Post Date : May 22, 2020
According to a report by Kearney, a global management consulting firm, the Indian transport infra sector holds an investment opportunity of USD 575 billion in the next five years.
The report read, “Although the country has improved its transportation landscape over the last two decades, much remains to be done to meet the increasing demand now and, in the years, ahead.”
According to the report titled ‘Harnessing the opportunities in India’s transport infrastructure’, “Roads and Railways constitute 80% of the total investment opportunity driven by investments in flagship projects such as Bharatmala Pariyojana, Dedicated Freight Corridor, High Speed Rail, etc.”
However, the report identified delays in land acquisition, clearance, constraints in funding for infrastructure projects, lack of efficient dispute resolution mechanism as key challenges in realising the investment opportunity.
Significant opportunities exist in various transportation infra sectors in India; prioritizing the most important ones is of paramount importance, the report noted.
“Although there are obstacles to realizing the vast potential, these challenges can be overcome with a concerted and coherent strategy across the key stakeholders: government authorities, concessionaires and contractors, and financial institutions,”~Manish Mathur, Partner and Head Asia Pacific, Transportation and Infrastructure Practice, Kearney
The report also outlined some key initiatives that could help overcome obstacles and maximize opportunities. It said, the government authorities need to focus on identifying the right funding model, ensuring robust cash flow management with comprehensive viability assessment, and enabling a vibrant ecosystem of concessionaires and contractors while designing their transport infrastructure development strategies.
The report said the concessionaires and contractors need to explore strategic partnerships, identify the right markers for decision-making, and ensure the quality and timeline of project delivery with the growing infrastructure investments and greater participation from the private sector.
Mentioning about financiers, the report said: “In addition to re-evaluating the risk-reward spread in the infrastructure sector, financial institutions should collaborate with government authorities and concessionaires to develop innovative products for financing.”
Mr Mathur added, “With a concerted effort, today’s challenges can be transformed into an opportunity that will not only boost organic growth, drive job creation, and aid a whole gamut of industries but also help fulfil one of the most basic tenets of economic and social activity: mobility to serve the common good,”