India Vows to Improve Infrastructure to Grow Economy

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FEATURE-Games-New Delhi's preparations criticised

NEW DELHI, Feb 26 (Reuters) - India's hopes of using the 2010 New Delhi Commonwealth Games to showcase its capital have hit fresh trouble with a parliamentary committee saying not enough has been done to prepare for the expected influx of visitors.

Affordable hotel rooms looked likely to be in short supply in the city, the committee told organisers, who are already facing criticism for delays in preparations for the Games.

"There appear (to be) utter lack of coordination, determination and sense of urgency amongst the agencies engaged in providing facilities to the tourists who will be visiting India in connection with the Commonwealth Games," said the panel on transport, tourism and culture in a report issued this week.

It said it was dismayed that the Delhi government had not sent its proposals to the tourism ministry until November and urged authorities to improve road and air links and security for tourists.

The report was a new blow to organisers of the October 2010 Games, who are already having to cope with the credit crunch, delays in building work and environmental protests.

Sports Minister Manohar Singh Gill last week compared the slow build-up to a big, lavish Indian wedding.

"I use an absurd analogy...this is India and we've weddings, monsoon weddings, the Indian style," he said at a business forum. "Till the previous evening we will run around...then stand together the next day and sing wedding paeans.

"Next October is not that far away," he said. "The schedules are something to watch, we (the government) certainly do. Although it started late, we're working hard. They will make it."

BUDGET REVISION

The Games were initially seen as a great opportunity for India to demonstrate its growth into a modern nation and its place as an economic rival to China but those hopes have dimmed.

Government figures in December estimated Games expenditure at around 79 billion rupees ($1.6 billion), including money spent on infrastructure and on last year's Commonwealth Youth Games.

Preparations have been hit by the financial meltdown, however. Private builders have sought funds from the Delhi government, who in turn have sought federal help and the initial budget faces revision.

"The cost estimates were done one-and-a-half years ago and all of them are undergoing revision," V.K. Verma, director general of the Games said. "The government is very aware there should not be any compromise."

In November, the Commonwealth Games Federation (CGF) raised concerns over the slow pace of work, which forced this year's World Badminton Championships to be moved to Hyderabad.

The Commonwealth boxing championships, originally due to be held in December in New Delhi, have been postponed until February or March next year because of delays in building the venue.

The Games village being built on the banks of the Yamuna, one of India's major rivers, is the subject of a legal case after a petition raised environmental concerns.

"New Delhi could lose the right to host the 2010 Commonwealth Games if organisers are forced to shift the athletes' village from its present location," the CGF said in November.

TEST EVENTS

Despite the problems, organisers remain upbeat.

"The organising committee is confident all the competition venues and Games village would be completed as per the target dates set for completion," vice-chairman Randhir Singh said on Tuesday.

"At most of the training venues work has already started while at the remaining (venues), work will be started shortly, but everything will be completed in time," he told a news conference at the netball venue under construction.

"We're all fighting hard to make sure we are making the right programme to hold a great Games," he said. "One or two things were left behind but there is ample time to catch up."

Test events are planned for between February and June next year, before a dry run of the Games in August.

Games officials said the parliamentary report was based on old data and might not entirely reflect the present situation.

"It is for the government, I think they will manage things," Singh said. "The Delhi government has said everything will be completed, it is a legacy issue for the government. Everyone is free to say what they want."

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Port sector revival held up on funds crunch

MUMBAI, March 25 (Reuters) - Expansion and greenfield projects at Indian ports have almost ground to a halt as an economic slowdown has choked investment into the sector, which holds great potential as a growth driver, industry players said.

A fund shortage has delayed expansion at several Indian ports, raising concerns of higher time lags and congestion after an expected traffic revival in June, they added.

"Apart from 2-3 terminals coming up in 3-4 major ports, other projects are expected to face delays," said Manish Sharma, director at consultancy firm KPMG.

Among these are JSW group's captive port on India's eastern coast, Reliance Industries' Rewas project on the west coast, besides a few others in south India.

Much of the estimated 558 billion rupees needed to revive the sector was expected to come from private players. However, this is unlikely due to longer gestation period, tighter credit and a sharper-than-expected drop in economic growth, analysts said.

India is expected to grow around 7 percent in FY09, its slowest in six years, with even slower growth seen next year.

However, cargo traffic is expected to see a revival in June, but the country's 12 major ports -- which saw volume drop over 8 percent in April-Feb 2009 compared with last year -- are not equipped to handle it, analysts said.

"A scenario where capacity additions are put on hold, while cargo volumes pick up in due course could potentially lead to the recurrence of extreme port congestions in the future, similar to those witnessed in the recent past," KPMG's Sharma said.

With its strategic location straddling major trade routes and a long coastline that boasts a port every 20 miles, India's port sector was expected to be a major driver of trade and economic progress, but has not managed to deliver so far.

Even during the last 2-3 years, when trade was at its peak, India's largest container port, Jawaharlal Nehru Port Trust (JNPT), had a waiting period of up to 10 days.

Port of Singapore, in comparison, took just about half a day.

Capacity utilisation in India is also abysmal with three-fourths of its 200-odd ports being defunct or seasonal.

