Sei sulla pagina 1di 22
Assocham Eco Pulse Study “ Indian Metros: pulling infrastructure investments” March 2009 Prepared by: Swati

Assocham Eco Pulse Study

Indian Metros: pulling infrastructure investments”

March 2009

Prepared by:

Swati Gupta Assocham Research Bureau

AEP: Indian metros: pulling infrastructure investments, March 2009

0

The Associated Chambers of Commerce and Industry of India

Contents

Contents 1. Introduction 2 2. Economic profile of the metro cities 4 3. Infrastructure projects 8

1. Introduction

2

2. Economic profile of the metro cities

4

3. Infrastructure projects

8

JNNURM

Development Authority

Private sector projects

4. Sector wise classification

15

5. References

25

1.

Introduction

1. Introduction The cities and towns constitute second largest urban system in the world and contribute

The cities and towns constitute second largest urban system in the world and contribute over 50

per cent of the country’s GDP . India is bestowed with six prime metro cities which act as key urban growth centres for trade, commercial as well as corporate activity. These cities have witnessed mass scale migration from the neighboring cities, towns and villages.

The unprecedented growth in the economic activity and population levels in the key metropolitan cities has created serious infrastructure bottlenecks, which are now hindering the growth process.

While infrastructure is a bottleneck, it also provides a huge opportunity for generating employment and thus generating income.

Some of the significant problems faced in the Tier 1 cities are those of roadways, transport system, water supply, sewage, housing.

The Study seeks to figure out the various infrastructures related projects being undertaken by the central government, state government, local bodies and the corporate sector in the six metro cities of India viz, Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bangalore. The focus of the Study is to find out the investment being put into the Indian metros and the amount received by various infrastructure sub-sectors.

Jawaharlal Nehru National Urban Renewal Mission

2.

Economic Profile of the Metro Cities

2. Economic Profile of the Metro Cities India besides being one of the fastest growing economies

India besides being one of the fastest growing economies in the world, also has the reputation of having fastest rate of urbanization. According to the United Nations’ ‘State of the World Population 2007’ Report, by 2030, 40.76 per cent of India’s population will be living in urban areas compared to about 28.4 per cent now.

Taking the urban population residing in the cities as criteria, Mumbai appears as the most urbanized city of India accounting for 0.07 per cent of the total urban population of the country. The second most urbanized place is the capital city, Delhi accounting for 0.069 per cent of total urban population.

Kolkata is the third most urbanized metro city inhabitating 0.064 per cent of urban population. Contribution to urban population of three other metro cities of Bangalore, Chennai and Hyderabad is almost similar at 0.029 per cent.

Mumbai

The Mumbai Metropolitan region consisting of seven islands, western and eastern suburbs is situated at 603.4 square kilometer area. According to United Nations Development Programme, Mumbai is one of the most populated cities in the world with its present population estimated as 18 million. The density of population is 26,722 persons per square kilometer area. The literacy rate of Mumbai in the year 2001 was 77.45 per cent with male literacy at 82.29 per cent and female literacy rate at 71.151 per cent.

Delhi

Delhi Delhi, the capital region of the country is the only metro city to also possess

Delhi, the capital region of the country is the only metro city to also possess the status of ‘state’. Population in Delhi is estimated to be 18.7 million at present, and is forecasted by the census to reach 21 million by 2017. Delhi’s area is 1484 square kilometer. Literacy rate in Delhi amongst the highest with 82 per cent (male- 87 per cent, females – 75 per cent). The state domestic product of Delhi for the financial year 2005-06 was Rs. 84 thousand crore with growth rate of 9 per cent.

Kolkata

Kolkata city occupies the area of 1854 square kilometer with population of more than 15 million. According to Census 2001, 14.72 million people were distributed over 1851.41 square kilometer of Kolkata Metropolitan Area forming an overall density of 7950 persons per square kilometer.

During the period 1993-94 and 2001-02, the average annual growth rate in Kolkata metropolitan region was 9.04 per cent, which was far higher than 2.96 per cent in West Bengal.

