planning commission, aranca research - ibef projects: tuni–ankapalli highway,...

Second largest road

network

• India has the second largest road network in the world, spanning a total of 4.7 million

kilometres. This is used to transport over 60 per cent of all goods in the country and 85 per

cent of total passenger traffic

Rising investments in

road sector • The Planning Commission of India aims to spend nearly 20 per cent of the total

investment of USD1 trillion during the 12th Five Year Plan (2012–17) to develop roads

Growing private sector

involvement • The private sector is emerging as a key player in the development of road infrastructure in

India

Rapid growth in national

highways • National highways are expected to reach 85,000 kilometres by the end of the 12th Five

Year Plan from 79,116 kilometres in FY 2013

Source: MoRTH Annual Report 2012-13,

Planning Commission, Aranca Research

Growing demand

Source: NHAI, MoRTH, Planning Commission, Business Monitor International, Aranca Research

Notes: NHAI - National Highways Authority of India, MoRTH - Ministry of Road Transport and Highways, E - Estimate

Robust demand

• Greater connectivity between different cities, towns and villages has led to increased road traffic over the years

• Growth in automobiles and freight movement commands a better road network in India

Attractive opportunities

• Roads and bridge infrastructure industry to be worth USD19.2 billion by FY17

• During FY14, around 8,270 km of the National Highways are to be improved along with construction/rehabilitation of 100 bridges and 4 bypasses

Policy support

• Road infrastructure is a key government priority; the sector has received strong budgetary support over the years

• Financial institutions have received government approval to raise money through tax-free bonds

Increasing investments

• USD1 trillion worth of expenditure on infrastructure is estimated over FY13–17

• Government of India aims to develop a total of 66,117 kilometres of roads

• Growing participation of private sector through Public-Private Partnership (PPP)

2009

Roads &

bridges

infrastructure

value:

USD6.9

billion

FY17E

Roads &

bridges

infrastructure

value:

USD19.2

billion

Advantage

India

Source: Ministry of Road, Transport and Highways

(MoRTH) – Annual Report 2012-13, Aranca Research

Roads

(Total length: 4.7 million Kms)

State Highways National Highways District and Rural Roads

Total Length: 155,716

kilometres

Share: 3.3 per cent of

the total roads in India

Total Length: 79,116

kilometres



Total Length: 44,55,010

kilometres



India has the second largest road network in the world (4.7 million kilometres)

Roads bear about 85 per cent of the country’s passenger traffic and 60 per cent of freight traffic

Length of national

highways (kilometres)

Passenger vehicle sales

(Million)

NHDP toll collection

(USD million)

Highway projects

awarded (kilometres) by

NHAI

Share of infrastructure in

total bank funding (%) 2.3

677

64.5

0.71

58,112

14.7

1,116

743.3*

2.7

79,116

FY03

FY13

Source: National Highway Authority of India (NHAI), National Highway Builders Foundation, ICRA Ltd, Reserve Bank of India (RBI)

Notes: FY - Indian Financial Year (April-March), NHDP - National Highway Development Project, Aranca Research; * - Data is target figure for toll

collection in 2012-2013

Roads/bridges infrastructure value in India

(USD billion)

The value of total roads and bridges infrastructure in India is

expected to grow at a CAGR of 17.4 per cent over FY12-17

to reach USD19 billion

Currently, the Government of India aims to develop a total

of 66,117 kilometres of roads under various programmes

such as NHDP, SARDP-NE and LWE

Of the total roads, 20,945 kilometres have been developed,

while a major share of the remaining is estimated to be

completed by the end of the 12th Five Year Plan

Source: Business Monitor International (BMI), Aranca Research

Notes: CAGR - Compounded Annual Growth Rate,

FY - Indian Financial Year (April - March), F - Stands for forecast,

NHDP - National Highway Development Project,

SARDP-NE: Special Accelerated Road Development Programme for

the North Eastern Region and LWE - Left Wing Extremism

Programme

6.9 6.8 8.3 8.6 8.6

11.0

13.4

16.1

19.2

FY09 FY10 FY11 FY12F FY13F FY14F FY15F FY16F FY17F

CAGR: 13.6%

Lane composition of national highways (FY13) National highways account for 1.7 per cent of the total road

network in India

Under the 12th Five Year Plan (FY13–17), the government

plans to develop 20 kilometres of national highways per

day, which implies a total development of 7,300 kilometres

per year

Double-lane highways constitute the largest share of

highways in India (40,658 kilometres)