"There is a need for deeper draught ports and services such as bunkering, coastal shipping, connectivity and hinterland development," Bhavesh Gandhi, executive vice chairman of Pipavav Port, said at a conference in Mumbai recently.

Major ports -- which handle 7 million twenty foot equivalent units of container cargo compared with about 29 million by Port of Singapore -- are expected to see 7.7 percent volume growth each year till 2013/14, government data showed.

HOPE FLOATS

The public-private partnership model will help boost growth in the sector, Gandhi added.

Of late, corporates have started to invest in traditionally state-owned ports on a build-operate-transfer basis for 25 to 50 years to cash in on India's growing trade, but lacked the desired momentum, industry officials said.

AP Moller Maersk <MAERSKb.CO>, General Electric , Singapore's PSA International, UK-based 3i Group have already invested heavily in new and existing port projects.

In the current scenario, these companies and also other domestic players now stand to benefit from cheap land and construction costs, which should help speed up development in the sector, analysts and port officials said. "This slowdown is an opportune time for capacity expansion by existing ports due to lower cost of construction as well as equipment and significantly less market risk," a spokesman at Mundra Port & SEZ said.

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Slowdown, political uncertainty hit India infrastructure

MUMBAI, May 12 (Reuters) - One of India's most ambitious infrastructure projects, an $325 million eight-lane bridge running through the sea off Mumbai, opens next month after negotiating a maze of bureaucracy, courts and street protests.

Ten years in the making, the 5.6 km-long (3.5 miles) Bandra Worli Sea Link, aimed at easing the financial capital's legendary traffic jams, is a symbol of the neglect of India's infrastructure and the challenges such mega projects face.

Budget overruns, disputes between the state and private contractors and protests and litigation by residents and fishermen concerned at the environmental impact and loss of livelihood all but killed the project.

As India gets set to usher in another coalition government vulnerable to the competing pulls and pressure of regional groups after elections this month, the task of building a world class infrastructure on par with China seems even more challenging.

"We've had a massive under-investment in infrastructure in the last few decades and the result is blindingly obvious to anyone," said Anu Madgavkar, a partner at McKinsey & Co.

"There's no magic wand that will make our infrastructure problems disappear in a couple of years; even if we go full steam ahead, we'll just about prevent the situation from deteriorating further," she said.

At least the Mumbai sea link will see the light of day; dozens of other projects across the country face an uncertain future because of a combination of political instability and the worst financial crisis in decades.

FINANCIAL CRISIS

India estimates it needs $500 billion by 2012 to upgrade its overwhelmed airports, potholed roads and inadequate utilities.

Easing regulations and a booming economy had drawn eager local and foreign investors to the table, but just as it seemed the public-private partnership model would ease India's infrastructure woes, the financial crisis turned the tap off.

"Response from the private sector has been muted and there is a rise in risk aversion around the world. So long as the downturn persists, India faces hurdles making much-needed improvements to its infrastructure," said Moody's.com economist Sherman Chan.

Infrastructure projects, being capital-intensive, long in duration and exposed to economic cycles, are particularly vulnerable to a slowdown, with several in Asia failing or hit by delays and corruption during the crisis a decade ago.

Add to that India's underdeveloped capital market and tussles over subsidies and land ownership, and the task is tougher.

"We still have a socialist mindset: we think the government has to provide everything, and that too at subsidised rates," said Nitin Zamre, a director at CRISIL's infrastructure advisory.

"Subsidies on water and power are politically sensitive areas, and the government is not willing to let go entirely."

But with a fiscal deficit of around 10 percent of the GDP, government finances are not in good shape and there are constraints in managing and executing infrastructure projects.

Both the ruling Congress party and the main opposition Bharatiya Janata Party have promised to tackle the problem.

The Congress wants to build rural Internet connectivity while the business-friendly BJP talks about investments in highways and clean energy.

"In the short term, until a new government is in place, we're in for a bit of a lean period as far as implementation of projects goes, but it is in the interest of the new government to quickly ramp up," said Madgavkar.

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Commonwealth Games: India working to secure 2010 Games, says chief
20 May 2009
Agence France Presse

Security is the prime concern ahead of next year's Commonwealth Games in New Delhi due to the tense situation in the region, organisers said on Wednesday.

"We have to satisfy the Commonwealth Games Federation (CGF) on the security aspect and I am confident we can do that," organising committee chairman Suresh Kalmadi told local media.

"Security is a very important aspect of the Games and we need to have more communication with the CGF on that."

Security concerns in South Asia have grown after 166 people were killed in militant attacks in Mumbai last November, and gunmen ambushed the bus carrying the Sri Lankan cricket team in Pakistan in March.

Seven Sri Lankan cricketers were injured in the incident, forcing the International Cricket Council to abandon plans to hold a part of the 2011 World Cup in Pakistan.

The CGF and Indian organisers have said that security for the Commonwealth Games, featuring athletes from 71 nations and territories of the former British Empire, will be on par with last year's Beijing Olympics.

"The CGF had sent a couple of delegates to check on the security," said Kalmadi. "They have given a report for us to follow up on.

"The scenario in all our neighbouring countries also worries them, so we have to give them a lot of comfort on security."

Organisers are looking at the October 3-14 Games next year to showcase their ability to stage major sporting events with an eye on hosting the Olympics by 2020.