Bangalore

Bangalore, the capital city of Karnataka, is located on the area of 741 square kilometers with the population of seven million. The literacy arte is over 75 per cent. With the mushrooming of major IT centres in the metro city, Bangalore is better known as ‘Silicon valley’ of India. it is one of the technological innovation hubs according to the Human Development Report (United Nations Development Programme, 2001). Bangalore has more than 20 industrial estates/areas comprising large, medium and small enterprises.

Chennai

Chennai The capital of Tamil Nadu, Chennai, is located on 176 square kilometers while for the

The capital of Tamil Nadu, Chennai, is located on 176 square kilometers while for the whole Chennai metropolitan region (also constituting municipalities, town panchayats and village panchayats), the region is 1189 square kilometers. According to census 2001, total population of the metro was 70.41 lakh, density being 105 persons per hectare. The decadal growth rate is 9.76 per cent.

Literacy rate of the city is 76 per cent. The percentage of population below poverty line in the year 1999-2000 in Chennai district was 9.58 per cent.

Chennai City alone accounts for 10.94 percent of the State income. Chennai has emerged as a major export hub for cars. Chennai and its neighboring districts account for about 20 percent of small-scale industries in Tamil Nadu. Small scale industries in metals, rubber and plastic products, metal products, electrical machinery, transport equipments, leather and fur products and non-metallic mineral products are predominant industries present.

Hyderabad

Hyderabad, the capital city of Andhra Pradesh occupies 217 square kilometer area, with population of 3.82 million, as per the Census 2001. As of a 2007 record, the total population of Hyderabad was recorded to be about 6.25 million and hence the population density of the city has been ascertained at 14,192 per square kilometer. The decadal growth rate in population as estimated in 2001 Census was as high as 17 per cent. Literacy rate in Hyderabad was 78.51 per cent.

Main industries located include Electrical fans, cooling systems, software industries, jewelers, pharmaceuticals and automotive industries. Hyderabad is emerging as one of the fastest growing IT cities of the country and is the fourth largest exporter of software products. Currently, the exports would be in excess of Rs.8000 crore.

3.

3. INFRASTRUCTURE INVESTMENTS IN INDIAN METROS As the Indian metro cities slog to make their presence

INFRASTRUCTURE INVESTMENTS IN INDIAN METROS

As the Indian metro cities slog to make their presence felt amongst the global cities of the world, rising population and heavy pace of urbanization is exerting huge pressure on their infrastructure.

The kind of investment being betted upon the infrastructure of the six metro cities by corporate sector as well as state and central government piles up to USD 28.17 billion (Rs. 1,26,000 crore)

State, local bodies and PSUs contribute 39.4 per cent while the central government investment in metro cities through the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) works out to be 23.16 per cent. The contribution in infrastructure investment is by private sector is about 37.3 per cent.

Among the six metros, Mumbai along with its suburbs has received maximum investment of Rs. 52,811 crore in the city’s infrastructure. Infrastructure investment in Mumbai accounts for 41 per cent of the total investment.

As the private sector is upbeat in investing in Bangalore, the metro city has stood at the second place with Rs. 18,615 crore investment and 14.6 per cent share. It is followed by Delhi which is seeing witnessing massive infrastructure investments due to commonwealth games and metro rail, grossing to Rs. 17887 crore.

Hyderabad urban conglomeration has overtaken Chennai and Kolkata as venue for infrastructure development. Investments amounting to Rs. 16,057 crore are in pipeline towards the development of Hyderabad. The percentage share of the total infrastructure gross investment is 12.66 per cent.

Investment in the infrastructure projects in the metropolitan region of Chennai amounts to Rs. 14,138

Investment in the infrastructure projects in the metropolitan region of Chennai amounts to Rs. 14,138 crore, with the share of 11.15 per cent in gross amount.

Jawaharlal Nehru National Urban Renewal Mission (JNNURM)

The Jawaharlal Nehru National Urban Renewal Mission was launched in the year 2005-06 by the central government with the objective of fast tracking the integrated development of infrastructure services in the cities covered under the Mission.