Double-lane highways are followed by single/intermediate-

lane (19,330 kilometres) and four/six/eight-lane (19,128

kilometres) highways

National highways are expected to reach 85,000 kilometres

by the end of the 12th Five Year Plan from 79,116 kilometers

in FY13 Source: MoRTH, Aranca Research

24.4%

51.4%

24.2%

Single lane

Double lane

Four/ Six/ Eight Lane

The National Highway Authority of India (NHAI) is a government agency responsible for construction, maintenance and

development of highways

The Government of India has formulated a seven-phase programme known as ‘National Highway Development Project

(NHDP)’, vested with NHAI, for the development of national highways in the country

Porbandar

Mumbai

Kanyakumari

Chennai

Kolkata

Silchar

Delhi

Srinagar

North South –

East West

Corridor

Golden Quadrilateral

NHAI

Golden Quadrilateral (GQ): It is the highway network that connects four major

metropolises

North South & East West Corridor (NS – EW NHDP Phase I and II): It connects the

country’s extreme ends

NHDP Phase III to VII: Construction and improvement of roads in the remaining

urban and suburban regions

Source: NHAI, Aranca Research

NHDP phase Project description Total length

(Kms) Cost Development model

Phase I

Development of Golden Quadrilateral, North

South & East West (NS-EW) corridor, port

connectivity and other national highway 7,522 USD7.0 billion

EPC (Engineering-

Procurement and

Construction)

Phase II Development of North South & East West

(NS-EW) corridor and other national highway 6,647 USD7.2 billion EPC

Phase III Development of four lane national highways 12,109 USD18.5 billion PPP (Build-Operate-

Transfer)

Phase IV Upgradation of single lane to two-lane 20,000 - PPP


Note: PPP - Public Private Partnership

NHDP phase Project description Total length

(Kms) Cost Development model

Phase V Upgradation of four-lane highways to

six-lane and port connectivity 6,500 USD9.3 billion PPP

Phase VI Development of expressway 1,000 USD3.8 billion PPP-(Design-Build-

Finance-Operate)

Phase VII Development of ring roads, bypasses and

flyovers 700 USD4.2 billion

PPP (Build-Operate-

Transfer)



The Special Accelerated Road Development Programme for the North Eastern region (SARDP-NE) is aimed at developing

road connectivity between remote areas in the North Eastern region with state capitals and district headquarters

SARDP-NE is vested with the development of double-/four-lane national highways of about 4,798 kilometres and double-

laning/improving about 5,343 kilometres of state roads

Implementation of the road development programme will facilitate connectivity of 88 district headquarters in North Eastern

states to the nearest national highways

The project will be undertaken in three phases:

Phase Project description Total length

(Kms) Date of completion

A Improvement of national highways 2,041

March 2015 Improvement of state roads 2,058

B

Development of double-lane of national highways 1,285

Not Disclosed

Double-laning and improvement of state roads 2,438

Arunachal Pradesh package

of roads and highways Development of roads 2,319 March 2017

Source: NHAI, MoRTH, PPPinIndia, Aranca Research

Total length (Kms) Total cost (USD billion)

Approved 5,477 USD1.6

Awarded 5,049 USD1.5

Completed (By December 2012) 1,960 USD0.5

The government has approved a Road Requirement Plan (RRP) for the development of 1,126 kilometres of national highways

and 4,351 kilometres of state roads in Left Wing Extremism (LWE) affected districts

The project has been implemented in the states of Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh,

Maharashtra, Odisha and Uttar Pradesh for a total value of USD1.6 billion

The project will be vested with the Ministry of Road Transport and Highways (MoRTH) and is scheduled to be completed by

FY15

Source: NHAI, MoRTH, PPPinIndia, Aranca Research

As on 31 March 2012, India had 2,409 PPP projects across the infrastructure sector, of which 874 are dedicated towards

roads and highways

The BOT model’s share in total highway projects has increased sharply over the years; it rose to 31 per cent in FY10 from

