D&B India’s Leading Infrastructure Companies 2018

Learning & Economic Insights Group

Enhancing customer experience through knowledge, research and insights

Contact us:

india@dnb.com www.dnb.co.in

022 3348 8866

India’s Leading Infrastructure Companies 2018

India’s Leading Infrastructure Companies 2018

India’s Leading Infrastructure Companies 2018 Published in India by Dun & Bradstreet Information Services India Pvt Ltd.

Registered Office ICC Chambers, Saki Vihar Road, Powai, Mumbai - 400072. CIN: U74140MH1997PTC107813 Tel: +91 22 6676 5555 / 2857 4190 / 92 / 94 +91 22 6680 1300 / 2847 6291 / 93 Email: DNB_India-corporatepublication@DNB.com URL: www.dnb.co.in

New Delhi Office 1st Floor, Administrative Building, Block ‘E’, NSIC - Technical Services Center, Okhla Industrial Estate Phase - III, New Delhi - 110020. Tel: +91 11 4149 7900 / 01 Fax: +91 11 4149 7902

Kolkata Office 166B, S. P. Mukherjee Road, Merlin Links, Unit 3E, 3rd Floor, Kolkata - 700026.

Chennai Office New No: 28, Old No: 195, 1st Floor, North Usman Road, T. Nagar, Chennai - 600017. Tel: +91 44 4289 7602 / 7619 Fax: +91 44 2814 2285

Ahmedabad Office 801 - 8th Floor, Shapath V, Opp. Karnavati Club, S. G. Highway, Ahmedabad - 380054. Tel: +91 79 4900 4601 / 602 Haryana Office 706, 7th Floor, Tower B, Global Business Park, Mehrauli Gurgaon Road, Gurugram, Haryana - 122002. Tel: +91 124 493 4700

Tel: +91 33 2465 0204 Fax: +91 33 2465 0205

Bengaluru Office No. 7/2 Gajanana Towers, 1st Floor, Annaswamy Mudaliar Street, Opp. Ulsoor Lake,

Hyderabad Office The Executive Centre, Level 1, Unit 2, Salarpuria Sattva Knowledge City, Inorbit Mall Road, Raidurg Village, HITEC City,

Bengaluru - 560042. Tel: +91 80 4250 3500

Hyderabad - 500081. Tel: +91 40 6740 9230

Editor

Preeta Misra Naina Acharya

Sub-Editor

Editorial Team Mihir Shah, Christopher D’Souza, Yogesh Jambhale, Omesh Kandalkar, Rohit Pawar, Nishikant Sharma, Swati Rajgarhia Suhail Aboli, Jaison Swamidas, Rajesh Kandari, Amit Rathi, Prasad Kachraj, Sukhvinder Singh, Romita Dey Talukdar, Monark Munshi, Subhonita Gargari, Dharmesh Kapoor, Dhrumil Shah, Apoorwa Tyagi, Sohail Chawla, Amit Kumar, Sonal Singh Rana, Siddarth Ravindran, Mithilesh Patodia, Miloni Shah, Apeksha Mutreja, Manjula Dinakaran, Pranava Rao, Taran Chawla, Pooja Arora, Nalini Kukreti, Rashi Sharan, Vaibhav Kapur, Sagar Kamath Mangesh Shinde, Nehal Khosla, Sumit Sakhrani, Ankur Singh, Rajesh Gupta, Melita Menezes, Smruti Gandhi, Tia Roy, Nikita Sachdev, Rehan Shah, Ankita Satam, Shanice Pereira, Rithesh Poojary, Anoop Parwani, NadeemAnsari Mohan Chilvery, Tushar Awate, Shilpa Chandolikar, Sunil Burli, Ganesh Singh, Samata Gaikwad All rights reserved Except for any fair dealing for the purpose of private study, research, criticism or review as permitted under the Copyright Act, no part or portion of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher. DISCLAIMER This publication is circulated by Dun & Bradstreet to the select recipients and at Dun & Bradstreet’s sole discretion. The publication shall neither be reproduced, republished, publicly circulated, disclosed nor shall be copied, modified, redistributed, or otherwise made available to any person or entity, in any form whatsoever including by way of caching, framing or similar means, whether in part or whole, without the prior written consent of authorized representatives of Dun & Bradstreet. This publication is meant for the fair and internal use of the recipients. Dun & Bradstreet provides no advice or endorsement of any kind through this publication. This publication does not constitute any recommendation by Dun & Bradstreet to enter into any transaction or follow any course of action. All decisions taken by the recipients shall be based solely on the recipient’s evaluation of circumstances and objectives. Dun & Bradstreet recommends that the recipient independently verify the accuracy of the contents of the publication, upon which it intends to rely. This publication contains information compiled from various sources over which Dun & Bradstreet may not have control and / or which may not have been verified by Dun & Bradstreet, unless otherwise expressly indicated in the publication. Dun & Bradstreet, therefore, shall not be responsible for any accuracy, completeness or timeliness of the information or analysis in this publication. Dun & Bradstreet thus, expressly disclaims any and all responsibilities and liabilities arising out of the publication or its use by the recipient or any person or entity. Sales Team Operations Team Design Team

India’s Leading Infrastructure Companies 2018 11 th Edition ISBN 978-93-86214-28-7

Contents Preface............................................................................................................ I - 1 Foreword......................................................................................................... I - 3 Executive Summary......................................................................................... I - 5 Methodology. ................................................................................................. I - 7 Definitions & Calculations............................................................................... I - 9 Overview of the Indian Infrastructure Sector. .............................................. I - 11 NextGen Infra: Building India of Tomorrow.................................................. I - 43 Interviews. .................................................................................................... I - 57 Listings. ......................................................................................................... I - 61

