There was a little pick-up in new project announcements in the week ended May 7.
35 new projects were announced. Of these, cost was available for 17 projects and
these added up to Rs.170 billion. The average weekly new investment
announcements was a little short of Rs.50 billion during April. In comparison,
the first week of May has seen a much higher announcement of new investments.
Most new projects announced are by government agencies. And, they emanate almost
entirely from a government-linked exhibition. This is the India Integrated
Transport & Logistics Summit, 2017. As a result, most of the new projects
announced during this week were related to infrastructure. In particular, these
were logistics parks.
A government press release states that 34 MoUs were signed during the three-day
Summit. These apparently envisaged investments worth Rs.2 trillion. However,
neither the press release nor the Summit’s website details the specific
projects. The press release does describe them in general terms, though:
“These MoUs were in the areas of port connectivity, Integrated Check Posts
(ICP) in the states of Bihar, Uttarakhand, Uttar Pradesh, West Bengal, Manipur,
access to land port in Tripura, Assam and Mizoram, development of Logistics
Parks in Telengana, Andhra Pradesh, Karnataka, Madhya Pradesh, Assam, Gujarat,
Mizoram, development and furthering of multi modal logistics parks in Mumbai and
Bengaluru and Haryana, exploring investment opportunities in logistics sector,
dredging of inland waterways, implementation of 79 port connectivity projects
under Sagarmala, development of port roads to Chennai and Vishakhapatnam ports,
and connectivity to airport in Navi Mumbai, among others.”
We could identify the announcement of 13 logistics parks projects and one
integrated check post project on May 5. Of these, 8 were announced by NHAI.
These involved investments worth Rs.124 billion. Container Corpn of India
announced a logistics park worth Rs.22 billion, Land Ports Authority of India
announced one for Rs.15 billion and Achievers Infra Solutions Pvt Ltd announced
one worth Rs.5 billion. There are two projects by Adani Logistics but, their
costs was not known.
These 13 projects account for 97 per cent of all the new investment proposals
made during the week of May 7.
It is likely that some of the MoUs signed will fructify into specific investment
projects in due course of time. And these in turn could spawn more projects. One
of the objectives of the Summit was to bring down the cost of transportation
through efficiency gains in planning multimodal transport systems.
The government of Haryana announced several projects in the road transport
sector. These include a flyover, three underpasses and a bypass. No costs were
available for these. The government of Himachal Pradesh announced a multi-storey
parking complex and a college and the government of Uttarakhand announced a
hospitality university. No costs were available for these either.
The government of Gujarat announced two hospital projects in Rajkot - one is a
super speciality hospital with an investment of Rs.1.5 billion and the other is
a hospital with an investment of Rs.0.6 billion.
While all the government projects listed above are in infrastructure sectors
which require government investments, two projects announced by the government
of Madhya Pradesh seems a bit odd. Madhya Pradesh State Tourism Devp Corpn has
announced two 5-Star Hotel projects, both in Bhopal.
Arguably, running hotels is best left to the private sector and even
a state tourism department should refrain from spending its resources in this
It is apparent from the above listing that while the value of new investment
projects during the week has increased, these do not reflect any turnaround in
the investment sentiment, which continue to remain very weak. Firstly, the spike
in new investment is the result of a government-sponsored exhibition which often
promises a lot more than what is translated into real investment projects.
Spurious promises to invest large amounts abound during these
government-sponsored events. Second, there is still very little participation by
the private sector.
Several recent surveys conducted by international agencies have shown that
Indian companies are optimistic about the future. However, this enthusiasm seen
in the survey results is not reflected in new investments being proposed by