10 per cent in FY05

Total PPP projects in India (March 2012) Composition of total highway projects awarded

8% 13% 15% 19% 22% 23%

9% 12% 12% 20% 20%

27%

4% 7% 9% 9% 17%

53%

FY05 FY06 FY07 FY08 FY09 FY10

BOT SPV Public Funded

Source: MoRTH, Aranca Research

36.3%

63.7%

Roads/NationalHighways

Others

369

464 470 877

2,677

6,144 6,067

1,116

0

1000

2000

3000

4000

5000

6000

7000

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13*

Awards won by BOT private players Road construction projects awarded to BOT companies

recorded a CAGR of 17.1 per cent over FY06-13.

The total projects awarded in FY13 by both NHAI and

Ministry of Road Transport & Highways is 1,933 km

CAGR: 17.1%

Source: NHAI, Crisil, Aranca Research

Note: FY13* - Projects awarded by NHAI

Source: Aranca Research

Note: NH – National Highway

Until 2005, the road construction market was dominated by public sector companies

However, the emergence of private players over the last decade has made the road construction market fragmented and

competitive; the players bidding for projects also vary by size

Major private sector players

Major projects: Mumbai–Pune BOT Project, Pune–Nashik BOT

Project, Bharuch–Surat BOT Project, Thane–Bhiwandi by-pass

Four-Lane Project, Thane Ghodbunder BOT Project

Major projects: North Karnataka Expressway, West Gujarat

Expressway, Noida Toll Bridge, Ahmedabad - Mehsana Toll Road,

East Coast Road, Kotakatta Kurnool Road Project

Major projects: NH6 Dhankuni to Kharagpur, Sambalpur Baragarh,

NH4 Belgaum Dharwad, NH-3 Pimpalgaon – Nashik – Gonde road

(JV with L&T), Jaora – Nayagaon Road

Major projects: Bandra–Worli Sea Link, Badarpur Elevated

Highway Project, Delhi Faridabad Elevated Expressway,

Breakwater construction for new port at Ennore, Chennai

Major projects: Tuni–Ankapalli Highway, Tambaram–Tindivanam

Highway, Ambala–Chandigarh Highway

Source: NHAI, MoRTH, Aranca Research

Note: FDI - Foreign Direct Investment

Increasing private

sector participation

• Government policy to increase private sector participation has proved to be a boon to the

infrastructure industry with a large number of private players entering the business through

the Public Private Partnership (PPP) model

• The type of PPP models used in road projects are Build Operate Transfer (BOT ) toll and

BOT annuity

Partnerships between

Indian and foreign firms

• With the Government of India permitting 100 per cent FDI in the road sector, most foreign

companies have formed partnerships with Indian players to participate in the sector’s

growth story

India’s renewed focus

on infrastructure

• Infrastructure is the key to supporting double-digit GDP growth in India during the medium-

to long-term

• The government has hence made infrastructure development a key policy issue and plans

to spend USD1.0 trillion during FY13-17 on the sector

Success of India’s Five

Year plans

• Through Five-Year Plans, India has increased the length of national highways from 21,378

kilometres during the late 1940s to 71,772 kilometres by the end of the 11th Five-Year Plan

(FY08-12)

• The total length of national highways is expected to touch 85,000 kilometres by the end of

12th Five Year Plan

Source: Aranca Research

Policy support

Greater government focus on

infrastructure

Standardised processes for

bidding and tolling; clear policy framework

Tax sops, FDI, FII encouragement

Rise in two-wheeler and four-wheeler

vehicles

Increasing investments

NHAI implementing one of the largest

road projects

Rising private sector participation

Strong projected demand making returns attractive

Inviting Resulting in

Increasing freight traffic

Strong trade and tourist flows

between states

Growing demand

Higher individual discretionary spending has led to increasing spending on cars, motorbikes and scooters

Growing domestic trade flows have led to rising commercial vehicles and freight movement

