Industry leaders laud Gati Shakti for streamlining infrastructure growth

The infrastructure sector — from roads and railways to power and telecom — stands to benefit from the streamlining of resources under Gati Shakti, which will expedite the growth of these sectors. In a conversation with Suveen Sinha, industry leaders who were part of a panel discussion on “Gati Shakti: Hopes and Aspirations of Infra Players” at the Business Standard Gati-Shakti Connect event in New Delhi on August 28, lauded the initiative and said it would pave the way for a seamless infrastructure growth in the country.

Seamless coordination

“Gati Shakti has made it very easy to conceive an idea for infrastructure, not only for planning but also execution. With the Gati Shakti map, we can now decide the extent to which we should take the risk of seeking approvals and waiting for clearances,” said R K Jain, managing director, Dedicated Freight Corridor Corporation of India (DFCCIL).

Adding to this, Sanjiv Edward, CEO-Cargo & Logistics, GMR Group, said that Gati Shakti is the best thing that could have happened to private companies in the country. “What it is bringing is accelerated growth. More importantly, from our perspective, it also means holistic growth for the ecosystem.”

He added that road infrastructure built through Gati Shakti or the National Master Plan for multimodal connectivity would bring down the time taken for freight transportation. For example, the 100 hours it takes to transport freight from Bangladesh would be reduced to less than 30. “It will not just provide a solution for freight, it will also re-emphasise India’s position of leadership in this region because then you’re really providing a solution for your neighbouring countries,” Edward said.

One-stop solution

Highlighting why Gati Shakti was required in an already existing bureaucratic system, Akhil Gupta, vice-chairman, Bharati Enterprises, cited the example of telecom tower construction where India has been able to create a pioneering model.

“We have come a long way, and the support from the Department of Telecommunication (DoT) and the Telecom Regulatory Authority of India (Trai) has been tremendous,” he said. “But the problem is one of coordination, and some municipal corporations refuse to accept the (suggested model), despite the state having accepted it. That’s where <baburaj> comes into play at times.” He added that Gati Shakti has done a “marvellous job” wherein every kind of infrastructure can be put on a single portal.

“The result is that from 200-300 days of average clearance time, it has come down to anywhere between seven and 40 days, depending on the state,” Gupta said, adding, “The sincerity of purpose that has been shown by every department of the government is quite something. In fact, Airtel, Idea and Vodafone pooling in their towers together is a remarkable thing that happened in India. China followed it — all the Chinese telecom companies did it.”

Making investment attractive

Since Gati Shakti helps seamlessly plan infrastructure projects, it becomes easier for investors to identify investment opportunities. Srishti Ahuja, partner, lead advisory at EY, said Gati Shakti has made an impact on how people are now conceiving projects, how they are building them, and how they are financing them.

“India needs about $11 trillion in the next decade or so to build that infrastructure. All of this capital will have to come from long-term, patient sources of capital because that is the inherent characteristic of infrastructure, and investors have high risk aversion,” she said. “The kind of pools that will be able to provide you with long-term patient capital are sovereign wealth funds and pension funds. What Gati Shakti has done is that it has reduced the amount of risk involved with projects,” Ahuja added.

She said that since Gati Shakti offers better visibility across all sectors, it will immensely help public-private partnership (PPP) projects and similar contracts where the government can identify the risks it can take.

“I think the basic PPP principle is that the risk should be allocated to the government. And with Gati Shakti, I think the government can take, I would say, a further aggressive stance of eliminating these kinds of risks for PPP projects,” Ahuja said. “Whether it’s land acquisition or availability of ancillary infrastructure, it will help improve the contractual framework of the PPP projects.”

Jain added that PPP in roads and railways would be a game-changer, and Gati Shakti has the potential to facilitate the same. “Through Gati Shakti, we are working on the integration of assets and facilities available to us. Through multimodal logistics, we are trying to connect the waterways, highways and railways,” he said, adding, “At the very planning stage, the portal shows the no-go areas for projects to minimise environmental and ecological disturbances as well.”

State-level challenges

While Gati Shakti has laid the runway for infra projects in the country, there are still challenges that the sector faces, especially at the state level. Gupta pointed out that while there are states that are truly committed to infrastructure development, there are also those that appear committed only when one talks to them. However, when it comes to action, they are very revenue oriented and are prone to listening to, say, various resident welfare associations who argue against putting towers in certain areas, he added.

“There are states that are progressive, that realise the importance of infrastructure, follow the guidelines laid out by DoT and see both structural and digitisation growth. And then there are states that do not follow the guidelines and impose unreasonable charges to make it a cash cow,” Gupta said. “Permission for projects in such states do not come (easily) and ultimately, people suffer.”

Pointing out that DFCCIL works in nine states and 72 districts, Jain said that a lot depends on the individual officers posted in these areas. “The land acquisition process for 90 per cent of any project area is always smooth; but for the remaining, it becomes very difficult. For those particular parcels, you always have to work very hard with the district collector and top officials,” he said.

Edward added that sometimes it also boils down to making the entities look at the bigger picture and how it is going to bring growth to the area and help the overall economy. “It's important to make them understand how the delay is impacting the larger interest. Once they understand that, they will not sit on it for long,” he said.

Addressing sustainability

The next step for Gati Shakti would be to address the challenges related to the sustainability of infrastructure projects.

Jain said the DFCCIL is trying to prioritise the most sustainable mode of transport. “Rail is fuel-efficient, environmentally friendly and costs one-sixth of road transport. The share of rail in the transport mix in all developed countries stands at 40-50 per cent. But in India, it is 26–27 per cent,” he said. “We have to focus more on creating railway infrastructure to bring down the overall transportation or logistics cost.”

He added that the national rail plan seeks to provide supply before demand arises. “Development of infrastructure is important, but environmental damage also has to be minimised. If trees are felled, we have a moral and institutional responsibility to plan and ensure that at least 10 times more trees are grown elsewhere,” Jain said.

Ahuja added that for every project, they see to it that the environment guidelines are not compromised. “Currently, there is a lot of discussion about energy storage projects, and because the cost of batteries is high, a lot of pump storage projects are also being developed,” she said, adding, “Even private sector players are cognisant of the necessary approvals required if the project is in forest land.”

Most investors, she added, now want to undertake an environmental impact assessment before committing capital. “Capital is being raised towards green infrastructure, as a result of which there is a thrust on developing renewable energy,” said Ahuja.

Edward said Gati Shakti will ensure sustainable development by providing a level of transparency and accountability so that the environment is kept in mind. That said, Gupta added, “Gati Shakti should not be treated as a magic wand that can solve all problems. But when there is better coordination, and less digging, it is environmentally better.”