Catching up with 2010

SMARTSHARE

Circa 2000, there was a joke about the likely shape of India's economy circa 2010. By 2010, there would be plenty of expensive, high-performance cars with no roads to drive on.

There would be planes choc-full of passengers unable to land due to shortage of runways. Everybody would have a brand new cellphone but the networks would be jammed. Every household would flaunt electronic gadgets that couldn't be run due to power cuts.

It was in 2000 that there was a focus on infrastructure. Five-odd years down the line, some of the above dystopic projections could still come to pass. Over the next 2-5 years, India has to play catch-up with a vengeance in sectors like power, energy, ports, roads, railways and airports.

It's estimated that infrastructure will contribute over 50 per cent of revenues for the construction and engineering industries over this period. Here's a sector by sector briefing of likely opportunities. Any broad infrastructure plays over this period should outperform the economy-at-large.

Power: The GoI targets power availability for all by 2012, electrification of all villages by 2010, and access to electricity for all households by 2010. This entails another 30,000 MW of interregional grid capacity.

Installed capacity by 2007 (Tenth Plan) is likely to be 137,000 MW. The capacity addition target for the Eleventh Plan is another 167,500 MW. The sector will swallow about $180 billion in new investment by 2012 if these targets are achieved.

Oil and natural gas: NELP VI will accelerate exploration activity with 55 new blocks on offer. Pipeline construction is another growth area. GAIL and GSPL are setting up infrastructure for gas transmission and distribution.

IGL and MGL are expanding their gas distribution networks in Delhi and Mumbai. GAIL is putting together distribution networks in another 22 cities. Petronet LNG is undertaking expansion of its Dahej LNG terminal and building a new terminal at Kochi. In retailing, Reliance and Essar are rolling out pumps.

Civil Aviation: Domestic and international passenger traffic would grow at 12.5 per cent and 7 per cent per annum over the next decade. There are several new airlines gearing up for IPOs.

Greenfield projects at Bangalore and Hyderabad are being developed along with modernisation of Delhi and Mumbai airports. Greenfield airports are also slated for Pune, Navi Mumbai, Goa, Kannur, Gangtok and Ludhiana. The modernisation of Chennai and Kolkata is on the cards.

Ports: Six major ports "" JNPT, Mumbai Port Trust, Cochin Port Trust, Kandla Port Trust, Chennai Port Trust and Tuticorin Port Trust have plans to add container terminals. The National Maritime Development Programme will cover 276 port projects at an investment of Rs 600 billion by 2012.

In the ongoing Sethusamudram project, the Dredging Corporation of India is a key player. States like Maharashtra, Gujarat, Bengal, Kerala and Orissa are seeking private participation for development of minor ports.

Roads and bridges: The Golden Quadrilateral will be 95 per cent complete by June 2006, the phase II North-South-East-West corridor projects will complete in 2008. Phase III (upgradation of 10,000 km of national highways) will complete in 2009.

A new project "" the Special Accelerated Road Development Programme "" spanning 7,639 km has been approved for the north eastern region in the Budget. The Rs 600 billion, Pradhan Mantri Gram Sadak Yojana is about 70 per cent complete with a target deadline of 2010.