The main focus of the JNNURM is on infrastructure projects relating to water supply and sanitation, sewerage, solid waste management, road network, urban transport and redevelopment of old city areas.

The percentage allocation of the JNNURM funds among the various kinds of infrastructure projects is given as below –

Table 1: share of infrastructure projects under JNNURM

Projects

Share

(in

per cent)

Sewerage

63.66

Water Supply

19.60

Drainage/Storm

Water

7.47

Drains

Roads/Flyover/RoB

4.82

Solid Waste Management

1.82

Other Urban Transport

1.47

Urban Renewal

1.13

Among the six metro cities studies, the maximum amount under the JNNURM programme is being

Among the six metro cities studies, the maximum amount under the JNNURM programme is being allocated to Mumbai. Mumbai accounts for 56 per cent of total JNNURM fund allocation to the six metro cities for the ongoing projects. The various projects going on in Mumbai under the JNNURM scheme amounts to Rs. 19613 crore.

Bangalore (Rs. 9730.5 crore), Chennai (Rs. 2411.7 crore), Hyderabad (Rs. 257.87 crore) and Kolkata (Rs. 2104 crore) were the next highest recipient of the central government investment through the Urban Renewal Programme. Minimum amount allocation under JNNURM is for Delhi (Rs. 499.2 crore).

Table 2:Metro’s Share in JNNURM funds

Metro City

Share (in

per cent)

Mumbai

66.77

Bangalore

8.47

Delhi

1.70

Hyderabad

7.69

Chennai

8.21

Kolkata

7.16

State government, local development Bodies and PSUs The Study has also taken into account the

State government, local development Bodies and PSUs

The Study has also taken into account the investment being put into the metro city’s infrastructure projects by their respective state governments, local development authorities and public sector units.

Interestingly, it was found that overall these institutions account for the maximum share of the gross investment in the infrastructure projects in Indian metros. However, the phenomenon is more dominating in Mumbai and Delhi. About 53 per cent of the infrastructure investment in Mumbai is funded through state government and Mumbai Metropolitan Development Authority. In Delhi, the percentage is even higher at 74 per cent.

The two major projects in Mumbai are Mumbai Metro Rail Project (Rs. 19,525 crore), Mumbai Urban Transport Project (Rs. 4526 crore) and Extended Mumbai Urban infrastructure Project (Rs. 1550 crore).

In Delhi, maximum amount is being spent on Delhi Metro Phase II expansion and improvement of stadiums, hotels and residential villages for ‘Commonwealth Games 2010’. The estimated project cost in metro rail expansion is Rs. 8118 crore while the Commonwealth games budget is around Rs. 5165 crore.

In Bangalore, the funding through state and local government accounts for 34 per cent and in Chennai the ratio is 14.82 per cent. Similar to Mumbai and Delhi, metro rail project in Bangalore accounts for the major investment being channelised for city’s infrastructure.

However, in Hyderabad and Kolkata, no major projects were found to be undertaken for infrastructure improvement of the cities by their respective state or local governments.

Private Sector Investments

Private Sector Investments The private sector investments contributes second highest share to the infrastructure kitty of

The private sector investments contributes second highest share to the infrastructure kitty of the metro cities. The maximum share of total private investments was occupied by the fast growing metropolitan area of Hyderabad where the business community has betted in 29.11 per cent of their total metro fund pool, grossing to Rs. 13,800 crore.

The other two southern cities Bangalore and Chennai are high on corporate radar as they managed to get hold of second and third largest investment flows towards shaping the cities’ infrastructure. In Bangalore, the private sector investments amount to Rs. 9730.5 crore while in Chennai, it is Rs. 9630.5 crore with their respective shares working out to be 20.52 per cent and 20.31 per cent.

Kolkata, Mumbai and Delhi account for relatively lower private sector investments in infrastructure projects. In Kolkata, investment worth Rs. 5185 is in pipeline for improving upon the city’s infrastructure while in Mumbai R. 4950 crore are invested by the business community. In Delhi, the share is lowest as R. 4105 crore are planned to be invested.

