Road construction to be most crucial, followed by affordable housing

01 Jul 2019 CW Staff

In these five years, the Government needs to focus on getting private-sector participation on board. As Jagannarayan Padmanabhan, Director, CRISIL Infrastructure Advisory, says, “It is about time we get the private sector’s active participation. And obviously, the other elephant in the room is bank credit and how to get it channelled to the private sector.”

The Government is likely to focus on the programmes initiated during its earlier term like Bharatmala, Sagarmala, smart cities, AMRUT and Namami Gange. The roads sector is expected to be the most crucial, followed by affordable housing. Smart cities have not quite taken off as they require funding from states and municipalities but have the potential to forge strong backward linkages with the rest of the economy. While irrigation will see limited contribution from the Centre (though will remain high priority at the state level), water-related projects like inland waterways, river cleaning and water supply are expected to be other key focus areas.

Additionally, in the ICRA report, Shubham Jain, Group Head & Vice-President - Corporate Ratings, ICRA, mentions the opportunities that construction companies can look forward to in the next five years:

For roads, the manifesto mentions constructing 60,000 km of National Highways over the next five years, at an average rate of 12,000 km per year. Given that the pace of highway construction has grown significantly over the past four to five years (increasing from 4,410 km in FY2015 to 9,829 km in FY2018 and ~10,855 km in FY2019), with sizeable under-implementation projects, the target seems achievable.
For railways, the manifesto proposes a conversion of all viable rail tracks to broad gauge, electrification of all railway tracks, and completion of the two dedicated freight corridor projects (EDFC, and WDFC) by 2022. Further, large investment is also envisaged towards railway station modernisation across the country.
The aim is to increase metro-rail infrastructure to 50 cities from around 20 cities where the project has been approved so far.
With regard to airport infrastructure, the target is to double the number of functional airports from around 101 currently.
Similarly, port capacity is aimed to be doubled over the next five years and the Sagarmala project is to be fast-tracked.

SHRIYAL SETHUMADHAVAN

In these five years, the Government needs to focus on getting private-sector participation on board. As Jagannarayan Padmanabhan, Director, CRISIL Infrastructure Advisory, says, “It is about time we get the private sector’s active participation. And obviously, the other elephant in the room is bank credit and how to get it channelled to the private sector.” The Government is likely to focus on the programmes initiated during its earlier term like Bharatmala, Sagarmala, smart cities, AMRUT and Namami Gange. The roads sector is expected to be the most crucial, followed by affordable housing. Smart cities have not quite taken off as they require funding from states and municipalities but have the potential to forge strong backward linkages with the rest of the economy. While irrigation will see limited contribution from the Centre (though will remain high priority at the state level), water-related projects like inland waterways, river cleaning and water supply are expected to be other key focus areas. Additionally, in the ICRA report, Shubham Jain, Group Head & Vice-President - Corporate Ratings, ICRA, mentions the opportunities that construction companies can look forward to in the next five years: For roads, the manifesto mentions constructing 60,000 km of National Highways over the next five years, at an average rate of 12,000 km per year. Given that the pace of highway construction has grown significantly over the past four to five years (increasing from 4,410 km in FY2015 to 9,829 km in FY2018 and ~10,855 km in FY2019), with sizeable under-implementation projects, the target seems achievable. For railways, the manifesto proposes a conversion of all viable rail tracks to broad gauge, electrification of all railway tracks, and completion of the two dedicated freight corridor projects (EDFC, and WDFC) by 2022. Further, large investment is also envisaged towards railway station modernisation across the country. The aim is to increase metro-rail infrastructure to 50 cities from around 20 cities where the project has been approved so far. With regard to airport infrastructure, the target is to double the number of functional airports from around 101 currently. Similarly, port capacity is aimed to be doubled over the next five years and the Sagarmala project is to be fast-tracked. SHRIYAL SETHUMADHAVAN

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