YOG INFRA Q1 2024 insights
INDIA's transport sector is undergoing major e-mobility transition through robust and attarctive policy changes, large investments by foreign car companies in India and a push for greening the public bus transport fleets across various states in the country. This is set to play a major role in transforming the value-chain (including the EV charging infrastructure being developed under PPP mode) of public and private transport mobility in India. The urban infra sector has also seen an uptick in PPP projects, including data centre infrastructure.
Read more in our latest insight for the country.
This is second publication on a 2-part insight series on India
January 2024
ADANI GROUP TO DEVELOP USD 6 BN DATA CENTRE INFRA
India’s Adani Enterprises has announced plans to invest USD 6 Bn in Data Center Infrastructure in Maharashtra state in India. The company has signed a memorandum of understanding (MoU) with the Maharashtra government and will spread over the next decade, ultimately developing 1GW of data center capacity.
The data center infrastructure, which will be set up in key locations such as Mumbai, or Navi Mumbai, and Pune, will be powered by renewable energy which will enhance green energy infrastructure in Maharashtra, and provide direct and indirect employment to 20,000 people.
INDIA BOT HIGHWAY CONTRACTS TO COVER BUSINESS RISK
The National Highways Authority of India (NHAI), India is planning key changes to highway contracts in the build, operate, transfer (BOT) model that include protecting concessionaires from less than estimated traffic. If the traffic is lower by a certain percentage, the government may allow concessionaires to claim compensation.
The private sector lenders have suggested that this variance should be set at 20% of projections. If the traffic is lower by more than 20% of the estimate, the government may consider to guarantee the shortfall, as it provides a level of comfort with respect to the debt service of the project. If the traffic is more than 20% of the estimate, the government may consider to take a higher share of the revenue than previously decided. The government is also deciding on new clauses to ensure an equitable distribution of construction risk and how developers may be repaid in case of project terminations.
Private developers have also suggested that the repayments be calculated based on the net present value of the unexpired concession. At present, the payment is based on the NHAI’s estimated project cost. This is a problem because the time lag between when the NHAI estimates the cost and the actual construction starting date can take up to 3 years, followed by another two years before the project turns operational. The cost escalation due to the time lag has to be borne by the developer in the current scenario.
The government authority is also proposing other modifications to contract terms, including the requirement that tolled highway projects be bought back in the event that a rival or new tolled road is built nearby. Investors are very concerned about the possibility of various governments developing road projects parallel to currently operating tolled highways because they fear revenue loss and traffic diversion.
Given that the lack of land has been a major factor in project completion delays, NHAI is also likely to provide lenders with information about the specifics and land status of each project.
INDIA PREPARES USD 25 BN BOT HIGHWAY PROJECTS THIS YEAR
India’s Ministry of Road Transport and Highways plans to tender 5,214 km of roads in the build, operate, transfer (BOT) model in 2024 at an estimated cost of INR 2 Trn (USD 25.2 Bn).
The government will tender INR 503 Bn projects in Uttar Pradesh state – the highest by value – followed by INR 394.7 Bn of projects in Maharashtra and INR 260.5 Bn of projects in Tamil Nadu. Karnataka, Kerala, Bihar, Andhra Pradesh and Odisha all have projects totalling more than INR 100 Bn each with seven more states – Madhya Pradesh, Haryana, Jammu & Kashmir, Punjab, Rajasthan, Telangana and Uttarakhand – making up the list.
INDIAN PORT RESTRUCTURING TENDER FOR CARGO BERTH PPP
Indian government owned Deendayal Port Authority is restructuring tender conditions for a project to develop and operate a multipurpose cargo berth. The authority did not receive any bids for a second call for proposals issued on 4 July 2023, adding that potential bidders cited policy uncertainty related to commodity exports.
India’s Ministry of Commerce and Industry on 20 July 2023 banned the export of certain varieties of rice, accounting for nearly 45% of the country’s total rice exports in 2022. Authorities also banned onion exports while restricting sugar exports indefinitely.
The Deendayal port, located in Gujarat state in western India, has 16 cargo berths. The planned facility will be the 17th and will be designed to accommodate ships of up to 100,000 dead weight tonnage (DWT) and requiring a draft of up to 15 metres. The request for proposal last year stated that the project would cost an estimated INR 17.19 Bn (USD 206 Mn). It requires the development of a berth with an optimal annual capacity of 18.33 Mn tonnes.
