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About 42,000 crore would soon find its way into various projects and schemes, mostly to do with different kinds of infrastructure. You might like to read the break-up here. All this money comes from our very own Sarkaar. Talking about sarkaar, it’s worthwhile to talk something about a state-sarkaar in particular, the AP government. [20 Dec update - above amount approved by Lok Sabha]

Andhra-Pradesh Government grounded a holy three thousand eight hundred something crores irrigration project this Wednesday. So now you know how much money it takes to divert 160 TMC of water from the Pranahita river to an area of 12,20,000 acres in the drought-prone areas in the Telangana region. How much of this works, we shall see after four years. But, kuch bhi kaho, AP seems to be so-proactive man! I mean if on one hand, there is this irrigation project, on the other hand it almost seems to have secured about 1,700 crore rupees from some German company, so that it can execute a 1600 Mw thermal power plant! Way to go!

I was happy to read a new outlook on Tourism in the light of this global meltdown, let-down and all kinds of downs. Someone thinks that ‘medical tourism’ in India is bound to benefit from the current crisis and the moment I read this I was like – wow, that’s so true! I mean, crisis or no crisis, people are always concerned about their health. And what better way of getting your health taken care of, than making a trip to India – after all, Indian docs are pretty efficient and charge so much less! That’s pretty much for this post – shall connect later. Take care of  your health and all that!

Although it doesn’t mean much, but just for statistics sake, infra-growth in India for Oct this year was recorded to be more than 3% higher than what it was in October last year. And now some hard-core stuff.

Railways

The first Indian luxury train to have a pan-country presence should commence operations from third quarter of 2009 (will cost about 50 crores). But this whole goddamn thing is supposed to be bloody costly yaar. Whatever!

Nuclear Energy

If you go back to the last to last post (December 2008 Updates – 1 ), the last two lines would read – “Jisko dekho vohi, nuclear power me interest dikha raha hai! Good hai, good hai.” I just thought that I would make something clear about the ‘kind’ of interest I was talking about, especially from private players’ point of view. Private players  haven’t been planning to ‘run’ any Nuclear Power plant as such. I had only been referring to their interest as component suppliers – you know, like supplying techonologies, reactor stuff and all that to government agencies who run the real plants. But now it appears that even operation and management of the Nuclear plants could be passed on, albeit in a phased manner, to these private folks. This I say based on my understanding of the first paragraph of a news report which reads:

Indian private sector companies need not wait for an amendment of the Atomic Energy Act to participate in the development of nuclear power in India. They can well do that within the framework of the existing Act — by joining hands with the public sector Nuclear Power Corporation of India (NPCIL), says Dr Anil Kakodkar, Chairman, Atomic Energy Commission.

Finance

In its continuous effort to ensure more and more money for projects, the government is seeing to it that FDI could soon be possible even through Options! Not that money is not already piling up and up – for example this IDFC seems to be in the process of raising $1 billion for an infrastructure focused Project Equity Fund. Anyway, let me just wrap up this post with the this last bit that is nothing but a follow-up news on an earlier report about India trying to double its loan requirement from the WB – the World Bank Group recently seems to have cleared its ‘India Country Strategy 2009-12′ that would mean lending program of $14 billion to India in the next three years.

ONE – the FSP

It’s a funny assemblage of words – fiscal stimulus package (FSP). I am not sure who coined it but whoever assigned 30,700 bloody crore to it did a good job, so what if the indian infrastructure industry is still not satisfied (though the electrical energy people seem to be happy and all that).

Let’s focus on the break-up of this FSP (all figures below in crores)

1. additional expenditure : 20,000
2. excise duty cuts              :     8,700
3. profits to export             :     2,000

Obviously most of the 20,000 crore would be for infra projects but as of now, I couldn’t find how much exactly (and I see that I am not the only one who is not sure of the exact break-up of this additional expenditure thingy).

