Infrastructure Planning and

Management
Transportation, Power and Telecom
Infrastructure
Agenda
With a focus on the transportation, power
and telecom sectors, we’ll discuss:
 The need for infrastructure
 Recent and ongoing schemes/projects
 Performance of schemes, and learnings
What is India doing?
 Increased Funding
 PMAY
 AMRUT
 Smart Cities
 NHDP

 Reforms
 Decentralization
 Increasing Accountability, Transparency
 Improving efficiency of existing services
 Inclusivity
 Introducing and Encouraging Private Sector Participation in
almost all sectors
The need for infrastructure
planning in Transportation
 Transport investment is a response to emerging
demand, but it is also an economic growth driver in itself.

 Divided into multiple categories:

 Railways
 Roads and road Transport
 Civil Aviation
 Ports and Shipping
 Urban Transport
 Transport development in the north east
The need for infrastructure
planning in Transportation
 Total freight traffic is expected to grow
at 9.7 per cent per annum to reach
over 13,000 BTKM in 2031-32 from
about 2,000 BTKM in 2011-12.

 Rail and road freight traffic are

projected to grow at about 12% and
8% per annum respectively to achieve
a 50:50 in total freight traffic by 2032.

 Total passenger traffic is expected to grow at about 15 per cent per annum
to reach 168,875 bpkm in 2031-32 from 10,375 bpkm in 2011-12.

 Growth in rail passenger traffic is expected to be around 9 per cent per

annum, and for road traffic, 15.4 per cent.
The need for infrastructure
planning in Transportation
 Passenger throughput at Indian airports during 2011-
2012 was 162 million. Freight traffic at 2.28 MMT in 2012
increasing at a CAGR of about 9.2% in the last 11 years

 During 2011-12, total cargo handled by Major and non-

major ports was 914 million tonnes witnessing an overall
traffic CAGR of 8.6%.

 By the 2011 census, 468 Class I urban agglomerations/

cities constitute more than 70 per cent of the urban
population
Recent and ongoing schemes/
projects - Transportation
 Constitution of National Transport Development Policy
Committee (NTDPC) in 2010.

 Dedicated Freight Corridors (DFCs), are envisaged to augment

rail freight transportation capacity.

 Improving port connectivity by launching the National Rail Vikas

Yojana (National Railway Development Program).

 NHDP and the Pradhan Mantri Gram Sadak Yojana (PMGSY) to

improve quality and connectivity of roads at different levels.
 NHDP at a Glance (www.nhai.org)
Indicative Cost
Phase Particulars Length
(Crores)
NHDP-I Balance work of GQ and
13,000 42,000
& II EW-NS corridors
NHDP-
4-laning 10,000 55,000
III
NHDP-
2-laning 20,000 25,000
IV
NHDP-
6-laning of selected stretches 5,000 17,500
V
NHDP-
Development of expressways 1,000 15,000
VI
Ring Roads, Bypasses,
NHDP-
Grade Separators, Service N.A. 15,000
VII
Roads etc.

Total 45,000 1,69,500

Recent and ongoing schemes/
projects - Transportation
 Sustainable Urban Transport Project

 Accelerated Road Development Program for the North East

Region.

 Financing the development and maintenance of roads by creating a

Central Road Fund (CRF) through an earmarked tax on diesel and
petrol.
Recent and ongoing schemes/
projects - Transportation
 Initiation of the National Maritime Development Program (NMDP).

 Privatization and expansion of the Mumbai and New Delhi Airports

and development of new international airports at Hyderabad and
Bangalore.

 Enhancing sector capacity and improving efficiencies through

clear policy directive for greater private sector participation. Large
parts of the NHDP and NMDP are to be executed through public
private partnerships (PPP).
Government Reforms
 NHAI given more independence
 Roaddevelopment has picked up since NHAI
was created and NHDP was formed
 100% FDI permitted
 100% income tax exemption for a period
of 10 years
 Automatic tolling to reduce operational
costs on toll-roads
 Planning for Expressways in 11th plan
Private Sector Participation in
Roads
 Toll collection for Revenues
 Government subsidies
 Shadow tolls
 Annuities (done in India)
 Viability Gap subsidies (done in India)
 Subsidy-based bids
Issues with Roads
 Land Acquisition

 Environmental and Societal Concerns

 Ridership concerns, Tariffs

 Financing
 Cess,
 Government funds
 Tolls
NHAI Website
Performance of schemes and
learnings - Transportation
Key Issues:
 Roads are congested and of poor quality
 Rural areas have poor access
 The railways are facing severe capacity constraints
 Urban centres are severely congested
 Ports are congested and inefficient
 Airport infrastructure is strained
 Interconnected, hierarchical transport network is absent
 Causality and timeliness of transport network
 Rebalancing and capacity of transport networks
Performance of schemes and
learnings - Transportation
 Funding methods for different transportation modes can be
different.

