-2012:
loss making)
|
2007
|
Jet Airways-Air Sahara; KFA- Air Deccan; merged.
|
Issues:Aviation
Industry - $20bn debt.
·
Strict Entry Rules:
At least 5 fleet- Rs 50cr, next 2 fleet-2cr paid up capital, International
Route: 5years experienced plus 20 fleet, 10% capacity in route II to be
employed in route I (need to fly non-profitable route), Route preferences to
national carrier (Paris-exclusive for Air India).
·
High Excise duty on ATF:
4-40%, costing 45% operating cost (33% world average). Monopolies of the 4
state own suppliers. Import will save 25-30% of the ATF cost.
·
Forged Pilot license: 14, and substandard
pilot training schools.
·
Air
India Problems:Rs 5000-7000cr annual losses and
42,000cr since 2006. Retirement age 60years; large expatriate pilots recruited
with 40% higher salary. Ordered 50 Boeing (27 Dreamliner 787) & 40 Airbus
aircrafts; 6 Boeing 787 delivered on Jan2013 which constitute 4% of AI’s total
capacity (Delhi-Paris, Frankfurt, 3 domestic and 1 Standby). Indian Pilot’s
Guild-AI employees’ (440)-Boeing; Indian Commercial Pilots Association-IA employees’
(700)-Airbus; strike for parity of pay.
·
Dreamliner Boeing 787: 210-290
passengers, 16,000km non-stop, 20% more fuel efficient. But due to overheating
of brakes, A/C problems, electrical fires, cracked cockpit window, battery
malfunction…50 dreamliners were grounded globally.
Steps
taken:
·
Air India:
Rs 30,000cr ($6bn) debt restructuring plan.
·
DGCA: to phase out Expatriate pilots in
9 months.
·
Direct import of ATF & FDI upto
49%:(Jet Airways-Etihad (24%), Air Asia India, Spice
Jet- Emirates/ Tiger Airways, Indigo- Qatar Airways).
·
Unbundled services:
check-in baggage above 15Kg, preferential seats, meals/snacks, carriage of
sporting equipment and musical instruments will bear extra charges.
Railways:
Introduced in 1853 between Bombay& Thane: 34Km.
·
Freight:
1.025billion metric tons in 2012-13 (china, US & Russia), 2011-12: 969mmt.Earnings:
30% passenger tickets and 70% freight.
·
Budget 2013-14:
Rs 63,363cr (Revenue-Rs.57, 863cr, 2.3% of GDP): 16 zones.
Zones
|
HQ
|
Earnings: passenger %
|
Goods %
|
Total %
|
Northern
|
N. Delhi
|
15
|
9
|
11
|
Central
|
Mumbai CST
|
14
|
8
|
10
|
Southern central
|
Secunderabad
|
8.3
|
8.8
|
8.7
|
Northern central
|
Allahabad
|
6.7
|
8.7
|
8.1
|
Broad gauge
|
1.676mt
|
74%
|
Meter gauge
|
1mt
|
21%
|
Narrow gauge
|
0.762mt
|
4%
|
Major Issues:
·
Cross-subsidy:Garibhrath/student
concession/pass…and freight charges & upper class ticket set high.
·
Competition from other modes of
transport: Road-4-6 lane, expressway & golden
quadrilateral& waterway- coastal shipping, pipelines, and cheap airplanes.
Steps
required:
·
Gauge conversion
·
Doubling of existing single lanes
·
Electrification
·
Pvt. Participation in wagon & coach
manufacture
·
Running Duranto express-long distance
train.
Steps
initiated:
1. Dedicated
Freight Corridor (DFC):
Eastern
DFC 1839 Km: Dankuni, Kolkata-Ludhiana, Punjab (target-2017, WB-66% funding)
Western
DFC 1499Km: JNPT Mumbai- Dadri/Rewari, Delhi-UP (target-2016, Japan
International
Cooperation Agency-77% funding).
2. Adarsh
Station: drinking ware, waiting rooms, dormitories (60/980 stations)
3. Anbhumati
Coaches: Latest modern milieu
4. Computerized
unreserved ticketing system
5. Kisan
Vision Project: Cold storage, temperature controlled perishable cargo centers
through PPP
6. LinkeHolfmann
Bush (LHB): Better riding comfort, speed, longer life, amenities, controlled
discharge toilet: implemented in 14 Rajdhanis, 12 Shadabdis, and 11 AC Duranto
Coaches.
7. Bio-toilets:
8 trains running with 436 bio-toilets, DRDO to complete it by 2016-17.
8. GPS
system & RFID (radio frequency identification device) technology for
tracking railway trains.
9.
Onboard fire-detection &fire
fightingequiptment.
Feasibility
study underway:
1. DFC:
East-West (Kolkata-Mumbai), North-South (Delhi-Chennai), East Corridor
(Kharagpur-Vijayawada), South Corridor (Goa-Chennai), and Chennai-Bangalore
freight corridor.
