Boston, MA -- (SBWIRE) -- 10/16/2013 -- As expected, the factors dampening construction activity in FY2012/13 - non-conducive monetary conditions, policy inertia and lacklustre infrastructure activity - remain pertinent and are set to grow in prominence over the near- term. Meanwhile, material improvements in the business environment for India's construction sector have not taken place and the window for reform will continue to close as parliamentary elections draw nearer. Combined with a poor macroeconomic backdrop and new historical data, this has prompted us to take a more bearish outlook for India's construction and infrastructure sectors.

Major developments in India's infrastructure industry:

- In May 2013, the Japanese government expressed interest in partially financing the US$9.8bn Mumbai- Ahmedabad high-speed railway project. The Japanese government will provide a loan of around US $1.0bn and the project will use Japanese bullet train technology for the project.
- In June 2013, a joint-venture consisting of Larsen & Toubro and Sojitz secured a INR66.99bn (US $1.15bn) contract to a 626km double-track section of the Western Corridor. The double track-line will be built from Rewari in Haryana to Iqbalgarh in Gujarat, via Rajasthan. Funding for the project will be provided by Japan International Cooperation Agency.
- In July 2013, the aviation ministry announced that it has decided to privatise 15 airports, with the first phase involving the international tendering of six airports - Chennai, Kolkata, Lucknow, Guwahati, Jaipur and Ahmedabad - under a PPP format. AAI will still have a stake in these airports.
- In August 2013, state-owned enterprise Indian Railways issued a new request for qualification (RFQ) document for the elevated rail corridor project between Churchgate and Virar in the Indian state of Maharashtra. The new document for the 60km-long project has been issued with noticeable alterations in terms and conditions. The project cost has been revised to INR215bn (US$3.43bn), while the new elevated corridor would be a standard gauge instead of a broad gauge. Six companies, including Reliance Infrastructure, Gammon, Larsen & Toubro, Infrastructure Leasing & Financial Services and GMR that have earlier submitted RFQ for the project, would be required to re-submit their bids.
- In August 2013, India's Mumbai Metropolitan Region Development Authority (MMRDA) announced that it had not received any bids from the five consortia shortlisted for the Mumbai Trans Harbour Link (MTHL) project worth INR96.3bn (US$1.5bn). The bids were required to be submitted by August 5 2013. A consortium, comprising IRB Infrastructure and Hyundai E&C, had already announced its intention to withdraw from the race on the grounds of lack of support from the state government of Maharashtra. Other bidders have also claimed that the project has been delayed unnecessarily due to complex clearance procedures, reports local sources.
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