Build, operate, grow
There are houses, offices and malls powering India’s growth story, but they cannot be islands. Around them are roads and power plants, pipelines and bridges, subways and parks, water ducts and sewage systems. Goods connected to a globalised economy arrive at ports and are transported by highways or by flights that link airports.
According to government estimates, India’s infrastructure requires a $282-370-billion overhaul to maintain the country’s gross domestic product growth rate at 8.5 per cent. The last two Five-Year Plans had allocated $82 billion and $152 billion, respectively, for infrastructure.
“There is simply a dearth of qualified and experienced people in the sector,” says Vineet Kashyap, managing director of BL Kashyap & Sons, a builder of urban infrastructure. “The issue is not about the order-book position, or at what rate they can grow, but how to manage the growth and how to implement projects,” he adds.
As India grows, the urbanisation infrastructure would be the key, as many more people would move into either metro or new emerging cities. “About 140 million people will move to cities by 2020 and a massive 700 million by 2050, leading to rapid growth in existing cities, and new towns will emerge,” says Tushar Poddar of Goldman Sachs.
Kashyap says there was a reversal of a trend a decade ago, when IT was hot. “The situation has now changed because of a sharp demand for skilled manpower particularly in civil, mechanical and other streams. Annual emoluments have witnessed an increase of more than 40 per cent in the last two years and expected to see huge growth in the near future,” says Kashyap.
The success of the Golden Quadrilateral highway programme has proven that modernisation of roads is critical for the India’s growth story. India has one of the world’s largest road networks, aggregating to 3.34 million km. Of this, national highways account for only 2 per cent of the total length but 40 per cent of the total traffic. As traffic grows and highways criss-cross and widen, more growth would happen along this route.
Another sector that has a pivotal role in India’s growth story is power. The government’s target of adding 78,500 megawatts of power generating capacity over the next five years (2007-12) may appear overly ambitious, but that only underlines a desperate need.
Construction projects will need staff by the lakhs not only in India, but overseas as well. Players like Larsen & Toubro, Punj Lloyd, Gammon India and others are emerging as global players in the construction sector.
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