VIETNAM’S VINFAST LOOKS TO START INDIA EV OPERATIONS IN 2024
VinFast, a Vietnamese manufacturer of electric vehicles (EVs), is working to launch its operations in India. VinFast plans to sell its first two- and four-wheelers in India starting in Q3-2024.
The business has hosted dealer "clinics" in Vietnam with 30-35 possible Indian dealer partners, and it will unveil its distributor network, which will showcase both two- and four-wheelers. These cars will be imported by the business as fully assembled units (CBUs).
Although VinFast runs a combination of dealer-run showrooms, self-operated experience centers, and direct sales and showrooms in the US and Vietnam, the company plans to enter the Indian market gradually by first appointing dealers in sizable tier-1 cities before expanding to smaller towns and cities in the interior.
GUWAHATI TAKES THE GREEN ROUTE WITH 100 TATA MOTORS ELECTRIC BUSES
The largest commercial vehicle maker in India, Tata Motors, have announced that they have given 100 electric buses to the Assam State Transport Corporation (ASTC) .The 9-meter air-conditioned Tata Ultra electric buses that will operate on Guwahati's roads are intended to offer a convenient, safe, and comfortable means of transportation inside the city. These zero-emission buses are powered by cutting-edge battery systems, include the newest features, and are constructed locally using a next-generation architecture.
The state-of-the-art Tata Ultra EV e-bus raises the bar for metropolitan city transportation. This cutting-edge car optimizes energy use with its all-electric drivetrain, resulting in reduced energy usage and operating expenses. It guarantees zero emissions and has features like comfortable seating, easy boarding, and driver-friendly operations. It prioritizes the comfort and safety of its travellers with innovative features like air suspension, electronic stability control, electronic brake distribution, Intelligent Transport System (ITS), and panic button. This electric bus is a great option for urban passenger transportation needs and represents the dedication to greener public transportation.
INDIA PLANS ₹30,000 CRORE OUTLAY TO BOOST ELECTRIC BUS MOBILITY BY 2030
The Indian government is developing a strategy to establish a de-risking fund in order to increase the mobility of electric buses. The fund seeks to lower the risks for banks financing the public and private sectors' purchases of electric buses.
The government has acted in response to banks' unwillingness to provide loans for the purchase of electric buses. Currently, an inter-ministerial group is debating whether to create a fund with a maximum expenditure of INR 30,000 crore (USD). By 2030, the fund is anticipated to promote the installation of eight lakh e-buses.
TENDERS FLOATED TO PROCURE E-BUSES UNDER CENTRAL SCHEME
The Government has released tenders for the purchase of electric buses under the PM-eBus Sewa program. Under the scheme, 10,000 electric buses will be provided to 169 cities under the public-private partnership model.
The project would cost INR 57,613 crore (USD) in total, of which INR 20,000 crore (USD) will come from the federal government and the balance amount from the states. The government have announced that the cities without a scheduled bus service will receive precedence.
February 2024
INDIA INCREASES INFRA ALLOCATIONS TO USD 133 BN
Indian Government increased the outlay on infrastructure by 11.1 % to INR 11.11 Trn (USD 133 Bn) in the interim federal budget. The Government announced 3 rail corridors, viability funding to build an initial 1 GW of offshore wind, expansion of metro rail networks, as well as reiterating the government’s intent to redevelop existing airports and build new ones.
The 3 rail projects are:
· Energy, mineral and cement corridor.
· Port connectivity corridor; and
· High traffic density corridor.
The projects have been identified and will improve efficiency and reduce the cost of logistics. The government is working to conclude bilateral deals with foreign partners to ensure positive fund flows. Other announcements include free solar electricity for 10 Mn households, an affordable housing programme for the middle-class, a thrust on developing electric vehicle charging infrastructure, a year’s extension of tax breaks for investments by sovereign and pension funds, as well as another year of 50-year tax free loans to state governments.
Government also announced a target to set up coal gasification and liquefaction projects of 100 tonnes and financial assistance to buy machinery for biomass projects. It intends to develop infrastructure for business events and conferences, for tourism including on the Lakshadweep archipelago off the coast of southern India, as well as for religious centres.