Road’s traffic share of the total traffic in India has grown from 13.8 per cent to 65 per cent in freight traffic and from 15.4

per cent to 90 per cent in passenger traffic from 1951 to 2011

Higher road traffic

Rising incomes leading to

increasing number of vehicle owners

Growing movement of goods within the

country due to economic integration

Better quality roads makes road travel cheaper and safer

Increasing roadways leading to greater accessibility between different

cities/towns/villages

Growth in small and medium enterprises

in India

Source: MoRTH, World Bank, Aranca Research

490

384

533

685

810 793

857

0

100

200

300

400

500

600

700

800

900

FY08 FY09 FY10 FY11 FY12 FY13 FY14E

1.5 1.6

2.0

2.5 2.6 2.7

2.8

0.0

0.5

1.0

1.5

2.0

2.5

3.0

FY08 FY09 FY10 FY11 FY12 FY13 FY14E

Trends in passenger vehicle sales (in million)

Total auto sales across categories are estimated to rise 6-8 per cent in FY14 with passenger vehicles growing by 5-7 per

cent and commercial vehicles growing by 7-9 per cent in FY14

Sales of passenger vehicles are expected to increase at a CAGR of 10.7 per cent to 2.8 million during FY08-14

Sales of commercial vehicles are expected to rise at a CAGR of 9.7 per cent to 8,57,000 during FY08-14

Rising per-capita income and growing middle class coupled with easier access to finance and a wider price range of

vehicles have led to boosted car sales

Trends in commercial vehicle sales (in ’000)

Source: SIAM, Aranca Research

Note: E: SIAM Estimates

CAGR: 10.7%

CAGR: 9.7%

Length of National Highway added in the various

Five-Year Plans (kilometres)

Road addition in the 3rd Five Year Plan was only 179

kilometres, this increased to 10,228 kilometres in the 11th

Plan


Note: * - Estimated

The overall physical target for development of National

Highways as included in the 12th Five Year Plan

Scheme Target

Widening to 2-lane (km) 14,800



Strengthening/Improvement of Riding Quality Programme (IRQP) (km)

8,500

Construction of bridges (in No’s) 50

Construction of bypasses (in No’s) 5

0

1514

179

4819

158

2867

1902 609

23814

9008 10228

36500

0

5000

10000

15000

20000

25000

30000

35000

40000

1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th*

Share of infrastructure in total bank funding Infrastructure is a priority of the government’s economic

policy; funding for the sector from both private and public

sectors is set to increase sharply in the near term

Infrastructure’s total share in bank funding rose from 2.3 per

cent in 2002 to about 14.6 per cent in 2012

Source: RBI, ICRA Limited, Aranca Research

Note: 2013* - September 2013

2.3% 3.5%

4.2%

6.9%

7.5%

7.3%

8.5% 9.5%

11.5%

14.0%

14.6%

15.0%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013*

Combined gross fiscal deficit of the centre and

state governments (% of GDP)

The government has been eager to involve private sector

funding for infrastructure projects and thereby reduce

strains on the budget

The PPP model has emerged as the favoured one for

private sector participation in roads projects


Source: RBI, Aranca Research

Note: E – RBI Estimates (Median Forecast)

9.6% 9.3%

8.3%

7.2% 6.5%

5.1%

4.0%

8.3%

9.3%

6.9%

8.1%

7.2%

7.0%

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY 14E

% of BOT share in different phases of NHDP Phase I and Phase II of NHDP were mostly developed by

public funds with the BOT share at 14.8 per cent and 28.6

per cent respectively

Public Private Partnership (PPP) model will be the favoured

way of executing the remaining NHDP phases

14.8%

29.6%

95.9%

83.1%

100.0%

100.0%

100.0%

Phase I

Phase II

Phase III

Phase IV

Phase V

Phase VI

Phase VII


Notes: NHDP - National Highway Development Phase,

BOT - Build Operate Transfer

Source: Aranca Research,

Note: FII - Foreign Institutional Investors

Infrastructure is a key

government priority

• Infrastructure investment is a major focus area for the government

• The Government targeted USD500 billion worth of spending on infrastructure in the 11th

Five-Year Plan (FY08-12); the amount is set to double to USD1 trillion in the 12th Five