 Pricing of transport infrastructure is very complex.

 Urban Transport needs to be more formal with proper study being

done into feasibility of it’s effectiveness.

 Governance and Institutions should be updated to facilitate

intermodal operation.
Performance of schemes and
learnings - Transportation
 Skills and Human Resources with specific knowledge are urgently
required.
REQUIREMENTS:
 Hierarchical connectivity, intermodal access and fit-for-purpose network
standards should be emphasised.
 Infrastructure should be programmed in anticipation of future demand.
 Investment should be made for significant capacity augmentation of the
railways.
 While retaining the role for the government in infrastructure funding, private
investment must be stepped up.
 More sophisticated and less distortionary pricing policies must be developed.
 The severe shortage of skilled transport professionals must be addressed
forthwith.
Railways
1. Increase the utilization of existing capacity
(bogeys) by cutting costs
2. Tie up with private players to run trains, depots
to improve quality
3. Offer Volume based discounts to boost sales
4. Develop owned land
5. Computerize operations to improve
transparency and efficiency
6. Lower passenger prices
The Power Sector
Power generation modes

•Thermal
•Hydro
•Nuclear
•Renewable
Power in India – a timeline
 Before Independence – 65% private sector
involvement
 1950-1975: Public sector involvement and
growth of SEB’s
 1975-1991: More central involvement. Setting up
of NHPC, NTPC, NPTC
 Post 1991: Liberalization and private
involvement
The need for infrastructure
planning in Power
 Installed capacity of 303 GW as of 30 June, 2016, with Renewable
Power plants constituted 28% of total installed capacity.
 The gross electricity generated by utilities is 1,106 TWh
(1,106,000 GWh) and 166 TWh by captive power plants during the
2014–15 fiscal.
 India became the world's third largest producer of electricity in the
year 2013.
 During the year 2014-15, the per capita electricity generation in India
was 1,010 kWh with total electricity consumption (utilities and non
utilities) of 746 kWh per capita electricity consumption.
 Power sector is mainly divided into 3 categories:
 Generation
 Transmission
 Distribution
The need for infrastructure
planning in Power
 During the fiscal year 2015-16, the electricity generated in utility
sector is 1,090,851 billion KWh with a short fall of requirement by
23.557 billion KWh (~2.1%).
 The peak load met was 148,463 MW with a short fall of requirement
by 4,903 MW (~3.3%).
 India's Central Electricity Authority anticipated for the 2016–17 fiscal
year, a base load energy surplus and peaking surplus to be 1.1%
and 2.6% respectively.
The need for infrastructure
planning in Power
 Of the 1.4 billion people in the world who have no access to
electricity, India accounts for over 300 million.
 The International Energy Agency estimates India will add between
600 GW to 1,200 GW of additional new power generation capacity.
 Some 800 million Indians use traditional fuels for cooking and
general heating needs. Reports by the World Health Organisation,
claim about 400,000 people in India die of indoor air pollution and
carbon monoxide poisoning every year because of biomass burning
and use of chullahs.
 Other drivers for India's electricity sector are its rapidly growing
economy, rising exports, improving infrastructure and increasing
household incomes.
 As of 30 September 2015, 97.2% of 597,464 villages in India are
electrified.
State of Affairs
 Average RoI for SEBs = -26%
 Subsidies, high costs of production and captive plants
play a role here
 AT&C losses to the tune of 40%
 Total Energy deficit is 10%
 45% households do not have access to electricity
 Weekly power holidays, factory closures
 Peak demand will grow by 8%
 Not enough generation capacity to meet our
needs
Recent and ongoing schemes/
projects - Power
 In March 2019, GoI has launched a scheme called "Power for All".

 India's Ministry of Power launched Deen Dayal Upadhyaya Gram

Jyoti Yojana (DDUGJY) as one of its flagship programme in July
2015.

 The earlier scheme for rural electrification viz. Rajiv Gandhi

Grameen Vidyutikaran Yojana (RGGVY) has been subsumed in
the new scheme as its rural electrification component.

 Bachat Lamp Yojana was launched in 2009 to reduce the cost of

compact fluorescent lamps.