Profiles..........................................................................................................01-55

Index. ............................................................................................................56-58

Preface

Dun & Bradstreet India is pleased to announce the 2018 edition of its premier publication ‘ India’s Leading Infrastructure Companies ’. Currently in its 11th year, the publication has been an insightful compendium on India’s infrastructure sector. Over the years, the publication has covered core infrastructure sectors such as Construction, Ports, Power, Oil & Gas, Telecom and Logistics Infrastructure. The 2018 edition of the ‘ India’s Leading Infrastructure Companies ’ publication continues with its traditional approach of profiling the leading companies from the Indian infrastructure sector and ranking them on the basis of key indicators such as total income and net profit. Besides this, the publication also covers an in- depth analysis of the Indian infrastructure sector. In India, infrastructure investment asapercentage to GDP is placed well when compared to peer countries. However, in terms of availability and quality of infrastructure, India stands far behind. In other words, we are spending the ‘right’ amount on infrastructure, but we are not getting an adequate output. This is the result of many factors, but two specific ones dominate, i.e. high ‘agency’ cost and high corrective maintenance cost of infrastructure. When we compare India with the leading five economies (US, UK, Germany, France and Japan), for every US$100 spent on infrastructure, US$70 goes towards ‘agency’ cost, US$12 is spent on corrective maintenance and the remaining US$18 is spent on creating new infrastructure and preventive maintenance. For the leading five economies, on an average US$44 goes towards ‘agency’ cost, US$6 is spent on corrective maintenance and the remaining US$50 is spent towards creating new infrastructure and preventive maintenance.

Further, a large section of this constructive expenditure, approximately up to 60%, goes towards creating and maintaining infrastructure to be used within city and related ecosystem. In this context, it makes imminent sense to move towards constructing smart infrastructure/ cities, which has distinct economic advantages. Various research suggests that the smart building solutions offer cost saving opportunities of up to 40% in water & energy usage and overall building maintenance costs. Smart infrastructure also yields other advantages like saving fuel cost, less trafficetc. Closing this efficiencygapcan reap large growth dividends. It has been estimated that for 1% increase in public infrastructure investment, efficient countries are able to add 0.6% to their GDP as against 0.3% by least efficient countries. Accordingly, the theme of the 2018 edition of the ‘India’s Leading Infrastructure Companies’ publication is ‘ NextGen Infra: Building India of Tomorrow ’, which dwells on approaches to make Indian infrastructure more effective and efficient. I hope you enjoy reading ‘ India’s Leading Infrastructure Companies 2018 ’ and I look forward to receiving your suggestions.

Manish Sinha Managing Director – India Dun & Bradstreet

I - 1

Foreword

Dun & Bradstreet India takes pleasure in announcing the launch of the 11th edition of its premier publication ‘ India’s Leading Infrastructure Companies 2018 ’. This publication has served as a compendium of information about leading infrastructure companies of India. In addition to profiling of leading companies of the infrastructure sector, the publication also provides information on the trends of the various sub-segments of this important sector. India is one of the fastest growing economies of the world and is entering into an era where infrastructure will be at the core of country’s economic development. In recent years, the government has embarked on series of measures to accelerate infrastructure development. As a result of some of these initiatives, India’s rank in terms of overall infrastructure development as per the Global Competitive Ranking of the World Economic Forum (WEF), has vastly improved from 87th position in 2015 to 63rd position in 2018. However, on a global-comparison, India still lags behind considerably in terms of availability and quality of infrastructure. In fact, the WEF report has identified “inadequate supply of infrastructure” as one of the most problematic factors for doing business in India. In addition, a known fact is that in view of the country’s rising young middle class, mere accessibility to basic infrastructure like road, railways, housing, electricity, etc. will not be enough. The focus thereforeneeds toshiftbeyond merely upgrading the existing infrastructure to building new-age infrastructure. The use of next generation technologies will help India move towards environment friendly, future ready and cost-effective infrastructure services. With this context, Dun & Bradstreet is focusing on key elements for the Next Generation Infra that in

turn will help build India of Tomorrow . A three-pronged approach in the use of Next Generation Infra will include 1) NewAge Transportation and construction methods. It is expected that in the coming years, India will adopt various new age constructionmethods and transportation solutions that includes the use of electric cars, mass transit systems, rapid metro rails and use of digital technology to control vehicular movement. 2) An efficient, sustainable and modern energy program. The government has set a target of adding 175 GW of renewable energy in the country by 2022. The target of National Solar Mission has also been increased from 20 GW to 100 GW of grid connected solar power by 2022. This will offer enormous investment opportunities in the renewable energy sector in the coming years. And, 3) Focus on smart cities. This has the potential to improve quality of life and increase the standard of living for its citizens besides strengthening its economy. We are confident that ‘ India’s Leading Infrastructure Companies 2018 ’ will serve as a well-researched compendium on the Indian infrastructure sector. Dun & Bradstreet’s global footprint and market reach will ensure that the publication will draw the attention of global industry leaders and policy makers towards the Indian Infrastructure sector. I thank you for your continued support and look forward to receiving your feedback and suggestions.

