2006 INFRASTRUCTURE REPORT
Rail Project May Help Jostle
Indian Infrastructure Inertia
India and China comprise half of the oft- quoted "BRIC" countries that are so crucial to so many multinational corporate development strategies (Russia and Brazil make up the other half). But to get an idea of how far behind India lags super- fast China in the development of transport infrastructure, ask a global transport executive about his personal travel experiences.
"The good news is India's domestic air carriers offer modern aircraft, efficient service and for the most part acceptable prices," says Kenneth Glenn, senior vice president for South Asia for Singapore- based global transportation company Neptune Orient Lines (NOL), citing affordable carriers like Go Air and Deccan as well as Jet Airways (his favorite), Sahara and Kingfisher. "The bad news however," he adds, "is that to actually get to the airplane you have to go through the airport. There is no polite way to say this other than India's airports are a testimony to the generally poor state of infrastructure overall."
Human transit by road is nearly as clogged as the freight variety: "A typical 10- kilometer [6.2- mile] drive home at night takes between an hour and an hour and a quarter," Glenn says of Mumbai. "Roads and supporting infrastructure is better in Delhi, Chennai and Kolkota, although exactly why is not clear."
That's one reason the Indian Prime Minister in June announced that the government would invest nearly $11 billion in urban infrastructure in the next five years. There are high hopes the situation will change because of a move toward privatization in all modes, including the recent decision to allow private operators to run airports: "The best airport in India is in Kochi which, not coincidentally, was the first to be privatized," says Glenn.
The same principle applies to other infrastructure, including freight rail, whose privatization was approved by the Indian Parliament in February 2005.
Kristian Knutsen, manager, Deloitte & Touche USA LLP's Chinese Services Group, says of India, "Private companies are now being allowed to run their own container trains, but block trains were introduced at least a decade after China. The first double- stack trains were introduced just this year in India. Then there is the whole question of how any of this increased intermodal traffic will get in or out of the country given India's far less capable container ports – 75 million TEUs [in China] vs. 4.5 million TEUs throughput [in India] last year."
Those are numbers that are intimidating to some and enticing to others. That's why NOL Group announced early in 2006 its intent to form a new freight- rail joint venture that includes substantial capital investment in both track and rolling stock.
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