 Ujwal DISCOM Assurance Yojana (UDAY) to turnaround

DISCOMs. UDAY bonds worth about ₹1 lakh crore issued.
Recent and ongoing schemes/
projects - Power
 Mobile Apps for greater accountability and transparency:
 Grameen Vidyutikaran (GRAV) app to track rural electrification.
 Vidyut PRAVAH app to track real time electricity price and availability.
 Unnat Jyoti by Affordable LEDs for all (UJALA) app to monitor LED
distribution.
 Tariff policy for promoting hydropower:
 Hydro is excluded from Renewable Purchase Obligation (RPO)
 Allow developers flexibility in depreciation rate
 Time of Day tariff allowed for power generators
 Allow Distribution Licensees to extend long term PPA beyond 35 years
 Exemption for Hydro projects from competitive bidding till 2022
 Revival of Gas based power plants through Re-gasified Liquefied
Natural Gas (RLNG) sold through e-auction in 2015.
 Integrated Power Development Scheme (IPDS)
Recent and ongoing schemes/
projects - Power
 Restructured-Accelerated Power Development and Reforms
Programme (R-APDRP).
 Renewable Energy Projects included in Priority Sector Lending
Norms to ease bank financing.
 Solar plants classified as white from green category to ease
environmental clearances.
 Re-Invest 2015, world’s largest renewable financing meet.
 Setup of National Offshore Wind Energy policy to develop
Exclusive Economic Zone (EEZ) upto 200 nautical miles from the
coast, with 1st project coming up near Gujarat.
Performance of schemes and
learnings - Power
Challenges

 Inadequate last mile connectivity.

 Demand build up measures can be initiated.

 A system of cross-subsidization and Government giveaways such

as free electricity for farmers.

 Name plate/declared capacity of the many coal fired plants owned

by IPPs are overrated.
Performance of schemes and
learnings - Power
 Intra day load and demand graphs are not made in India at every
15 minutes or less intervals.

 Coal supply: Despite abundant reserves, the country doesn’t

produce enough to feed it’s power plants.

 Poor pipeline connectivity and infrastructure to harness India's

abundant coal bed methane and natural gas potential.

 Average transmission, distribution and consumer-level losses

exceeding 30%.

 The residential building sector is one of the largest consumers of

electricity in India.
Performance of schemes and
learnings - Power
 Key implementation challenges also include land acquisition,
environmental clearances at state and central government level, and
training of skilled manpower to prevent talent shortages for
operating latest technology plants.
 Hydroelectric power projects in India's mountainous north and
north east regions have been slowed down by ecological,
environmental and rehabilitation controversies, coupled with PILs.
 Theft of power
 Losses in the connector systems/service connections leading to
premature failure of capital equipment like transformers.
 India's nuclear power generation potential has been stymied by
political activism.
 Lack of clean and reliable energy sources such as electricity is, in
part, causing about 800 million people in India to continue using
traditional biomass energy sources.
Why does the government act as a
regulator?
 Power sector is subject to economies of
scale and monopoly characteristics