Major flows of private investments under the infrastructure sphere has been towards real estate (Rs. 14,690 crore), hospitality (Rs.13,010 crore) and SEZs (Rs. 10,500 crore).

Major Private Sector Investors

Among the various business houses putting their money on metros’ infrastructure, Tata Group has led the pack with its contribution to total corporate kitty being 19.4 per cent. There are two major projects of the Tata Group, viz, an Special Economic Zone for aerospace and defense products manufacturing facility in Hyderabad with the investment of Rs. 9000 crore and the other one is a residential project in Bangalore for Rs. 210 crore investment.

The ITC Group which is the second highest investor in Tier I cities , plans

The ITC Group which is the second highest investor in Tier I cities , plans to invest Rs. 4860 crore in two hospitality projects, each in the city Chennai (Rs. 4000 crore) and Kolkata (Rs. 860 crore).

JAL Hotels have planned to invest R. 4500 crore in four metro cities including Bangalore, Delhi, Kolkata and Mumbai.

The table below illustrates top ten private sector investors in infrastructure projects of metro cities.

Table3: TOP PRIVATE SECTOR INVESTORS

NAME

OF

THE

TOTAL

SHARE

COMPANY

(IN

RS.

(IN

PER

 

CRORE)

CENT)

Tata Group

 

9210

19.42

ITC

4860

10.25

JAL Hotel

4500

9.49

Ozone Group

 

4500

9.49

Golden Gate

 

2500

5.27

Properties

RNA Corporation

 

2000

4.21

Puravankara Projects

1900

4.00

Chintels India

 

1800

3.79

Mahindra Group

 

1800

3.79

Andromeda

 

1200

2.53

Technologies

4.

SECTOR-WISE CLASSIFICATION

4. SECTOR-WISE CLASSIFICATION The AEP Study analysed broad sectors within the infrastructure domain in which investments

The AEP Study analysed broad sectors within the infrastructure domain in which investments

are made through government and corporate route.

IIII. Metro rail

Construction of metro rail in three metro cities including Bangalore (Rs. 6395 crore), Delhi

(Rs.8118 crore) and Mumbai (R.19525 crore)

The Mumbai Metro Rail Project meant to improve the mass transit system has the horizon of

2006-2011 with the estimated cost of Rs.19, 525 crore. It is a 146 kilometer-long rail network, of

which 32 kilometer would be underground and 111 kilometer would be elevated.

The work under Delhi Metro project is underway for the second phase and is expected to be

complete by the year 2010. The investment in Delhi metro is to the tune of rs.8118 crore for the

second phase.

Bangalore metro rail project was approved in April 2006, the first phase of the project is

expected to be completed by December 2011. The project cost is estimated at Rs. 6395 crore

which was to be financed by way of equity, subordinate debt and senior term debt.

II.II.II.II. Sewerage

Sewerage and solid waste management investment in the Tier I cities constitute the major chunk

of investments, specifically via government mode. Total amount of Rs.21,434 crore is invested in

the sewage systems of the six metros, constituting 17 per cent of the total amount. Mumbai (Rs.

16694.672 crore), Chennai (Rs. 1588 crore) and Bangalore (Rs. 1354.92 crore) are the major

recipients of sewerage related investment. AEP: Indian metros: pulling infrastructure investments, March 2009

12

III.III.III.III. Real Estate Development

I I . I I I . I I I . Real Estate Development The Indian

The Indian metros continue to be the favorite destination for real estate development. The real estate projects constituting residential as well as commercial projects, have pocketed investment worth Rs. 15,710.5 crore.

The southern twin cities of Bangalore and Hyderabad have enjoyed maximum attention of the real estate developers. The Karnataka capital, Bangalore is the frontrunner in terms of real estate projects planned for the metros with the investment estimated to be Rs. 7990 crore. Hyderabad at second place among all the cities, has bagged projects worth rs. 4050 in realty space.

Chennai, Kolkata and Mumbai have received the real estate investments to the tune of Rs. 1430.5 crore, Rs. 1000 crore and Rs. 700 crore, respectively.