Preeta Misra Director – Learning & Economic Insights Group Dun & Bradstreet India

I - 3

Executive Summary

Dun & Bradstreet has been tracking the Infrastructure sector for more than a decade. This year, we are pleased to present the 11th edition of the publication ‘ India’s Leading Infrastructure Companies ’. The publication highlights the role of infrastructure in the Indian economy by featuring and analysing the performance of the leading companies in the sector. The publication covers key infrastructure segments - construction, oil & gas, ports, power, telecom and logistics infrastructure. The publication profiles the leading companies of the Infrastructure sector that have annual standalone total income of ` 1,000 mn and above in FY18. The publication profiles 110 companies across key infrastructure segments, of which 53 companies belong to the construction segment (including development of airports & seaports, industrial units, roads, and railways), 19 in the power segment, 16 companies in the oil & gas segment, 9 in the ports segment, 11 in the telecom segment and 2 in the logistics infrastructure segment. Following are some of the key highlights in this publication: • Roadways play a critical role in the growth of the Indian economy as nearly 65% of goods and 90% of passenger traffic is by the roads. Development of roads and highways is of utmost priority for the Government. The Government could manage to build 22.5 km/day during FY18. It has set an ambitious target of 20,000 kms for road construction as against 15,000 in the previous year. • Indian Railways is the 3rd largest rail network, the 4th largest freight carrier and the largest passenger carrier in the world. As of August 2018, 180 new line projects costing ` 3,561.2 bn for 19,644.8 kms are in different stages of planning, approval or execution. While Railway is the backbone of the country’s transport network, it has been paralysed by the poor infrastructure over the years. In order to reduce this infrastructure deficit, the Government has envisaged medium term capital investment plan of ` 8.6 trillion over the five-year period. • India has a coastline of 7,517 kms. According to the Ministry of Shipping, approximately 95%

of India’s trade by volume is conducted by the country’s maritime route. In order to augment port infrastructure, the Government has initiated National Maritime Development Policy (NMDP) with a planned outlay of US$ 15 bn. The implementation of Sagarmala project alongwith other measures initiated are expected to give big push to the ports infrastructure going forward. • India is the 9th largest aviation market in the world with a size of around US$ 16 bn. India’s domestic passenger traffic crossed the 100 mn mark in 2017. India’s aviation sector has huge growth potential as the country is projected to be the third largest aviation market by 2020. This potential growth can be achieved through airport expansion, low cost carriers, increased private investment, increased FDI flows in the sector and improved regional connectivity. • India is presently the world’s 2nd largest telecommunications market with a subscriber base of 1.2 bn as on March 31, 2018. Currently, the Indian telecom sector is going through a consolidation phase. In this scenario, the Government is formulating a new National TelecomPolicy2018whichwouldcover regulatory issues and licensing frameworks, connectivity for all, quality of services, ease of doing business and absorption of new technologies including 5G and Internet of Things. We are confident that ‘India’s Leading Infrastructure Companies 2018’ will provide the right platform for the profiled companies that are playing a key role in transforming the infrastructure sector. Dun & Bradstreet will continue to track this transformation and capture the pulse of this critical industry through future editions of this publication.

Naina R Acharya Leader Learning & Economic Insights Group Dun & Bradstreet India

I - 5

Methodology

the National Company Law Tribunal (NCLT) or have adopted different debt restructuring mechanisms. In such cases (where information is public), an additional criteria set has been applied to include and exclude companies from the publication. Source of Information The information contained in this book is sourced and compiled from company websites and information available in the public domain such as annual reports, draft red herring prospectus, industry bodies and associations, Government of India websites such as Reserve Bank of India, Securities and Exchange Board of India, Economic Survey, Central Statistical Organisation, National Highways Authority of India, Planning Commission, Telecom Regulatory Authority of India, Department of Telecommunications, etc. The information has been further verified and authenticated to ensure its accuracy. To ensure that all the information contained in this publication is verified and authenticated, companies that have not responded with financials statements, and/or their information is not available in public domain at the time of compiling this publication are excluded. The various financial computations are based on Dun & Bradstreet’s methodology and have been explicitly explained in the ‘Definitions and Calculations’ section. A standardised format has been used for reporting the information about the companies. The editorial team would appreciate feedback from readers in terms of updates regarding any changes in their companies, as and when they occur. Each company featured in the publication has been allotted a unique identification number (D-U-N-S® - Data Universal Numbering System). This will help readers locate and obtain full-fledged information reports on these companies from the Dun & Bradstreet database. We are confident that ‘ India’s Leading Infrastructure Companies 2018 ’ will prove a useful reference tool for information on the Infrastructure sector. We would be glad to receive valuable feedback and suggestions.

For the purpose of the publication ‘ India’s Leading Infrastructure Companies 2018 ’, the term Infrastructure has been defined to include key segments, viz., construction, oil & gas, ports, power, telecom and logistics infrastructure. Construction segment includes construction of facilities such as roads & highways, railways, power projects, ports and airports, industrial plants, etc. Logistics Infrastructure includes Multimodal Logistics Parks, Inland Container Depots (ICD), Cold Chain facilities and Warehousing facilities. Adequate measures are undertaken such as an advertisement in the ‘All India’ edition of a prominent business daily, to ensure that the publication covers leading infrastructure companies from across the country. In order to increase participation for the publication and the awards, additionally emails, letters and social networking were also entailed for reaching out to Dun & Bradstreet India’s in-house database and companies registered with respective regulatory bodies and industry associations. However, companies that have not responded with FY18 standalone financials statements, and/or their information was not available in public domain, have not been included. Companies that have explicitly declined to participate have also been left out. Eligibility Criteria As a basic selection criterion, companies with a standalone total income of ` 1,000 mn and above in FY18 are featured in this publication. The publication includes companies with substantial presence in the Infrastructure sector as defined for the purpose of this publication. We have also considered additional exclusion criteria of the corporate governance record and financial health (*) to arrive at the final list of companies to be featured in the publication. * Macroeconomic conditions in India, in the past few years have impacted the financial health of many Indian companies. There have been instances wherein companies faced difficulties in servicing their debt and have been subject to bankruptcy proceedings at

I - 7

Definitions & Calculations

This section defines financial terms and ratio for FY18 and FY17, used in this publication.

