Whats Happening at AIIM
Guest Lecture by Mr. Vivek Gilani
Guest Lecture by Mr Mukesh Parikh
Book Expo -2017 Book Showcase
Study Visit for PGDM Students to ONGC Kalol
Vibrant Gujarat 2017: January 10-13, 2017
6th EPC World Awards
Logistics Asia Conference
A talk by Mr. Jay Vasavada
Smart Infrastructure Industry Confluence
Confederation of Indian Industry
Prof. Bala V. Balachandran
Mr. Bala K. Subramaniam
Role & Challenges of TPO in Institute Building
Strategic thinking in Infrastructure Sector
Knowledge Partnership with CII
Opening Doors for 3rd Batch of Nation Builders
If we have to become developed country, infrastructure is the backbone. Infrastructure development has been the main pillar of global economic development over the last several decades. In advanced countries, the focus has been on up gradation of infrastructure facilities and service quality improvement; while in the developing countries, the thrust has been on creation of basic infrastructure facilities in new or less developed areas and expansion of the existing network of infrastructure in urban areas.
From the time of Jules Dupuit’s famous article on toll bridge (1849), wherein he introduced the concept of price discrimination, to the 20th century establishment of advance theory across management disciplines including Jean Tirole’s analysis of market power and the regulation of monopolies, an interdisciplinary understanding has been at the forefront of infrastructure management. We are now challenged as the infrastructure needs of India switch from an acute- shortage scenario to that of an acute-mismanagement scenario. Managing assets efficiently and productively has become as important as asset creation. Along with the change in infrastructure landscape, we are facing a leadership shortage because managing it through the age old practitioner’s art is no longer possible. The work of practitioners from diverse backgrounds has facilitated the growth of infrastructure management as a substantive field. However, as a field of practice, it demands specialization to meet with the dynamic challenges posed by variety of infrastructure and the contexts in which they occur. Instead, Infrastructure Management is emerging globally as a full- fledged academic discipline.
Infrastructure sector in India has been witnessing significant changes in the legal, policy and regulatory mechanism since 1991. Given the consensus that infrastructure is a key constraint for economic growth, one would expect infrastructure policy to continue to receive a lot of attention. Getting to the Planning Commission’s target means infrastructure investment will need to increase by nearly 1 per cent of GDP each year in the 12th Five Year Plan period amounting to an investment of about $1 trillion. About 50% of the total requirements have to come from private investment. Meeting this target financially or otherwise is a huge challenge. Infrastructure Management is emerging globally as a full- fledged academic discipline. Unfortunately, capacity building on managing infrastructure business is drastically lacking and efforts to create necessary facilities to offer training on this subject are, more often, ad-hoc in nature.
To respond to these changes and challenges, it is essential that our institutions of higher education prepare globally competent leaders, that is, leaders possessing a combination of critical thinking skills, technical expertise, and global awareness yet very much grounded in local realities i.e. localized. Confronted with an India that is strikingly different from what it was just a decade ago, and also with an increasingly globalized world, higher education faces rapidly shifting socio-economic and political realities and challenges. The future of “infrastructure” rests solidly with the strength of educations institutes such as AIIM – we are ready for this challenge.
Global Infrastructure Outlook
Infrastructure development has been the main pillar of global economic development over the last several decades. In advanced countries, the focus has been on upgradation of infrastructure facilities and service quality improvement; while in the developing countries, the thrust has been on creation of basic infrastructure facilities in new or less developed areas and expansion of the existing network of infrastructure in urban areas.
According to the World Bank estimates, the total global infrastructure spending will be around US$ 2 trillion annually over the next decade. Currently, about 40% of global infrastructure investments are in the Energy Sector, while another 36% is spent on Roads & bridges. Other infrastructure sectors including rail, airports, telecom, etc. account for the remaining 24% of total global investment on infrastructure & allied sectors
Indian Infrastructure Outlook
Infrastructure Sector in India has a bright future in terms of both medium as well as long term growth prospects. It has estimated that India needs aggregate investment of more $1 trillion over the12th Plan period. Such large investments are required in order to upgrade & expand the infrastructure for sustaining the targeted average GDP growth rate of 8% per annum. According to the Planning Commission, the recent credit squeeze resulting from global downturn will not affect the pace of investment in the infrastructure sector in India. The Government of India is already considering a major public spending plan, especially in the infrastructure sector, to ensure that the 12th Five Year plan’s investment targets in the infrastructure are achieved notwithstanding the global recessionary trends. There is also a & growing consensus that improvements in infrastructure can have strong impact on poverty alleviation and can also reduce supply side constraints on primary commodities through proper mobilization of resources.
Energy & Power
Development of energy sector is crucial for India’s long term economic development. Energy sector comprises of conventional fuel technology, energy transformation and transmission, renewable and alternative energies, energy sector has a direct impact on economics and environmental concerns of India.
Indian power sector has grown significantly in size and capacity since independence with the installed capacity of power generation having increased by around 80 times, electricity generation by nearly 140 times and the total length of transmission lines by over 135 times. Generation capacity, which was only 1,362 MW at the time of independence, has increased to over 145,588 MW.
The Indian Oil and Gas sector is one of the six core industries in India and has very significant forward linkages with the entire economy. The oil & gas sector meets more than two third of the total primary energy needs in the country.
With the development of industrial hubs and metro cities an acute need for quality transportation facility has arisen. Through various financial plans and public policies, India has shown its commitment towards long term transport infrastructure development.
India, which has the 2nd largest road network in the world, with an aggregate 3.3 MnKms of road linkage, accounts for around 86% of passenger traffic and 61% of freight, making it the main artery for commuting across the country.
The Indian Railways (IR) has the IInd largest railway network in the world, running over 63,332 route Kms. Although development of Rail Infrastructure is an integral operation of Indian Government, in recent years the government has opened up the railways sector for private participation for operating container trains across ports in India. Also, establishment of rail linked inland container depots (“ICDs”) across India for international as well as domestic trade has been initiated.
The importance of the seaports for the international trade can be gauged by the fact that out of the total foreign trade of India, nearly 90% of the trade is handled via sea ports. Indian ports face an existing capacity short fall of 150 MMT..
Given the growing international trade and the existing shortfall in port capacity, the outlook for the service oriented ports looks highly promising, over the next decade.
SEZ and Real Estate
Special Economic Zone Currently, there are 416 SEZs which have been formally approved, out of which 330 SEZs have been notified. Out of 330 notified SEZs, only 202 SEZs were operational as on March 31, 2015. Nearly 3,900 companies have set up their operations in these operational SEZs by making cumulative investment of Rs 2, 88,477 crore.The SEZs have created direct employment for nearly 12, 39,845 persons. It is estimated that nearly double the number of indirect employment is generated outside SEZs by the Domestic Tariff Area (DTA) units which are doing business with SEZ Units.
The Indian real estate market is expected to touch US$ 180 billion by 2020. The housing sector alone contributes 5-6 per cent to the country’s Gross Domestic Product (GDP). Real estate has emerged as the second most active sector, raising US$ 1.2 billion from private equity (PE) investors in the last 10 months. Foreign investors have bought tenanted office space worth over US$ 2 billion in India in 2014, a four-fold rise compared to the previous year, in order to increase their rent-yielding commercial assets in Asia’s third largest economy.
It is evident that such rapid and sustained growth of these sectors will generate fairly attractive career opportunities for professionals with specialized knowledge and managerial expertise in these fields. The activities of Adani Institute of Infrastructure Management will focus on these areas during the initial stages of its operation.