Time to get to work

With a $1 trillion infrastructure investment plan identified for our Twelfth Five-Year Plan (2012-17), the mandate of $500 billion has to be fulfilled from private sources. After the Parliament session, Indian ministers have all gone into 'road-show' mode. Nine ministers have camped out at the US urging interest in India. First off the block was the INFRASTRUCTURE TODAY INDIA OPPORTUNITY conference, organised by ASAPP Media (publisher of CW) and US-based associate ASPIRE International Group Inc, held on September 16-17, 2011, at the Consulate General of India in New York. The mood sensed from the US investors was that of 'strong interest' but the prospect was not 'investor-friendly enough'.The year 2010 was record-breaking in terms of bilateral trade, with trade in goods up 30 per cent to a high of about $49 billion, moving India up two notches to become America's 12th largest trading partner. But, the US continues to watch from the sidelines - preferring to supply equipment and services rather than develop projects. Indeed, we need to showcase two dozen projects of the size, scale and quality of the T3 and Delhi Metro Rail Project to generate momentum amongst investors.Power is one of the biggest challenges holding up our GDP growth, and targets are constantly missed. The Power Minister is urging investment in the sector, but unless he can get the state electricity boards to be more accountable financially and coal availability can be normalised, we will miss the Twelfth Plan target. The most inclusive growth area that the government can provide for the Indian citizens is 'power for all'. This will enable equal opportunities that no amount of provisions by way of reservations can match. There are more than five UMPPs in the pipeline, for which special purpose vehicles (SPVs) have been created by the PFC.The world economy remains volatile with inflationary pressure and forex instability in emerging markets and unemployment, slackening demand and financial failures in developed markets. For its part, the Indian government has created its own problems and slackened its momentum on the project pipeline, leading to a slowdown in infrastructure growth. Only the road sector is likely to show robustness as it envisages over Rs 50,000 crore of investment for bids over 7,300 km this fiscal.The infrastructure paralysis is already hurting the industry as financial results will indicate in the second quarter. While input costs are soaring - cement, steel, labour, financial - project pipelines are tapering off. Delayed payments, unavailability of labour and delayed projects have eroded margins and have forced developers to bid for top lines irrespective of profitability leading to undercutting. Many road projects have fetched a premium for the NHAI owing to the absence of other projects on the table.The government needs to get down to work: on introduction of GST, a new national manufacturing policy, further liberalisation of FDI, liberalisation of retail, and strengthening financial markets for long-term investments.Long-term investment opportunities have opened up in the Delhi Mumbai Industrial Corridor and the Delhi Mumbai Dedicated Rail Freight Corridor, where nine mega industrial zones, each covering 200-250 sq km, as well as three ports and six airports in six states have been envisaged. These projects need to be put forth to investors in investible parcels with a single-window clearance.With the world economy topsy-turvy, domestic markets need to become vibrant with better road/rail/port/airport connectivity - and power switched on. This will pave the way for foreign investments as investor-friendly policies surface. Further, the momentum against corruption needs to evolve into making transparency an imperative. Infrastructure and construction are the hotbeds of corruption; to attract investments, the sector needs to clean up its act. Our cover story laments the rocky road of the infrastructure highway - it's time to cover the potholes, smoothen the obstacles and get to work!