Ratios

Particulars

Definition

Total revenue including other income as reported in the company’s standalone financial statements Profit after tax as reported in the company’s standalone financial statements. Non-Current Assets + Current Assets (excluding accumulated losses and deferred expenses) as reported in the company’s standalone financial statements

Total Income

Net Profit

Total Assets

Net Profit Margin (NPM) (%)

(Net Profit/Total Income)* 100

Return on Assets

(PAT/Average Total Assets) * 100

Debt-to-Equity (times)

(Total Debts) /Shareholder’s Fund

Equity Share Capital + Preference Share Capital+ Reserves and Surplus – Accumulated Losses – Deferred expenses

Shareholder’s Fund

Total Debt

Short Term Debt + Long Term Debt

Average Total Assets

(Opening Total Assets + Closing Total Assets)/2

I - 9

OVERVIEW OF THE INDIAN INFRASTRUCTURE SECTOR

Overview of the Indian Infrastructure Sector

A country’s physical infrastructure is an important determinant of its economic growth. It contributes to enhance productivity, and also improves the quality of life for citizens of the nation. The scope of physical infrastructure (henceforth infrastructure) comprises of roads & highways, railways, air transport infrastructure, ports, logistics infrastructure, power (conventional & renewable energy), oil & gas and telecommunication. In India, the infrastructure sector has witnessed significant increase in investment in recent years. The government has laid considerable emphasis on investment in infrastructure in its recent budgets in order to achieve high growth trajectory for the Indian economy. Yet there is a long way to go. Hence at this backdrop, the chapter seeks to assess the current status of infrastructure in India. It also discusses the challenges faced by the sector and some policy measures taken by the government to reduce the infrastructure deficit.

I - 12

Overview of the Indian Infrastructure Sector

Roads & Highways

Current Status Roadways play a critical role in the growth of Indian economy as around 64.5% of goods are transported via road and nearly 90% of passenger traffic is by road. The country has a road network of 5.5 million km, which comprises national & state highways, expressways, district roads and village roads, etc. Although the length of India’s national highway network stands at a whopping 120,543 km (as of Dec 2017), this accounts for merely 2% of the country’s total road network. During FY18, the government of India had set itself a target of building 41.09 km of roads & highways per day. However, it could only manage to build 22.55 km/day during the year. Likewise, it had also set a target of awarding projects at the rate of 68.5 km per day in FY18, of which it could achieve only 43.7 km/day. Nevertheless, the pace of road construction and awarding of projects is much faster than it used to be till about five years ago.

India’s road network (mn km)

Source: MoRTH

Road Development

*Upto December 2017 Source: MoRTH

I - 13

Overview of the Indian Infrastructure Sector

Major projects under implementation: Project name

Projects details

Total investment ( ` bn)

5,350.0

Bharatmala Pariyojana – Phase I

- A length of 24,800 km of national highways to be constructed over a period of five years starting from 2017-18 to 2021-22 in a phased manner The construction of 208 ROBs/ RUBs on level crossings - Out of these 208 ROBs, 78 ROBs with an estimated investment of ` 64.28 bn have been sanctioned till March 31, 2017; of which 35 works have been awarded.

208.0

Setu Bharatam

Char Dham Mahamarg Vikas Pariyojana - involves developing 900 km of national highways in Uttarakhand. 120.0 Pradhan Mantri Gram Sadak Yojana - The scheme has been extended beyond 12th Five Year plan. - It will help in connecting 38,412 habitations

849.34 (central share - ` 549 bn and state share – ` 300.34 bn)

217.69 (for phase-I)

- The scheme aims at connecting 88 district headquarters in the North Eastern states to nearest national highways by at least 2 lane road. - It envisages 2/4 laning of about 7,429 km of national highways and 2 laning /improvement of about 2,712 km of state roads in the North Eastern region. - The first phase of the projects consists of improving 4,099 km of roads consisting of 3,014 km of national highways and 1,085 km of state roads. - The scheme consists a road development plan for LWE affected 34 districts in the states of AP, Bihar, Chhattisgarh, Jharkhand, MP, Maharashtra, Odisha and UP. - As on Dec 31, 2017, 4,464 km length has been completed (out of total 5,477 km length). - Till December 31, 2017, 761.95 km of length has been completed out of 1,120 km total length. - The project involves the development of 403 km of NH in Meghalaya and Mizoram. - The project will be executed in EPC mode with civil works expected to be completed by 2021.

Special Accelerated Road Development Programme for the North Eastern Region (SARDP-NE)

66.88 (cumulative expenditure incurred so far)

Road Connectivity Project for Left Wing Extremism (LWE) Affected Areas

64.61

National Highways Interconnectivity Improvement Projects (NHIIP)

67.21

North East Road Network Connectivity Project phase I

Source: MoRTH, PIB

I - 14

Overview of the Indian Infrastructure Sector

Apart fromthe abovementioned projects, some other important projects that are under implementation includeWesternPeripheral Expressways, Vadodara-Mumbai Expressway, Bengaluru-Chennai Expressway and Byet Dwaraka-Okha bridge.