IV.IV.IV.IV. Hospitality

With India being placed as versatile tourist destination across the world and steep rise in tourists arrival in India in past few years, hospitality has been considered as a crucial part of a well-developed infrastructure for the metro cities. Hence, Hospitality investments have acquired fourth rank among all sectors with 10.26 per cent share for Rs. 13010 crore investment.

Chennai has come into front run in terms of funds directed towards construction and renovation of hotels. Investment of Rs. 4000 crore is being planned to infuse in constructing a five star hotel by ITC Industries in Chennai.

The next city in radar is Mumbai with Rs.3125 investments planed by RNA Corporation (Rs. 2000 crore) and JAL Hotels (Rs. 1125 crore).

The other considerable investments in hospitality sector were directed in Kolkata (Rs. 2985 crore) and Bangalore (Rs. 1125 crore).

V.V.V.V.

Special Economic Zones

V . V . V . V . Special Economic Zones A Special economic Zone is

A Special economic Zone is a special duty free enclave to propel the economic growth supported by quality infrastructure and attractive fiscal package by centre and state governments, with minimum possible regulations.

Although the approval for the new SEZs have been freezed due to land acquisition disputes, private sector companies have announced investments worth Rs. 10,500 crore towards construction of SEZs in the metro cities, contributing 8.28 per cent to the infrastructure pool.

The largest SEZ investment is planned by the Tata Group in Hyderabad for Rs. 9000 crore. The second largest investment announcement was in Mumbai by Reliance Communication for Rs. 1000 crore.

VI.VI.VI.VI.

Transportation

Urban transportation is in grave need for capacity expansion and modernization, in reference to every metro city in India. Investments in transportation (excluding the metro rail projects) has been to the tune of Rs. 6283.60 crore with the share of 4.96 per cent.

Maximum investment in transport development is being pledged in Mumbai with the amount grossing to Rs. 4674.25 crore. The major part of this amount is invested in the Mumbai Urban Transport Project with the investment of Rs. 4526 crore which is planned to be completed by

2011.

The Mumbai Metropolitan Region Development Authority (MMRDA) has formulated Mumbai Urban Transport Project (MUTP) as a multi modal project to bring about improvement in traffic and transportation situation in the Mumbai Metropolitan Region with the World Bank assistance. MUTP envisages investment in suburban railway projects, local bus transport, new roads, bridges, pedestrian subways and traffic management activities.

Transportation development projects in other metropolitan cities include Bangalore (Rs. 247.2 crore), Kolkata (Rs. 1200

Transportation development projects in other metropolitan cities include Bangalore (Rs. 247.2 crore), Kolkata (Rs. 1200 crore) and Hyderabad (Rs. 162.13 crore).

VIVII.VIVII.I.I. Roadways

Roadways have become a major bone of contention in urban development in India. Most of the metro cities suffer from capacity overload or insufficient road network in the cities. Amount of Rs. 5819.83 crore is being planned to be invested towards roadways development in the Tier 1 cities.

Mumbai has again topped the list in terms of infrastructure development projects specifically aimed at Roadways in the region. The funds being spent for road development in the city amounts to Rs. 4688.52 crore.

Two major projects under which the investment is taking place in road sector are Mumbai Urban Infrastructure Plan (Rs. 2647 crore) and Extended Mumbai Urban Infrastructure Project (Rs. 1550 crore).

The roads constructed under the Mumbai Urban Infrastructure Plan include as Eastern Express Highway, Western Express Highway,S.V.Road,LBS Road,Andheri Ghatkopar Link Road, Main Linking Road, Sion Dharavi link Road, Ghatkopar Mulund Link Road (Part) and other important roads around MIDC,SEEPZ and International Airport.

In other metro cities, the amount being invested by the government in road development includes Bangalore (388.53 crore), Kolkata (Rs. 393.73 crore), Chennai (287.76 crore) and Hyderabad (Rs. 61.28 crore).