Kalmadi admitted there were minor delays in construction of two venues, but promised to have all infrastructure ready six months ahead of the event.

"It took us a while to procure mandatory approval for some infrastructure projects," he said. "That led to a delayed start, but we have now managed to catch up and most venues will be ready in time for the Games."

Kalmadi said the CGF executive board were satisfied with the progress during a visit to New Delhi earlier this month.

"The CGF executive inspected the venues and expressed satisfaction with the way the infrastructure was coming up," he said.

"We need to maintain the momentum, and the organising committee will keep monitoring the execution of infrastructure contracts."

New Delhi is only the second Asian city to be awarded the Commonwealth Games. The Malaysian capital of Kuala Lumpur hosted the 1998 event.

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INTERVIEW-India IL&FS Investment may launch city infra fund

MUMBAI, June 25 (Reuters) - IL&FS Investment Managers is considering raising a fund to invest in India's overstretched city and social infrastructure in 2010, the head of the country's oldest private equity firm said on Thursday.

Archana Hingorani, who manages $2.5 billion, said the key ingredients for the development of core infrastructure such as highways, ports and power plants were in place but water, sewage, healthcare and roads in cities were crumbling.

"We could look at a fund for city infrastructure sector, may be in 2010. We are very clear there are opportunities, but have we structured a potential fund for it? Not yet," she said told Reuters in an interview.

The urban and social infrastructure fund would be feasible to start at around $200 million, Hingorani said.

The firm also hopes to raise another $200 million for an Asia infrastructure fund it runs with Standard Chartered by September to take the size to $800 million, she said.

IL&FS, which manages seven funds including two real estate funds worth $1.4 billion, also plans to launch funds in 2010 as most of the money would have been committed, she said.

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ANALYSIS-India's infrastructure hopes may hit funding roadblock

MUMBAI, June 26 (Reuters) - India's hopes of launching much-needed road, port and power projects may be deflated by a funding squeeze as government finances are constrained, long-term domestic money is scarce and battered overseas investors and lenders watch from the sidelines.

If starved of the spending, India's overburdened infrastructure is bound to hinder the country's efforts to return to an economic growth rate of 9 percent a year and hurt its goal to become the fastest growing major economy in the world in 2010.

Asia's third-biggest economy needs $500 billion for its infrastructure over the five years to 2012, the government has estimated. About 30 percent of that is expected from private funds, as the government tries to contain a widening fiscal deficit.

Developers tend to raise equity financing through founders or overseas investors and borrow funds for short to medium terms from financial institutions. But money flow is tight these days.

"We have to seek alternative ways to raise capital," said Jai Mavani, head of infrastructure at consultancy KPMG, adding that the big pool of domestic savings must be tapped. "We have some of the highest savings rates in the world," Mavani said.

According to some estimates, household savings in India in 2007/08 was around 7.3 trillion rupees ($150 billion), from a population of 1.1 billion. Most of that is in low-risk bank deposits, insurance policies and pension funds, all of which are heavily regulated.

Infrastructure projects require capital that is willing to be committed for decades, and projects can carry substantial execution and financial risk.

"It's a new animal," said Nitin Bhasin, analyst, Nobel Group, an equity advisory firm for institutional investors. "The money is in the system but regulations have to be made more conducive."

WEAK SECTOR, WEAKER BOND MARKET

The government has announced extra spending of 200 billion rupees and cut tax rates as part of stimulus packages to boost growth, which widened the fiscal deficit to 6.2 percent of GDP in FY09 against the previously targeted 2.5 percent.

Neither India's banking system nor the domestic institutions have the money to finance India's infrastructure needs, and corporates want to tap retail money.

The firms want pension funds to invest up to 15 percent of their money in infrastructure projects and await cues from the approaching budget to be announced on July 6.

Bankers say the foreign currency market is unwilling to extend long-term funds. Meanwhile, there is a reluctance among investors to pick up long-maturity bonds, such as those issued by infrastructure companies, in an illiquid bond market, on expectations yields will rise later.

"Ideally, you would expect the bond market to be the best vehicle for meeting infrastructure investment requirements. You get access to long duration money and all infrastructure assets are long gestation," said S. Nanda Kumar, a Fitch Ratings analyst.

Since a lot of India's infrastructure projects are in the early phases of construction, their assigned ratings are too low for bond market investors, such as banks, pension and mutual funds and insurance companies, to be able to invest in them.

The low ratings reflect the risks infrastructure projects pose, including construction and completion, high indebtedness and susceptibility to cash-flow volatility.

"There has to be innovation in terms of financing," said Amitabh Das Mundhra, director of Simplex Infrastructures Ltd , arguing that the risk factor declines over an asset's life. Simplex builds roads, power utilities and sewage systems.

"It's not a liquidity issue. It's the viability issue people need to address," he said.

Under contract terms for newer projects, companies are responsible for design, execution and funding. In return, they have control over the asset for a few decades to reap rewards, before handing it back to the government, the original owner.

Builders want longer concession periods and better terms to attract debt and equity financing for 15-30 years' tenure that infrastructure favours and is especially needed for the latest round of bidding for large build-operate and transfer (BoT) projects.

OVERSEAS MONEY

Debt-burdened developers have been looking to the equity markets to raise funds, although many market insiders say the window for equity-raising is open only to the strongest players.