INDIA’S PUNE METROPOLITAN AUTHORITY READYING ROADS PPP
India’s Pune Metropolitan Region Development Authority (PMRDA) will construct 2 sections of a proposed highway through public-private partnerships, repaying the development costs through credit notes. The two stretches, in Maharashtra state, will cost an estimated INR 5.5 Bn (USD 66 Mn). The detailed project report is close to completion, and the authority has already begun the process of acquiring land. While one of the stretches will be 5.7 km and will run from Lohegaon to Charholi, the other will be 4.8 km from Solu to Nirgudi.
INDIAN STATE-OWNED PORT PLANS CONTAINER TERMINAL PPP
Kottayam Port in India’s Kerala state is planning to build a container terminal, which will be partially privately financed. The new terminal will initially process about 40,000 twenty-foot equivalent units (TEUs). It can be expanded later depending on demand, without revealing an estimated project cost.
The port administration is likely to issue a public-private partnership tender within Q2-2024. Kottayam Port and Container Terminal Services runs an inland container depot situated on the banks of a lake. The planned container terminal will be used to transport the aggregated cargo to Vizhinjam International Seaport – built and operated by Adani Group – for onward voyage. Kottayam – with its numerous inland waterways – offers a route for exporters and local businesses to ship their goods to the rest of the country as well as overseas through the Cochin port
KARNATAKA BUDGET 2024: GOVT TO SET UP 2,500 EV CHARGING STATIONS UNDER PPP MODEL
The Karnataka government has suggested building about 2,500 EV charging stations throughout the state using a public-private partnership (PPP) model to strengthen the ecosystem for electric vehicles. Apart from EV charging stations, the government has also proposed to invest INR 35 Crore (USD 4.2 Mn) to set up 100 charging centers in partnership with power supply companies.
With the most public charging stations, Karnataka, which was the first state in India to introduce an EV policy in 2017, currently leads the country. Along with these public-private initiatives, the Karnataka government plans to open gas bunks and charging stations for electric vehicles in collaboration with Agriculture Produce Marketing Committees (APMCs).
DELHI ADDS 350 MORE E-BUSES; RANKS THIRD IN THE WORLD WITH HIGHEST E-BUSES
Delhi has added 350 electric buses to its public fleet in February 2024. With the addition of these new buses, Delhi currently has 1,650 electric buses. It now ranks number one with highest number of electric buses among all cities in India. Globally , Delhi is placed at number three among cities with highest buses.
The 350 electric buses that were introduced are already in operation. Out Of them, 300 have been inducted to the cluster bus fleet while the rest are operating as a party of the Delhi Transport Corporation fleet. The manufacturer of these electric buses is JBM. The range of these low-floor electric buses is around 250 kms on a single charge. Every e-bus has a panic button, CCTV, GPS, and other passenger safety systems installed.
March 2024
JEWAR INTERNATIONAL AIRPORT SOON TO COMMENCE OPERATION in 2024
The Jewar International Airport in Noida near Delhi would open by the end of 2024 since the runways and the essential Air Traffic Control (ATC) infrastructure have both been built.
It will relieve the heavy and increasing traffic burden at Delhi's Indira Gandhi International Airport, making it a viable alternative. It is also slated to become the biggest airport in both Asia and India. On behalf of the Uttar Pradesh government, the implementing agency is Noida International Airport Limited (NIAL)
NHAI CONCLUDES ITS LARGEST INVIT MONETIZATION, RAISES OVER RS 16,000 CRORE IN ‘ROUND 3’.
National Highways Infra Trust (NHIT) has successfully completed its fund-raising efforts through "InvIT(Infrastructure Investment Trust) Round-3" for National Highways segments of 889 km in length. This is one of the biggest deals in the history of the Indian road industry and the largest monetization ever attempted by the National Highways Authority of India (NHAI).
The Letter of Acceptance (LOA) to raise the highest ever concession value through ’InvIT Round-3’was issued in February 2024.
In the third round of monetization, NHIT has raised unit capital of around INR 7,272 crore (USD 875 Mn) from marquee domestic and international investors and debt of around INR 9,000 crore (USD 1.08 Bn) from Indian lenders, to fund the acquisition of National Highway stretches, at a base concession fee of around INR 15,625 crore (USD 1.88 Bn) , and additional concessional fees of INR 75 crore (USD 9 Mn) . The units were subscribed to by investors through a book build process at a cut-off price of Rs. 124.14 per unit, at a premium over the current NAV of Rs.122.86 per unit.
