Development Watch – Week #2 October ’23
Development News
Favourable demand for road logistics
Rating agency ICRA anticipates a favourable demand scenario for road logistics sector in FY 2024. This is aided by stable domestic consumption and investment demand. The industry’s revenue growth is pegged at 6-9% in FY 2024. This is driven by demand from various segments like e-commerce, FMCG, retail, chemicals, pharmaceuticals and industrial goods. Despite the decline in crude oil prices in the first quarter of FY 2024, the operating margins of logistics players were impacted due to lag in price hikes. There would be likely contractions in operating margins because of inflationary input cost pressures, elevated crude oil prices and debt-funded capital expenditure for vehicle replacement.
25 years of Mundra port
As much as 33% of India’s container traffic flows through the Mundra port through a dedicated freight corridor. The freight corridor offers a unique facility of double-stack containers from northern hinterland to Mundra. It has contributed over 2.25 lakh crores to the state and national exchequer since inception. Since the flagging of it first ship in 1998, the Mundra port in Gujarat has consistently demonstrated a visionary approach, along with unwavering ambition and impeccable execution. It has positioned itself as a premier and technologically advanced port on the global map. Mundra port is one of the world’s largest ports, with over 260 million tonnes capacity. It has handled over 155 million tonnes in fiscal 2022-23, which accounts for 11% of India’s maritime cargo. As the nation’s largest commercial port, it is spread over 35,000 acrees. Mundra port has facilities for the largest coal, natural gas and auto terminals. Its deep draft and all-weather capabilities ensure efficient cargo evacuation and minimal turnaround time.
Rs. 8,800 Crores loan for Civil Aviation infra
India Infrastructure Finance Company Ltd. (IIFCL) has approved loans amounting to Rs. 8,800 Crores for development of airports and civil aviation infrastructure in India with a total outlay of Rs. 74,000 Crores. It plays a significant role in financing airports projects in the country. The IIFCL has sanctioned loans of around Rs. 4,000 crores. India’s airport sector has witnessed massive growth in recent years, due to increasing investments from both the government and private sector. As a result of expansion, the passenger handling capacity is expected to increase from existing 350 million per annum to 500 million per annum by the end of the current financial year. IIFCL will continue to extend its support in funding greenfield airport projects, as well as maintenance, repairs and overhaul facilities under PPP mode through term loans, subscriptions to bonds, refinancing, or credit enhancement. Airport sector has the potential for economic multiplier of 3.1, and employment multiplier of 6. According to National Infrastructure Pipeline, about 91,000 Crores capex has been envisaged for civil aviation in 5 years, till FY ’25.
100% land acquired for Mumbai-Ahmedabad bullet train project
The National High Speed Rail Corporation (NHSRCL) made an announcement about completing the acquisition of land in Gujarat for the Mumbai-Ahmedabad bullet train project. A total of 951.14 hectares land to be acquired in eight districts of Gujarat, for the project. Presently, 99.95% of land has now been acquired for the project across Gujarat, Maharashtra, and Union Territory of Dadra and Nagar Haveli, Daman and Diu. The operational control centre will be located at Sabarmati in Ahmedabad. The government aims to run the 1st phase of the bullet train between Surat and Bilimora in south Gujarat by 2026. There will be 3 depots, of which 2 will be in Gujarat, including Surat and Sabarmati. There would be an additional one in Maharashtra in Thane. Launched in 2017, the completed 508-km route is expected to be covered in 3.5 hours. The high-speed rail line is being built using Japan’s Shinkansen technology. The project aims to create a high-frequency mass transportation system. The project has been funded by the Japan International Cooperation Agency (JICA) with a soft loan of Rs. 88,000 Crores from Japan.
India, a growing hub for mass transit solutions
Siemens has signed a Rs. 26,000 Crores ($ 3.25 billion) contract with Indian Railways to supply and service electric locomotives for freight movement in India. This is the biggest locomotive deal in the history of Siemens Mobility and single largest order for the company in India. The order would accelerate component and locomotive manufacturing in India. As part of the agreement, Siemens will deliver 1,200 electric locomotives of high capacity 9,000 HP. It will also provide servicing for 35 years to the Railways. The deliveries would be undertaken over an 11-year period. Siemens currently has 30 factories in India. Siemens has also formed a joint venture with TRIL Urban Transport under PPP, known as Siemens Project Ventures GmbH, a subsidiary of Siemens Financial Services. This would develop the metro corridor from Hinjewadi to Shivajinagar in Pune. The Pune IT City Metro Rail Ltd. is an SPV and the order size of Siemens is Rs. 900 Crores. The 23.3 km corridor with 23 stations will be the first metro project in India under the New Metro Rail Policy.
Blackstone Joint Venture to invest in Chennai logistic park
Greenbase Industrial & Logistics Parks is a joint venture between Hiranandani Group and Blackstone Group. It plans to invest Rs. 1,500 crores to expand its warehousing portfolio in Chennai. The company aims to acquire an additional 450 acres of land, in addition to its existing 190 acres logistics park. The expansion is part of the company’s strategy to develop industrial and logistics parks across key cities in India. The logistics sector in India is expected to grow 10% CAGR in the coming years.
Potential for rooftop wind power generation
The Gujarat Government has announced a renewable energy (RE) policy that allows for the setting up of small-scale wind power projects on rooftops. This allows consumers to install wind projects under a net meeting arrangement to offset their own consumption. They can also sell the entire generation to discom. Gujarat leads the country in residential rooftop solar power generation. Officials believe there is great potential for growth in wind-power generation on residential rooftops. Gujarat has a 2,068 MW installed capacity in residential rooftop solar power generation, which is the highest in the country. Average daily generation of power is 8.50 million units through rooftop power installations.
ReNew Power in Top 15 Climate Tech Companies
Indian green energy company ReNew has found a place in list of top ’15 Climate Tech Companies to Watch’ by MIT Technology Review. This is a global list highlighting established businesses and startups that have greatest potential to reduce greenhouse gas emissions and climate threats. The editorial team at MIT Technology Review undertook an exhaustive process, involving consultation with multiple industry experts, investors, academic sources, and global editors while scanning through company materials, comparing technical approaches, and assessing the scientific credibility of various claims before arriving at final list.
Local Feedback
LocalFeedback.org aims to track and document actionable parameters that help improve urban and rural infrastructure. The founder, Susmita, has juggled diverse roles in real estate, project budgeting, valuation and execution on construction sites. Having traveled to more than 20 countries, she has worked across 4 regions in India. Her areas of interest include sustainable buildings, electric mobility and urban development. She visited top-ranking cities on livability indices and has presented published papers at international conferences.