TWO – the tax-break

Besides a positive impact of this FSP on the infra sector – another step by the Government would prove crucial in sustaining the growth rate of the infra-industry. I am talking about government’s proposal to give a “tax-break” to the India Infrastructure Finance Company (IIFCL) for raising funds in the next couple of months. On financial terms this would mean that IIFCL can raise about 100 bloody billion rupees through these tax-free bonds by end March 2009. Not bad!

Three – faster clearance

In addition, the government hopes to “precipitate infrastructure projects worth Rs 100,000 crore” through faster clearances of public-private partnership projects. In this regard, I would like my readers to note that in the month of November itself, the government seems to have cleared road projects worth about 280,000 crore. Besides that, about 22 new SEZ projects have also been cleared. So, there is something definitely shady about this figure of 100,000 crore target unless Economic Times has messed up the numbers somewhere. Anyway, whatever be the numbers, “faster clearance” in itself is a good news.

All the best to everyone in the infra sector and before I end – id mubarak! May Allaha be with all and bless all and most importantly may Allah never forgive those, who in his name, kill people and destroy infrastructue!

Blasts happened in Mumbai and the after-effects can be felt all the way down in Bang – when did you hear about hotels slashing rates in peak tourist season? Sad. Anyway, it’s time to move on and present some of the latest updates in the Indian infrastructural sector.

In my post – Sailing through Crisis, I had mentioned about Indian government’s efforts towards getting SEZs recognized as a part of core-infrastructure sector.  RBI is still looking into the matter but hopes for a final nod now seem to be high.

In another not so old post titled – “Dedicated funds and more” I had remarked about NHAI’s strategies to retain attractiveness of the good old road projects.  The effort continues and the latest news is a revision in the toll structure – now the toll fee that the private player shall collect will be proportionately linked to cost of construction. And well, if none of these strategies work, NHAI might move on from the BOT model and try out the conventional Annuity stuff.

Few WISE researchers in TN have suggested that the wind energy capacity of the state (currently at 4000 MW) can be increased by 2.5 times – sounds good – should be considered by those running wind-mills. I really see power sector shifting slowly from reliance on coal and hydel-source to wind, solar and nuclear. Talking about nuclear, just like the last post, let this post end too, with an update on the rise of the nuclear power sector. While NTPC’s are joining hands with NPCIL to invest money in generating nuclear energy, Punj Lloyd is considering doing somthing similar too. Jisko dekho vohi, nuclear power me interest dikha raha hai! Good hai, good hai.

State elections almost always bring good news to villagers. AP’s CM is busy distributing funds to gram panchayats – to the tune of 146 crores so that health infrastructure could be boosted up (focus seems to be on clean potable water supply).

I had pointed out earlier how Kerala was expecting a massive fall in number of tourists. Thanks to the the Mumbai terror attacks, the tourism industry (including other sectors in Kerala) has been hit further. In fact, most places where international tourists reach mostly via Mumbai, like say Goa are pained in life.

To end today’s post, let me pick up from what I had to say about Nuclear Power in an earlier post. I was telling you guys about how the big private players across the world have been showing interest in putting their money and technology in this sector in India. As per today’s Business Line, “discussions are on with energy majors such as GE, Westinghouse of the US; Areva of France and Russian majors” for setting up clusters of nuclear power plants in identified ‘Nuclear Parks’ in the country, targeting about 1000 MW. It’s nice to see someone getting ready to tap this opportunity. I sincerely wish that the days of power shortage soon end. I sincerely wish that terror strikes don’t happen again. And I sincerely wish that elections keep coming so that the poor villagers end up getting more gifts, not only in AP but everywhere.

I had pointed out about the increment in WB lending to India for development project few days ago. In the same post, I had also pointed out about the proposed creation of a dedicated infrastructure fund worth 50 thousand crores (to be used to lend money to those who want to develop infrastructure projects in India). Fresh plans are to ensure that a portion of the extra money (3 billion dollars) that would come from WB – be made a part of this dedicated fund. By the way, dear readers should be told that IDFC and IIFCL are two leading public sector agencies that lend money for Infrastructural Projects in India and the would be the ones, managing this dedicated fund.

