Rakesh Ranjan, Adviser, Niti Aayog. Investment opportunities in MRTS March 13, 2018

Transcription

1 Rakesh Ranjan, Adviser, Niti Aayog Investment opportunities in MRTS March 13, 2018

2 Two Development Narratives India: A fast growing vibrant economy 2

3 Indian Economy: High Growth but severe development Challenges 3

4 Aspiration of People is high 4 4

5 Indian Economy is poised for long terms high growth: Creation of key infrastructure has been accelerated.

6 Road: Major improvement alike in Highways and Rural Roads National Highways Number of Completed Roads (KMs) Number of Awarded Roads (KMs) , , , , , , , , FY Average FY 15 FY 16 FY 17 FY Average FY 15 FY 16 FY 17

7 Improvement in laying lines and electrification of railways. New Lines (KMs) Electrification (KMs) ,375 1,730 2, FY 16 FY 17 0 FY 15 FY 16 FY 17

8 Airports: Passenger Movement Increase by 75 million in Two Years Passenger Movement - Million Passenger Per Annum FY 15 FY 16 FY 17

9 Ports: Highest Ever Capacity Addition Capacity Added in Major Ports (MTPA) % Increase FY 16 FY 17

10 Power: Unparalleled Pace in Village Electrification Villages Electrification Since FY Villages Electrified

11 Big Jump in Cumulative Installed Capacity for Renewable Energy Cumulative Installed Capacity (GW)

12 Continuously Increasing Solar Capacity Installed Cumulative Capacity (GW)

13 Massive Increase in Cumulative Wind Capacity Installed 25 Cumulative Capacity (GW)

14 Indian Economy is poised for long terms high growth: Vibrant economy Structural transformation is incomplete. Transport including MRTS to play a key role

15 Structural transformation of economy is far from complete A central task of India economy is to create non-farm jobs 15

16 Key policy goals Key Policy Goals High growth Rate Inclusive Growth Investment in urban transport is must for all these goals. Sustainable Growth 16

17 MRTS: Critical role in city + regional transport: Paris Metro rail within city and RER for rapid regional mobility 17

18 MRTS: Critical Role in city + Regional Transport: Paris Metro rail: Rapid expansion but funding for phase-iv needed. Regional connectivity need major investment RRTS project Sub-urban Rail 18

19 Investment requirements In Rs. Trillion= Rs. 1 lakh cr Items MGI HPEC Working Group Sprawl Desired urban form Urban Roads Transit Others Total Compactness and investment requirements: Raise density by 2500 per sq km: reduces by Rs. 4 trillion. Reduction by 2500, requirement Increases by Rs. 6.5 trillion.

20 Sub-urban rail Carries 53% of Indian rail passenger Revenue share 7% By 2030, needs additional investment of Rs. 1 trillion. Partnership between State and Centre needed.

21 Investment requirements till 2030 Average annual requirement for urban transport in India Rs. 1 trillion

22 Investment in Metro Rail (Govt sector) MRTS segment is hugely underfunded Total Expenditure in Metro Projects (in trillion rupees) 22

23 Issues for deliberations How to improve investment in MRTS in India? Social benefit of MRTS is very high. Hence huge opportunity cost.

24 Issues for deliberations MRTS is regulated sector. Why less projects are rolled out? Financial viability of projects have to be improved.

25 Many positive factors GDP growth Nuanced PPP regime High Population density Metro Policy

26 Indian GDP growth is improving : 10% 9% 8% 7% 6% Quarterly GDP Growth Rates (%) 9.1% 5.7% 6.5% 7.2% 5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q

27 Govt is committed to accelerate growth with equity Capex by Government has been high

28 CAPEX/TE has improved for both Centre and States Capex/TE Centre Capex/TE State Quality of Govt. spending improved: Higher Cap-ex/Total expenditure in Govt. (Centre as well as State)

29 CAPEX/GDP has also improved for both Centre and States Centre and States combined (Rs. lakh crore) Total 3 years In last 3 years, government has made investment worth 19.5 lakh crore Capex Centre/ GDP Capex State/GDP

30 Broad contours of enabling framework Headed by the PM, an apex policy making bodyreviews and approves - polices and projects Cabinet Committee on Infrastructure PPP Appraisal Committee and Empowered Institution PPP projects are appraised By a Specialised unit in NITI Aayog VGF Scheme Creation of Institutions to arrange finance Standardisation of Bidding documents: Model Concession Agreements Bidding documents like RFQ and RFP Bidding documents for selection of Transaction Advisers Guidelines and Manuals. EPC Manual 30

31 Issues for deliberations How to raise viability of projects

32 Technology Many options available City Morphology and growth potential important MRTS should be brought centre stage of EV mobility paradigm. - Investment in charging - Batteries.

33 How to improve financial viability? Price sensitivity Limitation of raising user charges Uncertainty due to Price Fixation Committee World over, subsidising MRTS is common.

34 Institutional arrangements Creation of a MRTS fund Creation of a MRTS corporation Integration of Land and Transport State Governments have to be brought centre stage.

35 Role of State Raise financial viability Integration of different modes Strategic densification Vary concession period State Governments have to be brought centre stage.

36 Issues for deliberations: Innovative finances Singapore : variations in FSI are linked to the location of metro stations and to the network of main streets Singapore: densification and metro corridors 8

37 Issues for deliberations: Innovative finances Mumbai: Need strong institutional arrangement for strategic densification.

38 Debt Financing: Inter-generational parity Kochi Metro Rail; Rs crore Bangalore metro Phase 1: Rs 650 crore Innovative finances possible.

39 Conclusion High Growth Economy. MRTS- hugely underfunded Govt. and private to come together States have important role Innovative finances possible.

40 Thank You