An Introduction

to
Infrastructure
1. MEANING
2. TYPES
3. ROLE OF PPP
4. FINANCING
5. VARIOUS STAKEHOLDERS AND STAGES
6. FDI
Meaning
 It’s a framework of facilities through which various goods and
services are provided to the public (Jetli, Sethi; 2007)
 The basic physical systems of a business or nation. Transportation,
communication, sewage, water and electric systems are all
examples of infrastructure (Investopedia, last accessed 02/01/15 at
11.30 p.m.)
 Infrastructure is the foundation on which the fort of economic
success is built. It is like mother to any economy which not only
ensures the evolution of it but also ensures consistency in its growth.
India, which has risen to the "economic realities" recently, is trying to
attain "economic nirvana" through consistent focus on Infrastructure
growth
(http://www.mondaq.com/india/x/27497/real+estate/Infrastructure
+Laws+in+India)
Reserve Bank of India has defined infrastructure sector as:
i. Power
ii. Telecommunications
iii. Railways
iv. Roads including bridges
v. Sea port and air port
vi. Industrial parks
vii. Urban infrastructure (water supply, sanitation and sewage projects)
viii. Mining, exploration and refining, and
ix. Cold storage and cold room facility, including for farm level pre-cooling
for preservation or storage of agricultural and allied produce, marine
products and meat.

(RBI Master Circular No.12/2012‐13 dated July 02, 2012)

Types
 Economic  Women welfare
 Energy  Empowerment of
disadvantaged groups
 Transport
 Telecommunications
 Special economic zones
 Urban infrastructure
 Rural infrastructure
 Social
 Human development
 Poverty
 Health
 Education
 Labour
PPP in Infrastructure
 Scope is widened as it’s a shift from the traditional outlook to a
modern outlook
 Government gets an important ally to improve upon the quality and
the efficiency of the services and the products
 It also brings with itself various technological advancements and
improvements
 Privatisation is the new way forward as they have the following
advantages:
 Investment requirement has to be kept in mind
 Business like efficiency rather than having an obligatory approach
 Making the projects globally competitive and efficient in terms of
financing
 Technological developments make it better to have commercialization
of the infrastructure development
Various Models of PPP

 These are some of the popular models followed in PPP across the
globe:
 BOT
 BOO
 BTO
 BT
 BTO
 BLT
 ROO
 LROT
Infrastructure Infrastructure
Development Development
Project - Various Project - Various
Stages Stakeholders
 Development  Government
and Gestation  Sponsors and
Stage lenders
 Construction  Investors
and Start-up  Contractors
stage  Project
Vehicle
 Operational  Users/Consu
Stage mers
 Termination  Regulators
Stage  Other bodies
 FDI Policy and Infrastructure
 Requires an investment of US$ 1.7 trillion in infrastructure (Goldman Sachs Report, 2012)
 PPP seen mostly in airports, power, roads and highways
 Present challenges:
 Political influence, labour unrest, hostile measures of acquiring land
 resistance for a foreign player to invest in infrastructure due to the delay in completion of projects
 Capital flow not proper.
 Majority or players
 Wish to be an FII in infrastructure and reality sector than have FDI.
 To Do:
 Open the bidding stage to as many investors as possible to have a competitive bidding or
auctioning process
 identification of priority infrastructural projects
 Create a pipeline for pre-assumed, commercially attractive projects that can be actively promoted
 Single window clearance and prevention of regulatory lapses and risks being undertaken
 THANK YOU

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