VIII.VIII.VIII.VIII. Water Supply

VIII.VIII.VIII.VIII. Water Supply Water Supply projects are being taken up in the JNNURM scheme of the

Water Supply projects are being taken up in the JNNURM scheme of the central government with the objectivbe of ensuring uninterrupted water supply in the metro cities of India. The total amount being invested under different ongoing projects under Jawaharlal Nehru urban Renewal Mission is worth Rs. 5757 crore. The allocation among the cities is given in the Table below.

Table 4: Water Supply Projects under JNNURM

City

Water Supply

Mumbai

2404.0909

Hyderabad

1088.11

Kolkata

1026.2128

Chennai

740.5939

Bangalore

498.9

Grand Total

5757.9076

Sectoral SUMMARY

Sectoral SUMMARY Table5: Investments in Infrastructure Sector Sector Amount Share (in Rs. (in Crore)

Table5: Investments in Infrastructure Sector

Sector

Amount

Share

(in Rs.

(in

Crore)

per

cent)

Metro Rail

34038

26.84

Sewerage

21434.449

16.90

Real estates

15170.5

11.96

Hospitality

13010

10.26

SEZ

10500

8.28

Transport

6283.6084

4.96

Roadways

5819.8358

4.59

Water Supply

5757.9076

4.54

Bangalore

Table 6: Top Infrastructure Sector investment in Bangalore

Sector

Amount (in

Rs. Crore)

Real estates

7990

Metro Rail

6395

Sewerage

1354.9279

Hospitality

1125

Water Supply

498.9

SEZ

400

Roadways

388.5363

Transport

247.2284

Chennai

Chennai Table 7: Top Infrastructure Sector investment in Chennai Sector Amount (in Rs. Crore) Hospitality 4000

Table 7: Top Infrastructure Sector investment in Chennai

Sector

Amount (in Rs. Crore)

Hospitality

4000

Sewerage

1588.3528

Real estates

1430.5

Water Supply

740.5939

roadways

287.766

SEZ

100

Delhi

Table 8: Top Infrastructure Sector investment in Delhi

Sector

Amount (in Rs. Crore)

Metro Rail

8118

Commonwealth Games

5165

Hospitality

1525

Sewerage

245.44

Hyderabad

Hyderabad Table 9: Top Infrastructure Sector investment in Hyderabad Sector Amount (in Rs. Crore) SEZ

Table 9: Top Infrastructure Sector investment in Hyderabad

Sector

Amount

(in Rs.

Crore)

SEZ

9000

Real estates

4050

Water Supply

1088.11

Sewerage

866.99

Hospitality

250

Transport

162.13

Roadways

61.28

Kolkata

Kolkata Table 10: Top Infrastructure Sector investment in Kolkata Sector Amount (in Rs. Crore)

Table 10: Top Infrastructure Sector investment in Kolkata

Sector

Amount

(in

Rs.

Crore)

Hospitality

2985

Transport

1200

Water

1026.2128

Supply

Real

1000

estates

Sewerage

684.0671

Roadways

393.7321

Mumbai

Table 11: Top Infrastructure Sector investment in Mumbai

Sector

Amount (in Rs. Crore)

Metro Rail

19525

Sewerage

16694.67

Roadways

4688.52

Transport

4674.25

Hospitality

3125

Water Supply

2404.09

SEZ

1000

Real Estates

700

References

References 1. JNNURM, Overview 2. Bangalore Metro Rail Corporation 3. Mumbai Metropolitan Region Development Authority 4.

1. JNNURM, Overview

2. Bangalore Metro Rail Corporation

3. Mumbai Metropolitan Region Development Authority

4. Delhi Development Authority

5. Kolkata Metropolitan Development Authority

6. Bangalore Development Authority

7. Chennai Metropolitan Development Authority

8. Transforming Mumbai into a World-Class City, First report of the Chief Minister’s Task Force, February 2004

9. Delhi Urban Environment and infrastructure Improvement Project, Delhi

2021

10. City Development Plan, Hyderabad, Great Hyderabad Municipal Corporation

11. City Development Plan for Kolkata Metropolitan Area, Kolkata Metropolitan Development Authority