Year Plan (FY13-17)

Support from the Union

Budget

• The FII investment limit in infrastructure corporate bonds was raised from USD5 billion to

USD25 billion in the Union Budget

• An increase in road development fund was also announced

• The Indian government plans to establish a Road Regulator Authority in FY14 to address

financial issues, construction risk and contract management in the road sector

Rural development

• The Prime Minister’s Gram Sadak Yojana (PMGSY) is a scheme for development of rural

roads in India

• The Construction of Rural Roads Project (CRRP) is another initiative focused on rural

development

Taxes and other sops

• Companies enjoy 100 per cent tax exemption in road projects for five years and 30 per

cent relief for the next five years

• The companies are also granted a capital of up to 40 per cent of the total project cost to

enhance viability

Issue of tax-free

infrastructure bonds

• Infrastructure finance companies, such as India Infrastructure Finance Corporation

(IIFCL), National Highways Authority of India (NHAI), Housing and Urban Development

Corp (HUDCO), Power Finance Corporation (PFC) and India Railway Finance Corporation

(IRFC), have been allowed to issue tax-free bonds for a total value of USD9.2 billion for

FY14

• Institutions were allowed to raise tax-free bonds of about USD5.5 billion in FY12 and up to

USD4.6 billion in FY13

Encouragement of

Infrastructure Debt

Funds (IDFs)

• The Government of India has set up the India Infrastructure Finance Company (IIFCL) to

provide long-term funding for infrastructure projects

• Interest payments on external commercial borrowings for infrastructure are now subject to

a lower withholding tax of 5 per cent vis-à-vis 20 per cent earlier

• IDF income is exempt from income tax

Central Road Fund

(CRF)

• The Central Road Fund (CRF) assists the state government and union territories in the

development of state roads

• For FY13, USD3.6 billion was allocated for the development of roads

For updated information, please visit www.ibef.org


Note: BOT - Build Operate Transfer

Project Length

(kilometre)

Cost (USD

million) Company

Vadodara-Surat Section 6.74 86.94 HCC Concessions Ltd

Walajapet-Poonamalee 93.00 236.63 ESSEL Infra Projects Ltd

4 Laning of Coimbatore- Mettupalayam 53.93 108.76 Transstroy-OJSC Consortium

4-Laning of Goa/Karnataka Border-Kundapur Section 187.24 304.06 IRB Infrastructure Developers Ltd

Four lanning of Walayar - Vadakkancherry section 54.00 125.30 KNR Constructions

2-Lane with paved shoulder with provision of Capacity

Augmentation of Rajasthan Border-Fatehpur-Salasar Section 154.14 97.39 Galfar Engineering Contracting SAOG

4-Laning of Kashipur-Sitarganj Section 77.20 111.31 Galfar Engineering Contracting SAOG

4-Laning of Rajsamand - Gangapur-Bhilwara 87.25 124.53 Sadbhav Engineering Limited

4-Laning of Rohtak - Hissar Section 98.81 176.24 Sadbhav Engg. Limited

4-Laning of Khed - Sinnar Section 137.95 247.69 IL&FS Transportation Networks Ltd

For updated information, please visit www.ibef.org

Outlay for roads under respective Union Budgets

(USD billion)

Roadways has been a key focus area of budget allocations

over the years

For FY14, the Planning Commission has provided an outlay

of USD6.9 billion for the road sector

The budget outlay for road transport and highways

increased at a robust CAGR of 19.4 per cent between FY09

and FY14

In FY14, the government plans to improve about 8,270

kilometers of the National Highways along with

construction/rehabilitation of 100 bridges and four bypasses

for an estimated cost of USD4.3 billion

2.8

3.5

3.2

5.6 6.4

6.9


Source: Respective Union Budgets, Aranca Research

Note: CAGR - Cumulative Annual Growth Rate

CAGR: 19.8%

96

176 201

256 259

134

0

50

100

150

200

250

300

FY09 FY10 FY11 FY12 FY13 FY14*

Toll revenue: IRB Infrastructure Limited

(USD million)

IRB Infrastructure is one of India’s leading BOT operators

with a built-length of around 7,479 lane kilometres

Aggregate size of company’s BOT portfolio is USD3.5 billion

as on March 2013.