GMR Infrastructure , a stakeholder in New Delhi's international airport, one of the busiest in the country, managed to attract just over half the $1 billion it is hoping to raise during an investor roadshow this month, banking sources said.

So far, private equity firms have not put any money into construction this year and invested just $160 million in 2008, Thomson Reuters data showed.

"The government has put a lot of restrictions and that, sometimes, the private equity funds and (foreign) pension funds are not comfortable with," said Vishwas Udgirkar, executive director at PricewaterhouseCoopers India.

He said infrastructure developers will be constrained until they can find more sources of funding.

"Unless and until they can tap more avenues for raising equity, it's difficult for them to go after more projects," he said.

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India needs funds, policy for infrastructure

NEW DELHI, July 2 (Reuters) - India's efforts to revamp its creaking infrastructure are constrained by shortage of long-term finance and policy initiatives are needed to speed up projects, the government said in a report on Thursday.

In an economy survey, ahead of an updated budget on Monday, the government said it was a "challenging task" to achieve $500 billion investment the Planning Commission estimated was needed over five years to 2012 to upgrade the country's overburdened roads, airports and other facilities.

Foreign borrowings for infrastructure projects fell to $6.92 billion in the fiscal year ended in March from $10.2 billion a year before, the survey said.

Equity offerings by private-sector infrastructure companies slumped to 147.2 billion rupees ($3 billion) in 2008/09 from 870.3 billion rupees a year earlier, it said.

The infrastructure sector has come into focus following a slowdown in the economy, which grew 6.7 percent in 2008/09 in its weakest pace in six years and well below the 9 percent and more seen in the previous three years.

Even when a project achieved financial closure further delays were caused by disputes over land acquisition, raw materials and capital goods shortage, environmental issues and inadequate availability of skilled workers, the survey said.

"These problems have wide ramifications," it said. "There is no option but to address them systematically as timely implementation of projects is critical for ensuring their financial viability," it said.

National Highways Authority of India (NHAI), which builds, maintains and manages highways, could receive bids only for 22 projects in 2008/09 as the bidders indulged in "cherry-picking" for want of funds, a NHAI official told Reuters in April. ($1= 47.8 rupees)

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Indian infra a stronger theme post-budget: Kotak

MUMBAI, July 7 (Reuters) - Indian infrastructure has emerged a stronger investment theme post-budget on plans of higher government spending and improved external funding environment, a top strategist at India's Kotak Group said on Tuesday.

Alroy Lobo, who oversees about $2 billion as chief strategist and global head of equities for the asset management arm of the group, said he also favoured consumption given India's demographic advantage and thrust on spending in rural areas where most of its people live, but infrastructure remained his top bet.

"Infrastructure is clearly the bet I would like to place on," Lobo told Reuters in an interview.

"If you look at the infrastructure programme, they have seen massive increase in expenditure," he said, referring to the budget unveiled on Monday.

In his budget speech, Finance Minister Pranab Mukherjee promised greater flexibility to government-run Indian Infrastructure Finance Co. to fund projects and asked state governments for speedy implementation of projects.

The budget allocated 128.87 billion rupees for urban infra, 87 percent higher than a year-ago, and provided 39.73 billion rupees for housing and basic amenities to the urban poor.

It also raised spending for national highway development programme by 23 percent over 2008/09, set aside 10 billion rupees for irrigation projects and aimed to increase investment in infrastructure to more than 9 percent of the GDP by 2014.

"Even if you assume slippages and you assume it's not 9 percent but 8 percent, the sector is going to grow at a very strong pace in excess of 20 percent," Lobo said.

"Which industry will give you sustainable growth story of 20 percent plus?" asked Lobo, whose firm holds shares such as Larsen & Toubro and Bharat Heavy Electricals .

He said the segment had contracted significantly in 2008 on fears a funding crunch would derail infrastructure projects.

Now, the pressure had eased and external commercial borrowing market revived, giving hopes that many projects, which were still on the drawing boards, will start getting executed.

"There is ample global liquidity which is wanting to find a place to rest," he said, adding Indian would be a major gainer given a strong government and easing geopolitical risks.

He said both the equity and bond markets over-reacted to the budget on Monday, with shares dropping nearly 6 percent and bond yields rising the most in three months, mainly due to projected fiscal deficit of 6.8 percent and higher borrowing programme.

But Indian shares' valuations look fairly attractive, Lobo said, adding he expected a major rebound in earnings for local firms in financial year 2011.

"When you look around the world, we are in a natural sweet spot and now we have got a very strong government," Lobo, one of whose infrastructure funds was among the world's top 100 performing stock funds in quarter to June, said.

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Wagon makers demand infra push, more trains

MUMBAI, June 30 (Reuters) - India's wagon makers have demanded speedy execution of rail infrastructure projects, clearing pending proposals for private participation and more passenger trains in the upcoming budget.

India's rail budget, which allocates funds and announces reforms for the sector, is to be announced on July 3 by Mamata Banerjee, the newly-appointed rail minister.

"The Indian Railways need to ensure an increased contribution of the rail sector towards infrastructure creation and enhancing the growth pace of the Indian economy," the Associated Chambers of Commerce and Industry of India (ASSOCHAM) said.