Status of various road projects under National Highway Development Programme as on December 31, 2017

Length completed in km till Dec 31, 2017

NHDP phases Projects

Total length in km

NHDP-I

Golden Quadrilateral (GQ), East-West, North-South (EW-NS) corridors, port connectivity and others

7,522

7,521

NHDP-II NHDP-III NHDP-IV NHDP-V NHDP-VI NHDP-VII

4/6 laning EW-NS corridor and others Upgradation, 4/6 laning of highways

6,647

6,593 7,962 8,285 2,643

12,125 20,000

2-laning with paved shoulders

6-laning of GQ and high-density corridor

6,500 1,000

Expressways

0

Ring roads, bypasses, flyovers and other structures

700

24

Source: MoRTH

While the government has given emphasis on increasing investment in the new projects, it has also taken various initiatives to reduce the number of stalled projects. As on Dec 31, 2017, the government had taken up 73 stalled projects for revival/completion.

The portfolio of stalled projects Description of projects

No. of projects

Length in km

Projects where issues have been resolved through regular monitoring

15 48 10 73

2,054.94 5,090.68 1,041.00 8,186.62

Projects terminated and re-packaged and re-bid Projects revived after policy intervention

Total

Source: MoRTH

The key initiatives taken by the government to revive stalled projects include: - One Time Fund Infusion Scheme whereby financial assistance is provided by NHAI to the contractor/ concessionaire in the form of a working capital loan. - Rationalised compensation – a one-time compensation, equivalent to annuities that were missed on account of delay in the completion of project, is provided to the commissionaire in the case of BOT (annuity) projects. - Substitution of concessionaire and termination Policy support The Union Budget 2018-19 proposed the following:- ƒ ƒ Allocation for road transport & highways increased to ` 1.21 trillion in FY19 from ` 1.1 trillion (RE) in FY18. ƒ ƒ The construction of tunnel under Sela Pass is proposed to be taken up.

I - 15

Overview of the Indian Infrastructure Sector

ƒ ƒ The raising of equity from the market for mature road assets, NHAI to consider organising its road assets into Special Purpose Vehicles and use innovative monetising structures like Toll, Operate and Transfer (TOT) and Infrastructure Investment Funds (InvITs). ƒ ƒ Government to come out with a policy to introduce toll system on ‘‘pay as you use’’ basis. Other policy measures ƒ ƒ Introduction of Electronic Toll Collection System, FASTag by MoRTH. Out of 424 toll plazas in the country, ETC has been implemented in 382 plazas. Project Monitoring Information System has been developed by NHAI for tracking the status of all projects, preparation of reports and online upload of important project documents like DPRs and contract documents, etc. More than 2,000 projects are getting monitored on real time basis. ƒ ƒ 100% FDI allowed under automatic route. The Road Ahead Development of roads and highways is of utmost priority for the government. It has set an ambitious target of increasing the length of national highways to 200,000 km. For 2018-19 the government has proposed a target of 20,000 km for road construction as against 15,000 in the previous year. Further, NHAI plans to raise US$ 770 mn for construction of highways, tunnels and economic corridors in the country. Road safety is another priority area for the government and it has emphasised on reducing the number of road accidents and casualties by 50% by 2020. For this purpose, the government has planned an investment of US$ 169 mn. The significant investment in road sector is expected to stimulate growth in the sector.

I - 16

Overview of the Indian Infrastructure Sector

Railways

The Indian Railways (IR) is the world’s largest government-owned railway, and the third largest rail network in the world after the USA and China, with a length of 67,368 km at the end of FY17. It is the fourth largest freight carrier and the largest passenger carrier in the world. As of August 2018, it had 12,617 passenger trains carrying 23 million passengers daily. About 180 new railway line projects entailing an investment of ` 3,561.2 bn for 19,644.8 km are in different stages of planning/approval/ execution.

Current Status

Indian Railways – Key Statistics Parameters

2016-17

2015-16

% change

Route km

67,368 61,680

66,687 60,510

1.0 1.9

Broad gauge (km) Metre gauge (km) Narrow gauge (km)

3,479 2,209

3,880 2,297

-10.3

-3.8

Running track km Electrified route km Rolling stock (units) Wagons

93,902 25,367

92,084 23,555

2.0 7.7

2,77,987

2,51,295

10.6

Locomotives

11,461 70,937

11,122 70,149

3.0 1.1 0.1 0.4 0.6 4.5

Coaches

Passenger traffic (mn) Freight traffic (MT)

8,116

8,107

1,106.1 1,652.9

1,101.5 1,643.3

Total revenue earning ( ` bn)

462.8

442.8

passenger ( ` bn)

1,020.3

1,069.4

-4.6

freight ( ` bn)

Source: Ministry of Railways

In FY17, the passenger traffic of the IR stood at 8,116 mn, largely unchanged as compared to the preceding year. Likewise, the freight traffic stood at 1,106.1 MT, only nominally higher vis-à-vis the preceding year. The revenue fromthe freight segment accounted for asmuch as 63%of the railway’s gross earnings during the year. Within the passenger segment, almost 82.5% of its revenue was constituted from express long-distance train service, while suburban services and ordinary short distance traffic accounted for 5.8% and 11.7% of revenue from passenger segment, respectively.

Moving further, data suggests that the passenger and freight traffic of the Indian Railways has further increased to 8,287 mn and 1,160 MT, respectively, in FY18.