The company has 18 BOT projects currently, of which 15

are operational

As on 30 September 2013, IRB Infrastructure’s order book

stood at USD1.2 billion

Source: Company Annual Report & Corporate Presentation, Aranca Research



* - H1 FY14

CAGR: 28.2%

Won three road

projects worth

USD411 million

Won first ultra-mega

NHAI road project

worth USD750 million

Received financial

closure for

Ahmedabad Vadodara

Project

2010

2011

2012

2013

Signed contract with

NHAI for four-laning

of NH-17 from Goa/

Karnataka to

Kundapur

Acquired MVR

Infrastructure and

Tollways Pvt Ltd

Source: Company Annual Report, Aranca Research

255

502

843

1,168 1,222

0

200

400

600

800

1,000

1,200

1,400

FY09 FY10 FY11 FY12 FY13

Revenue trends: IL&FS Transportation

Networks Limited (USD million)

ITNL has the largest BOT road asset portfolio (in terms of

lane kilometres) in India, with presence in 17 states in India

The company has 13,161 lane kilometres under its road

asset portfolio; this comprises 26 BOT road projects

ITNL has 24 PPP projects currently, of which 11 are

complete and 13 under construction

Source: Company Website, Company Annual Report, Aranca Research



CAGR: 47.9%

Was awarded

order for 1,086 lane

kilometres for a

total value of

USD1.5 billion

Was awarded order

for 1,129 lane

kilometres for a total

value of USD1.5

billion

Four-laning of Beawer-

Gomti Road Project

2010

2011

2012

2013

Won USD312 million

contract for six-laning

Barwa-Adda-

Panagarh sector of

National Highway 2


16.6 17.2

17.9

18.9

19.9 19.8

14

15

16

17

18

19

20

21


Revenue trends: Noida Toll Bridge

(USD million)

Infrastructure Leasing and Financial Services Ltd (IL&FS)

promoted National Toll Bridge Company Limited (NTBCL)

as a special purpose vehicle (SPV) for the development of

the 22-km Delhi-Noida Direct (DND) flyway on a Build Own

Operate Transfer (BOOT) basis

Incorporated in Uttar Pradesh, India in 1996, NTBCL is a

publicly listed company and operates only in India


Salient features:

• Eight-lane dual carriageway connecting Noida and

Delhi

• One major and three minor bridges over Yamuna

river

• Eight-lane approach road on embankment

• 31-lane, 200m-wide, fully computerised toll plaza

• Extensive tree planting and landscaping

• Noise barriers and river training works

CAGR: 3.6%

Projects to be awarded (in kilometres)

National Highway Authority of India (NHAI) aims to award 2,500 kilometres of projects in FY14 vis-à-vis 1,116 kilometres

during the last fiscal

As on September 2013, around 12,310 kilometres of NHDP projects are in the pipeline, with the highest share for NHDP III

(4,732 kilometres)

Projects to be awarded (in kilometres) by NHDP phases

(as on September 2013)


Notes: NHDP stands for National Highways Development Project, E - Estimate

372

1,685

10,316

2,420

659

NS - EW Ph. I& II

NHDP III NHDP IV NHDP V NHDP VII

6,491

1,116

2,500

3,899

FY12 FY13 FY14E FY15E

PPP opportunity over the next five years Development of national highways through Public-Private

Partnership (PPP) is expected to remain the key focus area

for the government

During the next five years, investments through PPP are

expected to be over USD41 billion for national highways

and around USD10 billion for state highways


USD 41.2 billion

USD 9.9 billion

National Highways State Highways

Projected growth of vehicles In India, roads remain the most important means of

transport; it accounts for around 85 per cent of passenger

traffic and 60 per cent of freight traffic

Passenger cars are expected to grow at a CAGR of 15 per

cent to 677 million in FY15 and LCV to grow at a CAGR of

21 per cent over FY10-15 to 3 million in FY15

Source: SIAM Report, Aranca Research

Notes: PC - Passenger Cars, LCV - Light Commercial Vehicles,

SIAM - Society of Indian Automobile Manufacturers

0

150

300

450

600

750

1

1.5

2

2.5

3

3.5

FY10 FY11E FY12E FY13E FY14E FY15E

LCV units in 000s (right axis) PC units millions (left axis)