 Government needs to control tariffs

 Government needs to encourage

competition
Ultra Mega Power projects
 9 plants of 4000 MW

 Outlay of INR 3,20,000 Cr

 PFC will do the groundwork, create an SPV,

acquire land, permits etc and then sell this to
private vendors
The Telecommunications sector
Timeline
 Prior to 1980
 State owned, outdated equipment, poor reach
 1984 – Private sector allowed to
manufacture equipment
 1992 Private sector allowed to provide
services
National Telecom Policy in 1994
 Paved way for private sector
 Opened up Cellular and landline for
competition
 Universal Service Obligation
 But it had problems
 Auctionsystem led to high bids
 Inadequate competition
NTP 1999
 Addressed issues in NTP 1994
 Revenue sharing introduced
 More competition led to falling prices
 Rs 500 Billion of Investment in this sector
 National and International Long Distance
opened up in 2001
 BSNL Corporatized in 2001 - competes with
other firms
 USO fund set up for rural connectivity
TRAI
 Set up in 1997 as a Regulator with few
powers
 Subsequently given more power to
 Manage spectrum licenses
 Regulate prices
 Can be given more independence
 Suchas a decision making role on
convergence, spectrum issues
Players
 BSNL – local, long distance, cellular,
internet
 MTNL – Delhi, Mumbai, cellular
 VSNL – Internet and long distance
 Private providers
 Bharti, Reliance, TATA (fixed and wireless)
What have these reforms
achieved?
The need for infrastructure
planning in Telecom
 India's telecommunication network is the 2nd largest in the world
based on the total number of telephone users (both fixed and mobile
phone). It has the world's 3rd largest Internet user-base.
 As on April 2016, there are 1.059 billion telephone subscribers.
Out of which 1.034 billion are mobile subscribers and 25.04 million
are fixed line subscribers.
 Total teledensity is 83.32% as of April 2016, with urban teledensity
being 153.14% and rural teledensity as 51.67%.
 As of January 2016, there were 462.12 million internet users in
India, with 151.09 million of those being broadband internet users.
 India has an internet penetration of 34.8% and contributing 13.5%
to the total share of world internet users.
 In broadcasting, we had 869 television channels as of February
2016, and 345 radio stations as of March 2016.
The need for infrastructure
planning in Telecom
 The total revenue of the Indian telecom sector grew by 7% to ₹2,832
billion (US$42 billion) for 2010–11 financial year, while revenues
from telecom equipment segment stood at ₹1,170 billion
(US$17 billion).
 Major sectors of telecommunication industry in India are:
 Telephony
 Internet
 Data centres
 Broadcasting
 161 Internet Service Providers (ISPs) in India.
 Total revenue in the telecom service sector was ₹867.2 billion
(US$12.9 billion) in 2005–06 as against ₹716.74 billion
(US$10.7 billion) in 2004–2005, registering a growth of 21%.
The need for infrastructure
planning in Telecom
 According to the United Nations Conference on Trade And
Development (UNCTAD), there is a direct correlation between the
growth in mobile teledensity and the growth in GDP per capita in
developing countries, which tend to have a high percentage of rural
population.

 The Indian telecommunication industry employs over 400,000

direct employees (as of FY2007).

 The telecom sector has played a crucial role in attracting FDI in

India, since a huge investment is required for expansion.

 Both the financial and the IT-ITeS segments rely on good

domestic as well as international network connectivity.
Recent and ongoing schemes/
projects - Telecom
 New Telecom Policy 1999: Laid down a clear roadmap for future
reforms.

 National Long Distance opened for unlimited private participation

in 2000, with 74% limit on FDI.

 International Long Distance opened for private participation in

April 2002.

 The Universal Service Obligation Fund (USOF) was setup with

effect from April 1, 2002. It was given statutory status through the
Indian Telegraph (Amendment) Act, 2003.
Recent and ongoing schemes/
projects - Telecom
 Broadband Policy, 2004, to improve affordability and reliability of
Broadband services, incentives for creation of additional
infrastructure, employment opportunities, induction of latest
technologies, national security and brings in competitive
environment.

 Digital India Program on July 1, 2015, to ensure that government

services are available to citizens electronically and people get
benefited from the latest information and communication technology.
Performance of schemes -
Telecom
Issues

 Falling ARPU (Average Revenue Per User) due one of the most
competitive telecom environments in the world.
 Lack of telecom infrastructure in semi-rural and rural areas.
 Rural areas continue to remain under-penetrated.
 Excessive competition puts a load on the finite amount of
spectrum available leading to higher capex.
 Price war between the Service Providers Putting Pressure on
Margins.
Performance of schemes -
Telecom
 Regulatory charges in the telecom sector have a complicated
structure.
 Lower broadband penetration
 Other growth inhibiting factors like Mobile Number Portability,
Value Added Services (VAS) not having a lot of takers, and mobile
devices for new technologies are usually prohibitively expensive,
hence burdening the limited spectrum.

Opportunities

 Rural telephony can help expand services from urban areas which
are already saturated.
 3G and 4G services can be instrumental in stimulating growth,
changing usage patterns for people.
Performance of schemes -
Telecom
 Worldwide Interoperability for Microwave Access (WiMAX) can
not only enable the provision of high-speed internet services through
high bandwidth spectrum but also prove to be a useful mode of
communication in inaccessible terrains.
 Value Added Services (VAS) can provide an opportunity to
increase the ARPU.
 Infrastructure Sharing can lead to lower capex and opex.
 Managing Service involves the outsourcing of a specific technical
function or capability to a Managed Service Provider (MSP).
 Opportunities in Other Service Segments include things like
investing in Next Generation Networks (NGN), VPNs (having closed,
private networks) and IPTV (internet, television and telephone
services on a single platform).
The bottom line in Indian Telecom

1. Competition has led to enormous increase in

usage (more mobiles than landlines)

2. Telecommunications drives information flow

and the knowledge and service sectors

3. This in turn drives economic growth

Thank You