The railway's outdated technology, poor condition of its stations and increased competition from roads are some of the impediments blocking the growth pace of the Indian economy, ASSOCHAM said in a budget recommendation in June.

India's economy grew 6.7 percent in 2008/09, its weakest in six years, well below 9 percent rates of the last three years.

The world's second-fastest growing major economy is on a drive to improve its creaky infrastructure and boost rail connectivity between industrial hubs and major ports.

With a 63,327-kilometre long network, the railways forms an integral part of Indian life, transporting over 18 million passengers and over 2 million tonnes of freight daily.

While work on the west and the east dedicated freight corridors, spanning about 2,800 kilometres, has started, company officials said there is scope for a southern passage too.

"The railways now should look at the south, south-east and south-west corridors. There is huge cargo available, which is moving by road, which the railways must target," AK Vijay, vice president, commercial, Texmaco Ltd , said.

Currently, roads carry about two-thirds of the country's total cargo, while rail carries just a third, Vijay said, adding, "This total lopsiding in freight movement has to be corrected."

SECTOR DEMANDS

Wagon makers such as Titagarh Wagons , BEML and unlisted firm Jessop expect a boost in spending on long-distance, faster passenger trains and new metro rails at India's growing cities, to help gain orders.

They also demanded orders from the railways to be placed up to two years in advance to help planning for long-term production and to ensure timely deliveries of wagons. Currently, the railways places orders annually.

Rail operators, on the other hand, want stability in haulage charges to enable long-term contracts and reduce turnaround time, officials said.

"Frequent changes (in rates) cause problems for us. It's not possible to pass on all the charge (to users)," Sachin Bhanushali, president of Gateway Rail Freight Ltd, a unit of Gateway Distriparks , said.

Arshiya International and Sical Logistics Ltd also have licences to run container trains in a market dominated by state-run Container Corp of India.

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India to ease rules for road project investments

MUMBAI, July 10 (Reuters) - India aims to reform policy and ease investment rules for infrastructure projects in an effort to attract capital to rebuild and expand its overburdened road network, the road transport minister said on Friday.

The government hopes to reduce the likely gap between planned and actual investment by ensuring more financial participation and through measures to improve the risk-return equation for private players, Kamal Nath said in a meeting with investors and bankers.

"The lack of roads, and in the larger context, all of infrastructure, is a major challenge to our economic reform programme," the minister said.

The National Highways Authority of India will seek bids for 6,563 kilometres of road projects in the next two quarters costing 604.8 billion rupees ($12.4 billion), its chairman told Reuters on Friday.

India has a road network of about 3.4 million km (2.1 million miles), of which about 70,000 km are national highways.

Nath said the government expected to add 12,000 kilometres of roads this year at a cost of 1 trillion rupees ($21 billion), and said preference would be given to the toll model for new roads.

Nearly 60 percent of the new roads are planned on the toll-based model, he said.

"We should look to toll roads as far as possible. We should look to build up specialised tolling companies, as in Europe," he told reporters at a press conference after the meeting.

Earlier this week, Nath told Reuters the government had earmarked $20 billion a year for road building and expected foreign investors to fund half of this.

In its annual budget this week, the government raised funding for national highways by 23 percent, and provided for state-run India Infrastructure Finance Co Ltd to refinance bank loans for long-term infrastructure projects.

India's road expansion program has been hampered mainly by lack of access to funds, but other structural problems have also stymied investment, including the process of offering and bidding projects.

Nath said the government was also looking at improving documentation to keep investment attractive, and has already taken steps related to streamlining land acquisition.

"We have decided to award bids only once possession has been taken for 80 percent of the land, and notifications have been issued for the balance 20 percent," he said. ($1= 48.7 rupees)

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28 arrested in India for protesting power outages
15 July 2009

LUCKNOW, India (AP) - Police fired rubber bullets and arrested 28 people for allegedly setting fire to government property during a violent protest against power outages in northern India as it reels under a heat wave, an official said Wednesday.

Three people were injured in the firing at protesters, who set on fire a state-owned utility's electricity transformer and a truck on Tuesday in Gorakhpur town, Uttar Pradesh state, said Surendra Srivastava, a police spokesman.

He said 11 people were arrested in Gorakhpur for blocking roads and disrupting traffic over complaints that homes have been getting power for only three hours a day.

Another eight people were arrested in Mahoba, another town in the state, for allegedly beating up government workers at a power supply center, Srivastava told The Associated Press. Other arrests were made in the state capital, Lucknow, and three other towns.

Those arrested were charged with rioting and attacking government workers, punishable by up to three years in prison.

Uttar Pradesh, home to 180 million people, is India's most populous state and one of the poorest. Its inadequate energy infrastructure has been unable to cope with the high demand for electricity as temperatures have peaked above 104 degrees Fahrenheit (40 degrees Celsius) in recent days.

The power shortages have left people without air conditioning or fans -- and, in some cases, without water, as electric pumps failed -- for hours each day.

Also Tuesday, angry protesters set some government buildings on fire in Amethi, a town represented in India's Parliament by Rahul Gandhi, the son of the ruling Congress party chief Sonia Gandhi. Traders, attorneys, teachers and students joined the protest.