Summary of foreign contract awards Foreign contractors were awarded projects worth about

USD1.69 billion during 1999-2011; Malaysian and Russian*

contractors have topped the foreign contractors list

About 55 per cent of all such contracts were funded via

BOT, BOT-Annuity and BOT-SPV routes

A joint venture between SVBTG Consortium (USA) and

Stradcom Corp (Philippines) had won the largest contract

during that period (project cost of USD134 million)


Notes: BOT - Build Operate Transfer,

* - Russian joint venture with Indian firm

688

339

199

137 134 101

48 41

568

429

105 149

6

107 45 51

Ma

laysia

n

Russia

*

Chin

a

Russia

n

US

A

Ta

iwan

S.

Kore

an

Indo

nesia

n

Project Cost (USD mn) Length (kms)

Source: NHAI, MoRTH, Union Budget, Aranca Research

Notes: FDI - Foreign Direct Investment, FII - Foreign Institutional Investor; EPC - Engineering, Procurement and Construction;

ECB - External Commercial Borrowings; WHT - Withholding Tax; DDT - Dividend Distribution Tax

Significant potential for

construction & EPC

companies

• About two-thirds of NHDP road

projects (ex-phase IV) are yet

to be awarded, thereby offering

a huge opportunity for private

players over the next five

years.

• For the 12th Five Year Plan, the

government targets to develop

National Highways at the rate

of 20 km per day

• India’s construction sector is

expected to grow at about 35

per cent over FY09-13

Strong focus on infrastructure

• Infrastructure spending is

expected to touch USD1 trillion

in the next Five-Year Plan

(FY13-17)

• Union Budget FY14 allows

financial institutions to raise

USD9.2 billion from tax-free

bonds

• The budget also proposed key

steps such as relaxing ECB

guidelines, removal of

cascading effect of DDT and

reductions in WHT

Major government initiatives

to boost private and foreign

investment

• Increased FII limit in

infrastructure corporate bonds

from USD5 billion to USD25

billion in FY12 is a step in the

right direction

• Cumulative FDI inflow for

FY2000–13 (August) in

construction development and

infrastructure sector (including

roads and highways) stood at

USD24.95 billion

Ministry of Roads Transport and Highways Transport Bhavan

1, Parliament Street

New Delhi –110001

Phone: 91-11-23719097, 23719955

E-mail: [email protected]

National Highway Authority of India G 5 and 6, Sector 10, Dwarka

New Delhi – 110 075

Phone: 91-11-25074100, 25074200

Fax: 91-11-25093507, 25093514

Indian Roads Congress Sector 6, (Near RBI Quarters), RK Puram, New Delhi – 110022

Phone: 91-11-26185303

Secretariat: 91-11-26716778, 26183669, 26185273, 26185315,

26185319

Fax: 91-11-26183669

E-mail: [email protected]

BOT: Build Operate Transfer

CAGR: Compound Annual Growth Rate

EPC: Engineering, Procurement and Construction

FDI: Foreign Direct Investment

FY: Indian Financial year (April to March) – So FY10 implies April 2009 to March 2010

GOI: Government of India

INR: Indian Rupee

LCV: Light Commercial Vehicles

MoRTH: Ministry of Roads Transport and Highways

NH: National Highway

NHAI: National Highway Authority of India

NHDP: National Highway Development Project

USD: US Dollar – Conversion rate used: USD1= INR54.43

Year INR equivalent of one USD

2004-05 44.95

2005-06 44.28

2006-07 45.28

2007-08 40.24

2008-09 45.91

2009-10 47.41

2010-11 45.57

2011-12 47.94

2012-13 54.31

2013-14 59.23

Exchange rates (Fiscal year)

Year INR equivalent of one USD

2005 45.55

2006 44.34

2007 39.45

2008 49.21

2009 46.76

2010 45.32

2011 45.64

2012 54.69

2013 54.45

Exchange rates (Calendar year)

Average of the year

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