That’s all for now and let us all hope that the terrible things happening in Mumbai soon come to an end.

Here’s a question – if a union minister says that the growth rate of a particular sector could ‘drop a bit’ – how much drop would you be expecting? 2%? 5%? 10%?

Me talks about the union minister of tourism – Ms Soni who seems to have said publicly that the Indian Tourism sector is not going to be affected too much. Now I was in London last week attending the World Travel Market. Guess which state in India was doing awesomest business – Kerala. So don’t you wanna know what Kerala has to say on the cedit crunch’s affect on the state’s tourism industry? The state expects a holy 20% fall in tourist arrivals in the next two months! Such contrasting remarks from politicians!

It always feels good to begin with a good news. One infrastructure construction company bagged a 600+ crore job in Afghanistan while another bagged projects in India worth 500+ crore. If sarkaar keeps saying that the Indian growth story shall continue – we do have reasons to believe that, don’t we?

Indian government comes up with one new idea daily to ensure that the infrastructure sector doesn’t suffer too much from the current shortage of credit in the market. The latest update is that it is pressurizing RBI to classify SEZ projects as part of the infrastructure sector (this would help SEZ projects get loan at lower interest rates).

In Tamil Nadu, bechaare industry-vaaley seem to be pained by the electricity board (TNEB). TNEB won’t allow them to run thir captive plants to their capacities, nor would it let them draw power from grids between 6 in the evening till 10 pm and on top of that, it has imposed a holy 40% cut on the peak industry power demand. Hope the regualtory body (TNERC) helps these fellas out. I guess during the election time, governments want to see the aam-aadmi getting more electricity (power? ) than the industries. Bloody politics yaar, what to do? Even AP is doing its best to get more power supply from here there and everywhere.

And to end today’s post let me laugh a little bit. Ha ha. It’s a good and at the same time a funny update: thanks to the financial crisis, apne NRIs have started depositing their money in Indian banks now. I just hope that the trend continues even afterwards.

There’s a pretty happy news for infrastructure – Indian government is planning to create a dedicated fund of about 50,000 crore rupees for infrastructure projects. By the way, CII suggests that the government should indentify few most important infrastructure projects and focus on them first. I am sure that this will happen naturally but I am not so sure on how easy or difficult it would be do to figure out what are those important projects – how will that be determined, haan?

Business Line says that as per the latest study by Organisation for Economic Cooperation & Development (OECD), “private credit financing into 30 developing countries surveyed (including the BRICS – Brazil, Russia, India and China and South Africa) would decline by half between 2007 and 2009 from $600 billion to $300 billion.” I checked up the OECD site but couldn’t find any new report / publication which said so. What we should look forward is the ‘Economic Outlook’ publication from OECD  that would be released on 25th November. India from its own side is doing everything necessary to ensure more and more FDI (I pointed this out in the last post also). On this line, todays ET talks about reconsideration of the rule that prevents FDI in investing companies (Tata’s are lobbying for this change in rule). As of now, in India, FDI is allowed in Non-Banking Financial companies but not in investment companies.

FDI or no FDI, we always have the WB to fund the development projects! India is going to double the WB borrowing as per this ET report.

In the current market crisis, even the good old attractive road projects have slowed down. No wonder – NHAI is putting fight and relaxing its criterias.

The state of affairs at the Indian ports might be gloomy as I remarked in the last post – but if not the real ships, then racing yatches, what say? This is going to be true at least for the Kochi port. There is a pretty famous international yatch race called the Volvo Ocean Race held every three years. The interesting thing is that the route for the 2008-2009 race has been altered from previous years to include stopovers in the Middle East and Asia for the first time and more important than that – it is Kochi in Asia which has bagged this opportunity. Now that’s a nice tourism stunt (and you thought ports could be used only for sending and receiving containers!).