US$ 575 billion investment opportunity in transport infra in next 5 years: Kearney

According to a report, transport infrastructure sector in India holds an investment opportunity of US$ 575 billion in the next five years. There has been advancement in transportation landscape over the last two decades, but much remains to be done to meet the increasing demand now and, in the years, ahead, as per the report by management consulting firm Kearney.

The report titled 'Harnessing the opportunities in India's transportation infrastructure' said, "Roads and Railways constitute 80 per cent of the total investment opportunity driven by investments in flagship projects such as Bharatmala Pariyojana, Dedicated Freight Corridor, High Speed Rail, etc".

Though, factors such as delays in land acquisition, clearance, constraints in funding for infrastructure projects, lack of efficient dispute resolution mechanism were identified as major challenges in realising the investment opportunity.

"Significant opportunities exist in various transportation infrastructure in India, prioritizing the most important ones is of paramount importance.

"Although there are obstacles to realizing the vast potential, these challenges can be overcome with a concerted and coherent strategy across the key stakeholders: government authorities, concessionaires and contractors, and financial institutions," said Mr Manish Mathur, Partner and Head Asia Pacific, Transportation and Infrastructure Practice for Kearney.

The report also added the key steps for overcoming the difficulties and maximizing the opportunities as the government authorities need to focus on identifying the right funding model, confirming robust cash flow management with comprehensive viability assessment, and enabling a vibrant ecosystem of concessionaires and contractors while designing their transport infrastructure development strategies.

Strategic partnership between the concessionaires and contractors will benefit in identifying the right markers for decision-making and ensure the quality and timeline of project delivery with the increase in infrastructure investments and greater participation from the private sector.

The report added about financiers, "In addition to re-evaluating the risk-reward spread in the infrastructure sector, financial institutions should collaborate with government authorities and concessionaires to develop innovative products for financing."

"With a concerted effort, today's challenges can be transformed into an opportunity that will not only boost organic growth, drive job creation, and aid a whole gamut of industries but also help fulfil one of the most basic tenets of economic and social activity: mobility to serve the common good," added Mrr Mathur.

 

Kearney is a top global management consulting firm with offices in more than 40 countries. The firm focusses on strategic and operational CEO-agenda issues facing businesses, governments, and institutions around the globe. The firm was founded in 1926 and has been ranked among the top management consulting firms globally.

In Asia, Kearney India is among the largest and fastest growing Kearney units and works across industry verticals consisting Automotive, Aerospace, Industrial Goods, Transportation, Consumer Products, Retail, Healthcare, Oil & Gas, Metals & Mining, Chemicals, Communications, Media, Technology, IT & BPO, Private Equity, among others.