Delay in monsoon rains by three weeks or more in northern India has hit power generation with water levels dropping in several dams.

"The Uttar Pradesh state gets 5,400 mega watts of electricity against its requirement of 6,200 mega watts. The paucity of 800 mega watts is leading to frequent power cuts," said Shailendra Dubey, an executive engineer with the Uttar Pradesh Power Corporation Ltd.

India faces chronic power shortages amid growing demand, spurred by its rapid economic growth, and a lag in building new power stations.

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India needs $70 bln investment in roads - minister

NEW DELHI, July 17 (Reuters) - India will need to spend $70 billion on building roads over the next three years, Transport Minister Kamal Nath said on Friday, as it looks to infrastructure spending to stimulate demand and boost the economy.

Nath, speaking at an investors' conference in Singapore, said $40 billion of that could come from private investors, with a quarter of that coming for foreign investors. His comments were released by his office in New Delhi.

Nath had previously said he wanted foreign investors to fund as much as half of the $20 billion a year earmarked for road building.

India has a road network of about 3.4 million km (2.1 million miles), of which about 70,000 km are national highways and has set up a target of building 20 km of roads per day.

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Coal fires up India's farmers against new power plants
1 August 2009
Agence France Presse

Rajni Ramakan Patil has a message for the energy companies that want to build coal-based power stations on the land that she and two generations of her family have farmed for more than 50 years.

"Even if you give us gold, we won't leave this place. This is our land," she said.

Rajni and five other families from the village of Poinad cultivate a small parcel of land on the flat and fertile plains near the coastal town of Alibag, about 130 kilometres (80 miles) south of the western city of Mumbai.

The land, used for sowing rice crops and growing vegetables like okra and white onions, is among 8,500 acres (3,400 hectares) earmarked for the construction of four giant thermal power plants.

Activists opposed to the development fear it could destroy the livelihoods of thousands of people in the area, pollute the clean air and soil and create health problems among the poor farmers and their families.

"They only know how to sow, how to manage fields, how to harvest, how to fish," said Satish Londhe, who is spearheading the villagers' fight against the proposals.

The situation in the lush foothills of the Western Ghats mountain range embodies the problem facing India: how does it meet the increasing demand for energy as the country's population explodes and economic growth continues.

According to the International Energy Agency, more than half of the world's energy demands by 2030 will come from India and its fellow emerging economic powerhouse China.

But while China was reportedly building two new power stations per week, India's energy infrastructure has struggled to keep pace with rapid growth.

Some 400 million people currently lack regular electricity and even where it is available power cuts can be daily occurrences.

Maharashtra Energy Generation Ltd, a unit of India's largest private utility firm Reliance Energy Ltd, Tata Power and the other companies involved in the proposed plants say the 7,700 megawatts produced will ease supply problems.

The villagers and environmentalists supporting them accept the need for more electricity but question whether coal is the answer.

With concern about high levels of greenhouse gas emissions from the burning of fossil fuels, they want renewable energy, which currently supplies about 25 percent of India's electricity, to be given greater priority.

According to Greenpeace India, wind, solar and tidal power could provide up to 35 percent of the country's power by 2030, with less environmental damage and social consequences.

"People don't want the project," said Vishnu Mhatre, a medical doctor who runs a clinic near the proposed power plant sites. "They want change but they don't want pollution.

"They want electricity but electricity can be provided by wind or other renewables."

But India -- the world's third-biggest producer of electricity from fossil fuel -- appears set on coal, which at present provides just under 55 percent of the country's power.

The ministry overseeing the industry maintains that coal will continue to take "centre stage of India's energy scenario" in the years to come, calling it a "unique ecofriendly fuel service to (the) domestic energy market".

Retired Admiral L. Ramdas, a former chief of the Indian naval staff, lives in Alibag with his wife, Lalita, who sits on the board of directors of Greenpeace International.

He called for more use of wind power and energy storage and described the potential displacement of thousands of farmers at a time of chronic food shortages in some parts of rural India as a "crazy, crazy situation."

The fight between India's fabled "common man" and at least two of its biggest corporate beasts might seem unevenly matched, but there is a precedent for a victory against the odds.

Proposals for another power plant in the southern state of Karnataka were shelved after popular protests.

"Even a project delayed is a limited victory," said Ramdas. "We will carry on. We will wear them out. They won't wear us out."

[hkskyline]

India to continue reforms for higher growth-finmin

NEW DELHI, Aug 4 (Reuters) - India will continue reforms to get back to a higher growth trajectory of at least 9 percent at the earliest and encourage state-run firms to sell stakes through public offerings, the finance minister said.

Asia's third largest economy was hit hard by the global crisis and expanded by 6.7 percent in 2008/09 (April-March), its slowest pace in six years and much lower than growth rates of 9 percent or more recorded in the previous three fiscal years.

A government survey last month said India needed to make sweeping reforms including removal of fuel subsidies, and speed up infrastructure development to attain 7 percent growth in 2009/10 (April/March).

"...it should be clear that the process of economic reforms that began in the early 1990s will continue in right earnest so that the economy is back on the path of 9 percent plus growth at the earliest," Pranab Mukherjee told industrialists on Monday.