I - 17

Overview of the Indian Infrastructure Sector

Investment in Indian railways under plan outlays

Source: Ministry of Railways

Key developments Passenger safety

ƒ ƒ There has been a decline in train accidents from 104 in FY17 to 73 in FY18. In order to enhance various safety measures in railways, the government has created the Rashtriya Rail Sanraksha Kosh (RRSK) fund of ` 1 trillion towards safety expenditure over 5 years. ƒ ƒ IR has rolled out its insurance scheme for passengers at the premium of ` 0.92 per passenger. Passenger Amenities ƒ ƒ Mission Retro-Fitment has been launched to revamp almost 45,000 passenger coaches in order to enhance passenger experience. 14 Rajdhanis and 15 Shatabdi trains have been identified to significantly improve passengers experience under “Project Swarn”. ƒ ƒ In November 2017, IR introduced the facility of informing passengers about status of trains running late through Short Messaging Service (SMS). Digital initiatives ƒ ƒ A new mobile app IRCTC Rail Connect has been launched. Aadhaar linked user IDs have been allowed to book 12 e-tickets in one month as against 6 tickets for non-Aadhaar user IDs. ƒ ƒ A new Integrated mobile app ‘Rail SAARTHI’ has been launched which provides various services viz. rail e-ticket booking, unreserved ticketing, complaint management, Clean my Coach, passenger enquiry, etc. ƒ ƒ Payment of ticket using UPI/BHIM App has been implemented at reservation counters as well as on e-ticketing website. Railway infrastructure ƒ ƒ The government has collaborated with the Government of Japan for the construction of a high speed passenger train corridor between Ahmedabad and Mumbai. The total project investment is estimated to be US$ 15 bn, with 81% of project cost funded by loan from Japan for a period of 50 years at 0.1% annual interest with a 15-year moratorium period. ƒ ƒ Projects for two routes namely New Delhi- Mumbai Central (including Vadodara- Ahmedabad) and New Delhi- Howrah (including Kanpur- Lucknow) for raising of speed to 160/200kmph have been

I - 18

Overview of the Indian Infrastructure Sector

launched at an estimated investment of ` 180 bn. The speed enhancement project includes works such as through fencing, removal of level crossings, train protection warning system, mobile train radio communication as well as automated and mechanized diagnostic systems. ƒ ƒ Eastern Dedicated Freight Corridor of 1,856 km length and Western Dedicated Freight Corridor of 1,504 km length is under construction. ƒ ƒ Rapid Rail Transport System - The government has proposed to develop 180 km Delhi-Gurugram- Rewari-Alwar rapid rail corridor with an investment of around ` 370 bn. The National Capital Region Planning Board has identified eight rapid transport corridors in total. ƒ ƒ In December 2017, the government approved establishing India’s first National Rail and Transport University (NRTU) in Vadodara, Gujarat to skill the human resources and build capability. Policy support Union Budget FY19 ƒ ƒ Railways’ capex for FY19 has been pegged at ` 1.5 tn as against ` 1.2 tn for FY18. A large part of the capex is devoted to capacity creation. ƒ ƒ A proposal to develop 18,000 km of doubling, third and fourth line works and 5,000 km of gauge conversion. ƒ ƒ To eliminate 4,267 unmanned level crossings in the broad gauge network in the next two years. ƒ ƒ All stations with more than 25,000 footfalls to have escalators. ƒ ƒ All railway stations and trains to be progressively provided withWi-Fi and CCTVs to enhance security of passengers. ƒ ƒ 150 km of additional suburban network in Mumbai is being planned at an investment of over ` 400 bn, including elevated corridors on some sections. ƒ ƒ A suburban network of approximately 160 km at an estimated investment of ` 170 bn to be planned to cater to the growth of the Bengaluru metropolis. ƒ ƒ Optimal electrification of 4,000 km of railways targeted for commissioning in FY19. Other policy measures ƒ ƒ The government has approved listing of Rail Vikas Nigam Ltd, Indian Railway Finance Corporation Ltd, Indian Railway Catering and Tourism Corporation Ltd on stock exchanges. The way ahead While railway is a backbone of the country’s transport network, it has been paralysed by deficient infrastructure. The infrastructure is overstretched with more than 60% of routes being more than 100% utilized. In order to eliminate this infrastructure deficit, the government has come out withmedium term capital investment plan of ` 8.6 trillion over the five-year period. Out of this five-year fund requirement, 30% of the fund requirement is expected to be met through the gross budgetary support, while 28% will be met through debt and 15% through PPP. Further, the government has proposed to set up a dedicated US$ 5 bn Rail India Development Fund with World Bank assistance. The fund is expected to serve as an institutional mechanism for the railways to raise funds from the market for its capital investments.

I - 19

Overview of the Indian Infrastructure Sector

Ports

India has a coastline of 7,517 km. According to the Ministry of Shipping, approximately 95% of India’s trade by volume and 68% by value is conducted by the country’s maritime route. As at the end of 2016-17, India had 13 major ports (12 government-controlled and one which is a public company) and approximately 205 non-major ports.

Current status Cargo traffic at Indian ports

During FY17, major and non-major ports in India together handled a total cargo throughput of around 1,133.7 MT, registering a growth of 5.8% y-o-y. While major ports registered a 7% y-o-y growth in cargo handled during the year, non-major ports reported a y-o-y growth of 4.2%. Major ports handled almost 57% of cargo handled at Indian ports in FY17.

Cargo handled at Indian ports

Source: Ministry of Shipping

As per the state-wise cargo traffic data, major and non-major ports in Gujarat handled almost 39.8% of the total cargo at Indian ports. In terms of total port traffic, Gujarat is followed by Maharashtra (14.1%), Andhra Pradesh (11.5%), Tamil Nadu (10.6%) and Odisha (9.8%). The commodity composition of the total traffic at Indian ports reveals that crude oil & products continue to be the single largest commodity handled by the ports accounting for 34.1% of total traffic at ports in FY17. This is followed by coal and iron ore respectively accounting for 22.9% and 6.7% of total traffic at ports in FY17.

