The segment has a CAGR of 19.4% between 2009-14
Being the vast country India is, it isn’t a matter of surprise that transportation is developed within the country. There are several mediums that help in a free flowing transit, hence making the connectivity aspect in India one of the finest in the world. Although air and water provide a big part of the traveling or transportation industry; alike making countries, India too is primarily dependent on the road. Most of the people prefer take the road-route as it has multiple motion options and is quicker along with being the cheapest.
Today, we would explore important facts about the Indian Roads and Highways industry and opportunities lining up for the future.
India has a total of around 4.87 million kilometers (kms), 85% of total passenger traffic is concentrated on the passenger traffic. Road network has increased and spread all through cities, towns, villages and most interior parts of the country. The rise of the automobile industry and freight movements has made evident that the roads in India are in their top notch quality.
India is ought to have a smoother ride in future:
The Indian government has dedicated 20% of the $1 trillion infrastructure expenditure from the 12th Five-year Planning (2012-2017) and has decided to concentrate on building roads. This massive amount is set aside to expand or re-develop roads across the country and thus enhance the road connectivity for the future. Around $19.2 billion is the expense on roads and bridges that is expected to be shelled out by the end of 2017.
The national highway range at present (2015) is calculated to be a bit more than 97,000 kms; the same is projected to cross over 100,000 kms within the end of 2017. The national highway covers a mere 1.9% of the total road network in India; the authorities are working hard to expand the same in order to improve connectivity to all parts.
The Indian government on the same lines has launched a seven phase project known as the National Highway Development Project (NHDP). This is one of the biggest projects which is progress for the revamp of national highways in India and is supervised by the National Highways Authority of India (NHAI)
GOI is permitting 100% FDI, many foreign firms are eyeing Indian road projects in partnership with Indian companies
PPP playing an important role:
Public sector is getting on with the primary aspects yet it is also receiving a good helping hand from the private players. There is a massive wave of Public-Private Partnership (PPP) that are enabling projects which were once unthinkable in India.
The government’s decision of increasing the private players role in infrastructure segment has turned to be a milestone in the development process. According to the newest reforms private parties can enter into national projects and enter into PPP’s in a much easier manner, with decreased time consumption for the agreement formalities.
As per the records, the total value under the PPP segment until March-2015 was $ 32.69 billion. There are around 165 projects that are in progress with a completion period within the next 5-10 years. In additional to these, a whopping $ 31 billion is projected to be invested into the PPP model in the coming 5 years; most of this is likely to be concentrated on roads in different regions.