[hkskyline]

IDFC eyes new fund, valuations a challenge

MUMBAI, Oct 6 (Reuters) - India's IDFC Private Equity, an arm of Infrastructure Development Finance Co Ltd , could raise its fourth fund for large infrastructure projects in late 2010, although rising valuations are a challenge for deals, a top executive said on Tuesday.

IDFC Private Equity, India's largest infrastructure-focused fund, has spent about 40 percent of IDFC Private Equity Fund III, which was closed in May 2008 after raising $700 million, chief executive Luis Miranda told Reuters in an interview.

However, it has not done any deals in a year as valuation expectations have shot up, he said.

"We could be back in the market 15 months later, by end 2010, for a new fund," said Miranda. "Today, if I were to raise a fund, it would be around $700 million."

"There are tremendous investment opportunities. The challenge is valuation," Miranda said.

India's benchmark stock index <.BSESN> has risen 75 percent so far this year, raising the valuation expectations of Indian entrepreneurs looking for partners and investors.

Many firms have raised funds via stake sales or initial public offerings as the market has surged. Share sales have raised more than $15 billion this year, most of it in recent months.

"One of the significant challenges is the stock market," said Miranda.

"Certainly, valuations are so high and investor appetite is so strong that people will say, 'I'd rather list my company rather than being stuck with a stupid private equity company on my board trying to tell me how to run the company'."

INVESTMENT EXITS After being unable to exit investments last year as the stock market slumped by more than half, the firm was now working on about half a dozen "liquidations", either full exits via trade sales or initial public offerings of shares, he said.

Ashoka Buildcon, an IDFC-backed construction company, has filed an application for a stock market listing, he said.

"We are comfortable with the pace of the investment. We have done four deals, which has been slower than before but it has been larger sums of money," said Miranda.

"What have been not been comfortable is the work we have been spending on our portfolio companies. We thought we would have 8 liquidity events in 2008, but we ended up with zero," he said.

He said the firm was spending more time improving the operations of companies it had invested in, saying they had to learn to survive in the medium term to take advantage of the long-term potential of India economic growth.

IDFC Private Equity has investments in 26 Indian companies, its website showed. Miranda said those that were focused on exports or related services, such as port builders, had been hit hard by the global downturn and the fund would focus more on firms driven by domestic infrastructure needs.

[hkskyline]

Solar lantern lights up rural India's dark nights
22 October 2009
Agence France Presse

For more than 100 Indian villages cut off from grid electricity, life no longer comes to an end after dark thanks to an innovative solar-powered lantern that offers hope to the nation's rural poor.

While cooking, farming and studying after sunset were once a struggle using inefficient kerosene or paraffin lamps, the solar lantern now provides a cheap and practical source of light.

The simple device, which is charged during the day from a communal rooftop solar panel, uses between five and seven watts of power and has a battery that lasts up to eight hours.

It also boasts a socket for charging mobile phones and a hand crank for topping up the power.

Villagers pay between three and six rupees (six to 13 US cents) a day to rent the lantern under the "Lighting a Billion Lives" (LaBL) scheme, which was launched last year to promote solar energy as the environmentally friendly answer to India's energy shortages.

"I keep my shop open as late as 9:00 pm. All my fish get sold by that time," a fish seller in Govindorampur district in West Bengal state who uses the lamp told researchers.

He is one of those whose lives have been transformed by the first wave of 5,000 lanterns distributed across nine states in India.

The LaBL scheme, run by The Energy and Resources Institute (TERI) in New Delhi, plans to eventually put 200 million lamps into use.

Organisers say each lamp should work for ten years, saving between 500 and 600 litres of kerosene which would produce about 1.5 tonnes of carbon dioxide.

Government figures show more than 10,000 impoverished Indian villages have no access to grid electricity, but the solar revolution could also change middle-class lives in urban India, where energy demands have soared.

Power cuts are common even in the smarter suburbs of New Delhi, Mumbai and Kolkata as residents soak up fragile supplies with air-conditioning units, freezers and washing machines.

While per capita electricity use in India -- 704 kilowatt hours in 2007-2008 -- is far lower than the 8,000 kilowatt hours per capita in many industrialised countries, there is no sign of consumption slowing.

"There is something like 30 percent overdemand. There's significant undergeneration as it is, even if you don't electrify any more," said Joel Slonetsky, a researcher with LaBL.

One "green" solution to the outages is a solar-charged inverter for backup electricity during cuts.

"People have started realising the scarcity of power," said Chandra Sekhar, CEO of Solar India Solutions, which sells the inverters in the southern state of Andhra Pradesh. "They have become scared so they don't mind spending an extra little."

Sekhar said most of his clients belong to the "domestic middle-income group" and they choose to shell out between 3,000 to 6,000 dollars for the solar inverters that work as well as traditional ones.

"Right now the technology is at a stage where we can say that it stands side by side with conventional electricity," said Ajay Prakash Shrivastava, president of the Solar Energy Society of India.

Increased efficiency and new materials mean the price of solar-powered equipment has been coming down for years, although initial installation costs are steep, said Shrivastava.

While the long-term benefits may be an incentive for some, he acknowledged that most people who have opted to use solar energy have done so out of necessity rather than a desire to be environmentally friendly.

"There are certainly people thinking in that direction," said Shrivastava. "But that group is not very large."