Going ahead, the cargo traffic at major ports increased by another 4.8% to 679.4 MT in FY18.

I - 20

Overview of the Indian Infrastructure Sector

Commodity wise traffic handled at Indian ports

Source: Ministry of Shipping

Performance indicators for major ports Capacity utilisation

The cargo handling capacity of major ports has increased from 965.4 MT at the end of FY16 to 1,065.8 MT at the end of FY17. However, the average capacity utilisation for all major ports remains low at 60.8% for FY17. While Mumbai port has the highest capacity utilisation at 96.6%, capacity utilisation at Cochin port is the lowest at 44.2%. Efficiency The average overall pre berthing detention time (PBDT) for all major ports has shown steady decline during the five-year period starting from FY13 to FY17, except in FY15 when it increased slightly to 1.6 days from 1.5 days in FY14. However, PBDT declined again in FY16 to 1.3 days. Average turn-round time (TRT) has witnessed significant improvement since FY91 for all the major ports. Average TRT for major ports improved from 8.10 days in FY91 to 4.24 days in FY01 and further declined to 3.48 days in FY17. Amongst the major ports, the average TRT varied from 1.96 days for JNPT to 5.47 days for Haldia port in FY17. The improvement in efficiency can be attributed to initiatives taken by the government such as improving connectivity and logistics, automating ports and augmenting existing infrastructure facilities.

I - 21

Overview of the Indian Infrastructure Sector

Major ports witnessed improvement in key efficiency indicators

Source: Ministry of Shipping

Policy support Union Budget FY19 ƒ ƒ For the transportation sector, including rail, roads, aviation and shipping, allocation of ` 2.76 trillion has been made. Other policy measures ƒ ƒ Sagarmala - More than 577 projects at an estimated investment of ` 8.57 trillion have been identified for implementation during 2015-2035, across the areas of port modernization & new port development, port connectivity enhancement, port-linked industrialization and coastal community development. As of March 31, 2018, a total of 492 projects at an investment of around ` 4.3 trillion were under various stages of implementation, development and completion. ƒ ƒ A new berthing policy for dry bulk cargo for all major ports was rolled out in 2016 to drive higher cargo throughput from major ports. ƒ ƒ A new stevedoring and shore handling policy, 2016 was implemented for all major ports with a view to increase operational efficiency of ports. ƒ ƒ In order to increase investments into the port sector, the government has revisedModel Concession Agreement (MCA) for PPP projects in major ports. ƒ ƒ The Government has allowed 100% FDI in the shipping sector. 100% FDI is also allowed under the automatic route for projects related to the construction and maintenance of ports and harbours. ƒ ƒ Project UNNATI has been initiated to identify the opportunity areas in each of the major ports as well as underlying reasons for performance bottlenecks. Under the project, 116 initiatives were identified out of which 86 initiatives have been implemented as of March 2018. ƒ ƒ In January 2018, the government has approved the implementation of Jal Marg Vikas Project (JMVP) for capacity augmentation of navigation on National Waterway – 1 at an investment of ` 53.7 bn with the technical assistance and investment support of World Bank. The project is expected to be completed by 2023.

I - 22

Overview of the Indian Infrastructure Sector

ƒ ƒ The government has approved the listing of Garden Reach Shipbuilders & Engineers Ltd and Mazagaon Dock Shipbuilders Ltd on stock exchanges.

The way ahead With increasing investment in port infrastructure, the outlook for Indian ports sector looks positive in the coming years. As per the report of the National Transport Development Policy Committee, projected cargo traffic to be handled by Indian ports by 2021-22 is expected to be 1,695 MT, an increase of 561 MT from 2016-17. For this, additional cargo handling capacity of 901 mn metric tonnes will required to be created in Indian ports in the coming years. In order to augment port infrastructure, Ministry of Shipping has initiated National Maritime Development Policy (NMDP) with a planned outlay of US$ 15 bn. Further, port projects involving investment of over US$ 10 bn have been identified for award for the coming years. Small port industrial cities and industrial clusters are also proposed to be developed at select ports. All these measures along with the implementation of Sagarmala project are expected to give big push to the ports infrastructure going forward.

I - 23

Overview of the Indian Infrastructure Sector

Aviation

India is the 9th largest aviation market in the world with a size of around US$ 16 bn. Its domestic air passenger traffic crossed the 100 mn mark in 2017. Although India is currently the fastest growing aviation market, it is under-penetrated with 0.04 trips per capita per annum as compared to 0.3 in China and more than 2 in the US (2016). However, the sector has huge growth potential, owing to rapid economic growth and rising disposable incomes. Current status India presently has 464 airports and airstrips, of which 126 are managed by the Airports Authority of India (AAI).

Air traffic at all Indian airports

Growth in passenger traffic

Growth in freight traffic

Source: Airport Authority of India (AAI)

Indian airports registered a passenger traffic of 308.75 mn in FY18 up by about 16.5% y-o-y. The growth in passenger traffic was largely driven by a significant increase in domestic traffic which grew by 18.3% y-o-y to 243.3 mn in FY18. On the other hand, international traffic registered a growth of 10.4% y-o-y to 65.5 mn in FY18. The international and domestic freight traffic registered a y-o-y growth of 15.6% and 8% respectively during FY18. This led total freight traffic to increase by 12.7% to 3.4 mn tonnes in FY18. International freight traffic as a percentage of total freight traffic has remained in a range of ~60-64% in the last five years.