PUNE METRO: LINE 3 EXPANSION TO LONI KALBHOR ON CARDS
With the help of the Public-Private Partnership (PPP), the Pune Metropolitan Region Development Authority (PMRDA) of Maharashtra is building metro line 3 from Hinjewadi to Shivajinagar in the city. There are currently proposals to expand this line on a PPP basis from Shivajinagar to Loni Kalbhor.
The Pune Metropolitan Region Development Authority (PMRDA) appointed a consultancy to examine the economic viability of these routes. The consultancy submitted the project viability report about the extension of the route to PMRDA.
BHOPAL: MEDICAL COLLEGES TO BE OPENED ON PPP-BASED MODEL
The Government of Madhya Pradesh has plans to open Medical Colleges in Public Private Partnership (PPP) mode in those districts which do not have Medical Colleges. The local district hospital will be attached to these medical colleges. These hospitals would have to reserve 75% of the beds for the poor, and only 25% of the beds could be used for commercial activities.
The State cabinet approved the proposal to take a loan of INR 5,000 crores (USD 602 Mn) from the New Development Bank for construction of roads.
INDIA LURES EV MAKERS WITH IMPORT DUTY CUTS, PAVES WAY FOR ENTRY BY FOREIGN EV COMPANIES
India introduced a new electric vehicle policy in February 2024 that will offer incentives to international electric vehicle manufacturers, such as the US-based Tesla and the Vietnamese automaker Vinfast, to enter India's developing electric vehicle market.
In a gazetted notification, the Government announced that if manufacturers agree to invest a minimum of USD 500 Mn in India , it will permit them to import up to 8,000 EVs valued at USD 35,000 Mn or more annually at a lower import charge of 15%, down from 70%.
GOVT PLANS TO ROLL OUT E-BUSES IN ALL CITIES, SOME LONG ROUTES
The government intends to install electric buses on all Indian cities' routes, including those that are lengthy like Delhi-Shimla, Delhi-Chandigarh and Pune-Mumbai. The government have announced that the decline in battery prices will lead to travellers saving 30% on fares and help bring down the pollution.
This initiative is being taken due to the government's plan to market India as a location for the production of electric cars (EVs). Reputable international EV manufacturers are hoping to invest in the e-vehicle market thanks to this regulation.
CENTRE WORKING ON PAYMENT SECURITY MECHANISM TO BUY 150,000 E-BUSES
The national government is currently in the process of putting in place a strong payment security system in order to purchase 150,000 electric buses. The goal of this project is to speed up the shift to more environmentally friendly and sustainable urban transportation choice
In order to minimize financial risks related to such a large expenditure and to guarantee accountability and transparency in the procurement process, it is imperative that a secure payment mechanism be put in place. The government's emphasis on payment security demonstrates its dedication to encouraging electric vehicles and cutting carbon emissions in cities.
A significant step toward accomplishing the objectives of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) program and the National Electric Mobility Mission Plan (NEMMP) have been taken with the purchase of 150,000 electric buses. The government is attempting to solve environmental issues, enhance air quality, and lessen reliance on fossil fuels by increasing the number of electric buses in its fleet.
M&M, ADANI TOTAL ENERGIES JOIN TO SET UP EV CHARGING INFRA ACROSS INDIA
Mahindra & Mahindra have announced that it has partnered with an Adani Total Gas division to build infrastructure for charging electric vehicles all around the nation. In this regard, a memorandum of understanding (MoU) have been signed by the car major and Adani Total Energies E-Mobility Ltd (ATEL)
It is further stated that the MoU lays out a schedule for building a nationwide network of EV charging stations. The Mumbai-based manufacturer added that as part of the agreement, e-mobility solutions spanning discovery, availability, navigation, and transactions will be rolled out to give customers easy access to the charging network.
GULF OIL LUBRICANTS LOOKING AT BUYOUTS TO BOOST EV INFRA PLAY
Gulf Oil Lubricants is searching for additional acquisitions in the charging EV ecosystem both domestically and internationally as it looks to establish itself as a new player in the electric mobility market. This is despite the company's intention to keep concentrating on its primary lubricant business. The Hinduja Group company stated that it had paid INR 103 crore (USD 12.40 Mn) to acquire a majority stake in Tirex Transmission.
The corporation is considering making more acquisitions in the two-wheeler market's EV charging infrastructure in India. He noted that this might need changing the batteries. The company's larger goal is to increase its presence in the EV market and gain a substantial role in the EV value chain is aligned with the acquisition of Tirex, a third in the mobility arena.
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