2. High
Speed Rail Corridors: 160-200Km/hr; High Speed National Rail Authority (NHSRA)
Constituted.
Ø Delhi-Chandigarh-Amritsar
Ø Pune-Mumbai-Ahmedabad
Ø Hyderabad-Chennai
Ø Chennai-Ernakulum
Ø Howrah-Haldia
Ø Delhi-Patna
3. Biometric
VCD: Driver’s Vigilance Telemetry Control System.
Small
wrist-watch like device to monitor driver’s posture, pulse, etc. constantly. If
the driver consumed alcohol and is half asleep in the cabin, station manager
would get alarmed and automatically stop the train. Russia has been using for
Loco-pilots (train pilots)
4. Train
Collision Avoidance System (TCAS): Combination of GPS
& Radio Frequency
Applies
brakes without pilots and avoid collision of human errors, rain, fog, sabotage…
(Anti-Collision
Device-RakshaKavach was invented by RajaramBojji and patented by Konkan Railway
Corporation Ltd).
IR
requires Rs.16,000cr to implement all these steps.
Kakodkar
Committee Railway Safety – 1lakhcr
Sam
Pitroda Committee on modernization of IR – 5.6lakhcr
IR
Vision 2020: Annual outlay of Rs 1.4lakhcr is
required over a decade with estimated annual gross budgetary support of
Rs.50,000cr by the central govt. need to fix the 15,000 unmanned level
crossings which is responsible for 40% of the accident in 2011, in the next
5yrs.
Water
Ways:Shipping-95% of India’s trade volume and 68% in
terms of value.
Seaports:
13 major ports accounted for 74% of the cargo transport (12 govt. & 1
corporate owned-Ennore port), 187 notified intermediate and minor ports. Two new major port being proposed: Sagarin W.B&in
A.P to add 100million tones of capacity.
Commodity
transport in terms of volume: POL (petroleum, oil & lubricants)>
Container Cargo> Other Cargo> Coal.
Inland Waterways:
NW1:
Allahabad-Haldia: 1620Km, 1986
NW2: Sadiya-
Dhubri: 891Km, 1988
NW3:
Kottapuram-Kollam: 205Km, 1991
NW4:
Kakinada-Pondicherry: 1095Km, nov.2008
NW5:
Talcher-Dhamra(Brahmani river): 623Km, nov.2008
NW6:
Lakhipur-Bhanga (River Barak)-target; 1st phase 2016-17 & 2nd
phase 2018-19: 121Km, 2013
Road:
NH-2% of the total roads NH/Expressways-70,000Km, State Highway-1,54,522Km:
National Highway Authority of India (NHAI)
National Highway
Development Project (NHDP);
1. Golden
quadrilateral: 5846 completed
2. NS-EW:
7142/6053
3. NHDP
phase III-VII: 39809/5959
4. Port
connectivity: 380/368
5. SARDP-NE:
388/49
6. Other
NHs: 1390/964
7. NH34:
5.5/
Total
– 55,460/19,239 completed till December 2012.
New
Initiatives:
·
Engineering Procurement &
Construction (EPC): contact for far flung areas not viable under BOT (toll).
100% govt. funding-to reduces cost and time overrun.
·
Introduction of Radio Frequency
Identification (FRID)
·
Less than 5hectare areas not to insist
on environment clearance by MoEF.
·
Select highway projects to private
players under Operate, Maintain and Transfer (OMT).
Urban
Infrastructure:
JNNURM
(65mission cities) was launched for 7yrs, but it has been extended till April
2014. Its sub-components under the Unban Infrastructure and Governance (UIG)
include: Urban renewal, water supply, sanitation, sewerage and solid waste
management, urban transport, development of heritage areas, and preservation of
water bodies. It has also emphasized on 3 key mandatory pro-poor to enhance the
capacity of urban local bodies:
1. Internal
earmarking within local body budgets for basic services to the urban poor.
2. Earmarking
at least 20-25% of developed land in all housing projects (both pvt.&
public) for the economically weaker sections/low income groups.
3.
Implementation of seven-point charter
for provisioning of 7 basic entitlements/services.
The Urban
Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT): a
sub-component of the JNNURM for development of infrastructure facilities in all
towns and cities other than the 65 Mission Cities covered under its UIG
sub-mission. So far it has covered 672 towns and cities under UIDSSMT.
Urban Transport:
under JNNURM, proposal for Bus Rapid Transit System (BRTS) have been approved
in Ahmedabad, Bhopal, Indore, Jaipur, Pune-Pimpri-Chinchwad, Rajkot, Kolkata,
Surat, Vijayawada and Vishakapatnam. Purchase of 15,260 bus have been approved
and till nov.2012, more than 12,620 modern intelligent transport system
(ITS)-enables low-floor and semi-low-floor buses have been delivered to the
states/cities.