I - 24

Overview of the Indian Infrastructure Sector

The total aircraft movement witnessed an increase of 13.4% y-o-y to 2.3 mn in FY18. The sharp growth in aircraft movement was primarily led by substantial increase in domestic aircraft movements which registered a growth of 14.4% y-o-y to 1.9 mn during FY18. International aircraft movements grew by 9.4% y-o-y to 0.4 mn in FY18.

Top 5 airports in India by passenger traffic volume (international + domestic) (in mn)

Top 5 airports in India by freight traffic volume (international + domestic) (in MT)

City

FY18

FY17

% growth

City

FY18

FY17

% growth

Delhi

65.7

57.7

13.8 Delhi

9,63,032

8,57,419

12.3

Mumbai

48.5

45.2

7.4 Mumbai

9,06,321

7,82,289

15.9

Bengaluru

26.9

22.9

17.6 Chennai

4,17,787

3,59,217

16.3

Chennai

20.4

18.4

10.9 Bengaluru

3,48,403

3,19,344

9.1

Kolkata

19.9

15.8

25.7 Kolkata

1,63,323

1,52,415

7.2

Source: AAI

Recent development ƒ ƒ The government has given in-principle approval for the disinvestment of Air India and five of its subsidiaries. ƒ ƒ The construction of the Navi Mumbai airport has been initiated for a minimum capacity of 60 mn passengers per annum, with the capacity of the first phase pegged at 10 mn passengers per annum. ƒ ƒ The government of Andhra Pradesh signed a concession agreement with SCL-Turbo consortium of Nellore International Airport Pvt Ltd for the development of greenfield airport in Dagadarthi in Nellore district.

Policy support Union Budget 2018-19 ƒ ƒ Outlay of ` 40.9 bn has been proposed in FY19 as against ` 26.9 bn (RE) in FY18.

ƒ ƒ Proposal to expand airport capacity more than five times to handle a billion trips a year under a new initiative – NABH Nirman; the balance sheet of Airport Authority of India to be leveraged to raise more resources for funding this expansion. Other key measures ƒ ƒ In May 2018, the government approved the expansion and upgradation of integrated terminals at Chennai, Guwahati and Lucknow airports at an investment of ` 24.7 bn, ` 13.8 bn and ` 12.3 bn, respectively. ƒ ƒ In April 2017, the government approved the revival of 50 un-served/under-served airports or airstrips of state governments, Airports Authority of India and civil enclaves in three financial years, starting from FY18. The total investment of the project is estimated to be ` 45 bn. ƒ ƒ 100% FDI is allowed under automatic route for both greenfield as well as brownfield projects.

I - 25

Overview of the Indian Infrastructure Sector

ƒ ƒ Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik) has been initiated by the government to connect 56 unserved airports and 31 unserved helipads across the country. Operations have already started at 16 such airports. ƒ ƒ The government has unveiled the National Civil Aviation Policy 2016 to provide safe, secure, affordable and sustainable air travel for passengers and air transportation of cargo with access to various parts of India and the world. ƒ ƒ MRO, ground handling, cargo and ATF infrastructure facilities co-located at an airport, (including heliport licensed by DGCA) are covered under the ‘Harmonised List of Infrastructure and will get the benefit of ‘infrastructure’ sector. ƒ ƒ AAI plans to invest ` 150 bn in FY19 for expanding existing terminals and constructing 15 new ones. The way ahead India’s aviation sector has huge growth potential. The country is projected to become the third largest aviation market by 2020, and is expected to cater to 478 mn passengers by 2036. This potential growth can be achieved through airport expansion, low cost carriers, increased private investment, increased FDI flows in the sector and improved regional connectivity. The Airport Authority of India aims to bring around 250 airports under operation across the country by 2020. In view of reiterated commitment by the government towards aviation infrastructure development, the sector is likely to see an investment totalling US$ 15 bn during 2016-2020.

I - 26

Overview of the Indian Infrastructure Sector

Logistics

Logistics involves themanagement of flowof goods fromtheir point of origin to the point of consumption. This includes various activities such as transportation, inventory management, warehousing, material handling & packaging, etc. As per the Economic Survey of 2017-18, the Indian logistics industry is worth around US$ 160 bn and has registered a CAGR of 7.8% in the last five years. The sector provides employment to more than 22 mn people. The government aims to reduce the logistics cost in India from the present 14% of GDP to less than 10% by the year 2022.

Logistics Performance Index (LPI) – India The Logistics Performance Index, published by the World Bank Group serves as a global benchmarking reference for featuring logistic performance across countries. India had jumped almost 19 places to LPI ranking of 35 in 2016 from LPI ranking of 54 in 2014. However, India’s ranking has deteriorated since then, with its overall LPI ranking dropping to 44 in 2018. While India’s ranking has deteriorated on all parameters, its ranking for infrastructure has declined by almost 16 points to 52 in 2018. India’s overall LPI score has declined to 3.18 in 2018 from 3.42 in 2016.

I - 27

Overview of the Indian Infrastructure Sector

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108 Page 109 Page 110 Page 111 Page 112 Page 113 Page 114 Page 115 Page 116 Page 117 Page 118 Page 119 Page 120 Page 121 Page 122 Page 123 Page 124 Page 125 Page 126 Page 127 Page 128 Page 129 Page 130 Page 131 Page 132 Page 133 Page 134 Page 135 Page 136 Page 137 Page 138 Page 139 Page 140 Page 141 Page 142 Page 143 Page 144 Page 145 Page 146 Page 147 Page 148 Page 149 Page 150 Page 151 Page 152 Page 153 Page 154

Made with FlippingBook - professional solution for displaying marketing and sales documents online