Slonetsky said although the Indian solar industry is constantly evolving, the options for domestic solar power use are still somewhat limited.

"It may just be a lag both in terms of consumer awareness and supply here." he said.

It is certainly not for lack of sunshine -- India receives a high level of solar radiation, equivalent to more than 5,000 trillion kilowatts or up to 3,200 hours of sun a year, according to government statistics.

The government hopes to harness this potential into 20,000 megawatts of solar power by 2020 as part of its National Solar Mission to promote renewable energy.

The plan envisions railway signals and water pumps eventually running on solar technology, but for now, villagers are content with the portable lamps that have made daily tasks such as cooking and cleaning easier.

"The lanterns have changed our position in society," said Ayesha Begum from Sahsoul village in the eastern state of Bihar.

[hkskyline]

Crisis? At India forum, it's back to business as usual

NEW DELHI, Nov 9 (Reuters) - After a year of global economic crisis and political limbo, investors in India are returning to business as usual -- this time with real hope that a new government might actually bring in needed financial reforms.

The word "reform" has been touted in India for years but if discussions at the World Economic Forum are anything to go by, Asia's third-largest economy may have turned a corner with its political will to help it reach 9-10 percent growth rates.

With the re-elected Congress-led government freed from the shackles of communist support, reforms from foreign investment in retail to recycling India's $400 billion in domestic savings to help fund infrastructure projects were seen as real possibilities.

Aside from 2005-2008 when India's economy expanded by more than 9 percent annually, the Asian giant has struggled to keep up with China's breakneck growth, hampered by infrastructure bottlenecks, red tape and an often plodding financial system.

"There is now political stability," said Saurabh Agrawal, head of investment banking for Bank of AmericaMerrill Lynch in India. "The government is making the right noises and it looks like there is political will."

Congress's May general election win, recent state victories and a weak opposition have freed the hands of reformists in the government, including Prime Minister Manmohan Singh.

"India is in a sweet spot," one senior banker said, as the centre of gravity over the last year has leaned towards emerging economies, while Western economies struggled to stay afloat.

"If you want a high rate of return, where would you invest? Europe? Brazil? Russia? China?" he added, referring each time to their economic or regulatory problems. "India does stand out."

Singh set the tone on Sunday, saying that clear signs of an upturn in the economy were laying the path for the expansion of long-term debt markets, deeper corporate bond markets, stronger insurance and pension sectors, and improved futures markets.

At a host of conference sessions, calls for reform resonated around the rooms -- foreign investment in universities, making highway concessional contracts better for private investors, changes to quicken court cases over contractual disputes.

Investors have also been buoyed by plans this week to sell stakes in profit-making state companies.

Many said they had heard all this before.

But there appeared genuine optimism that Singh and economic policymaker Montek Singh Ahluwalia, architects of India's ground-breaking market opening in 1991, now have the clout to fend off political pressures.

CUTTING THE KNOT

For many investors, financial reform could be the sword to cut the gordian knot.

India's savings rate is nearly 40 percent of GDP, but a restrictive and underdeveloped financial system means little is funnelled to capital markets to help fund, for example, the $20 billion a year the government wants to raise for highways.

Robert Morrice, chairman and chief executive of Barclays Asia Pacific, pointed out that around 40 percent of India's household savings was invested in physical assets like gold -- hardly the stuff of productive investments.

The government plans to introduce in parliament by December long-delayed bills proposing raising foreign stake limits in the pension and insurance sectors.

"To get 9-10 percent growth rates, India will need reform," said Kevan Watts, head of Bank of AmericaMerrill Lynch in India. "They have to ensure domestic capital flows into investments."

But participants warned that there were also far deeper problems to solve -- higher hanging fruits for a government apparatus that is notoriously slow and bureaucratic.

"Less than half of India has access to a bank account," said Kalpana Morparia, chief executive officer of J.P. Morgan in India. "It's not just about insurance and pensions."

Getting India's obselete infrastructure moving, and helping reduce growth bottlenecks, was for many the biggest challenge. The government has said it needs to spend $500 billion in the five years through 2012 on infrastructure.

But many question whether the Congress party, beholden to a rural base wary of change, can carry out bold reforms. And officials admitted there was little chance that India could emulate China's quick building of roads, ports and airports.

"We are not only the loudest democracy, but the rowdiest," said Kamil Nath, the transport minister.

[simcard]

India is stupid, it sends its labour and man power to UAE where they are proply utilised by the Emirates, record buildings growth and all, yet the same Indian labour cannot build thier own infrastructure in thier own country

"We are not only the loudest democracy, but the rowdiest," said Kamil Nath, the transport minister.

this guy needs to STFU his democracy is rubbish and foul

[Onn]

Originally Posted by simcard

this guy needs to STFU his democracy is rubbish and foul

....?

[hkskyline]

Bankers seek concession for infra sector lending
14 January 2010

MUMBAI, Jan 14 (Reuters) - Union Bank of India said on Thursday bankers have sought concession for easing lending to the infrastructure sector at its pre monetary policy meeting with the central bank.

"The norms for infrastructure sector lending are a roadblock and we have sought some concessions," M.V.Nair, chairman and managing director, said.

"This I think will help long term lending to the sector," said Nair, who is also the head of the Indian Banks Association, the apex industry body for bankers.