Metro Rail Projects:
NCR-3rd phase 103.5Km started, Bangalore-42.3Km by dec.2013,
Kolkata-14.67Km by 2015, Chennai-46.5Km by 2015, Kochi-25.6Km, Mumbai-42.94Km,
Hyderabad-71.16Km and Jaipur-7Km.
Achievements
of the govt. in Infrastructure sector in the last few years:
1. Special
purpose Vehicle (SPV)
India Infrastructure Finance
Company (IIFCL) set up in 2006 for long term projects
by providing up to 20% of the project cost both through direct lending to
project companies and by refinancing banks and financial institutions. It
raised fund both from domestic and international market on the strength of
govt.’s guarantees. At the end of 12th plan it will become a
catalyst for mobilizing resources for financing infrastructure by providing
guarantees for bonds issued by private infrastructure companies rather than
expanding its direct lending operations. This would enable mobilization of
insurance and pension funds, external debt, and household savings.
Infrastructure Debt Fund (IDF):
tax free bonds up to Rs.50, 000cr- 1st IDF NBFC set up by ICICI,
BoB, CITI, and LIC.
Rural Infrastructure Development
Fund (RIDF): RIDF-XIX in 2013-14 to Rs.20, 000cr for
warehouse, god-own, cold storage, silos…
Viability Gap Funding (VGF):
20% cost to be borne by the govt. with a corpus of Rs.2000cr; 13 new projects
qualified under VGF-cold chains and post harvest storage, education, health,
and skill development, NIMZ, oil/gas/LNG storage facility, irrigation, telecom,
infrastructure in agri. Market…
PPP:
toll, annuity, VGF, Negative grant…BOT-expressway, BOO-Mobile tower, BOOT-
highway, DBOT (design built operate transfer), DBFO (design built fund
operate), BLT (built lease transfer)
WB
report- India received almost half of Pvt. Participation in Infrastructure
(PPI) since 2006, in developing countries, and 98% of the total regional
investment with a total investment of $20.7 billion in 2011. By end dec.-2012,
there were 900 PPP projects in infrastructure sector.
Challenges:
·
Resources requirement: 47% pvt.; FDI-
decline in inflow in the last few years
due to regulatory uncertainties, slower growth, and delays in acquisition of
land; Long term resources-Banking, Insurance, Pension…
·
Pricing: subsidy, under-pricing,
cross-subsidization…
·
PPP model: sufficient?
·
Govt. inefficient spender
·
Dovetailing- Planning Commission
·
Apolitical
## ONGC acquisition of Crude oil asset abroad:(Indian companies investment commitment to date in
overseas market-$100billion, actual investment-$25billion)
Overseas
oil assets don’t constitute energy security-neither ONGC Videsh Limited (OVL)
nor its Chinese counterpart actually brings any significant quantities of oil
from any of its overseas assets. Most of OVL’s overseas oil production is sold
in the local or international markets and the company is compensated in cash
payments. Gazprom was nominated the sole export agency for gas exports from
Sakhalin. As for gas, OVL does not bring to India even a molecule of gas
produced in its own fields in Sakhalin, Vietnam or Myanmar. China fares better
in this regard, primarily because it has had the foresight to build
transnational gas pipelines. Even in the case of producing fields, equity
participation is subject to certain contractual terms with the host government.
Sharing equity with other partners as in a consortium or joint venture is also
subjected to the terms of the consortium or joint venture agreement or the
operating agreement between parties.
August: OVL acquired 10% stake in Mozambique gas field from Anadarko
Petroleum Corp of US. It also acquired in June, along with OIL, 10% stake in
the same block from Videocon Group, and 2 blocks each in Columbia and
Bangladesh.
Types of participation:
Production sharing agreements-usually
has an express provision with the host government wherein the foreign investor
can take his share of production in kind (ownership of the mineral vests with
the host government, except in the U.S. impose Domestic Market Obligations
where the operator is required to sell part or all the production to the local
market). Sometimes, the domestic market has prior claim and only surpluses can
be exported. Certainly OVL can exercise its option to take its profit
share ex ante and bring the oil or gas to India wherever it is able
to do so.
Service
contracts- envisage only a pre-determined
fee, not a share in production,
·
If the circumstances
allow it, OVL can swap its equity oil with other buyers, for example; it can
swap Sakhalin/Venezuelan oil with Japan and divert oil bound for Japan from the
Persian Gulf region to our ports.
·
When international
prices of crude/gas reign high, a risk-free asset whose production/development
costs are reasonable can make an excellent investment option, provided we have
not paid a higher-than-competitive price for acquiring the asset.
References:Indian Economy by Dutt&Sundaram
and Ramesh Singh, India year book, Economic Survey, The Hindu, Times of India,
Yojan and, Union Budget.
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