47887 PPI data update note 18 December 2008 Investment commitments in South Asia remained at a peak level in 2007 Investment commitments to infrastructure projects with private participation in South Asia amounted to almost US$29 billion in 2007, remaining in the US$28­29 billion range for the second consecutive year, according to just-released data from the Private Participation in Infrastructure Project Database.1 With this investment level, South Asia accounted for 18% of the year's total investment commitments in developing countries. The high level of investment commitments (hereafter, investment) was driven both by new projects and by projects implemented in previous years (figure 1). The 58 new projects accounted for US$15.7 billion, while projects reaching financial closure in 1990­2006 attracted US$13.3 billion. Commitments to physical assets, remaining in the US$27­28 billion range, accounted for almost all the investment in the region in 2007 (figure 2). Payments to the government (such as spectrum or concession fees and divestiture revenues) amounted to US$0.6 billion, or less than 2% of annual investment. Figure 1 Investment commitments to infrastructure projects Figure 2 Investment commitments to infrastructure projects with with private participation in South Asia, 1992­2007 private participation in South Asia by type of investment, 1990­2007 Projects 30 2007 US$ billions* 80 2007 US$ billions* 30 70 25 25 60 20 50 20 15 40 15 30 10 20 10 5 10 5 0 0 1990 1995 2000 2005 2007 0 1990 1995 2000 2005 2007 New projects Previously implemented projects New projects Investment in physical assets Payments to the government Source: World Bank and PPIAF, PPI Project Database. * Adjusted by the 2007 US CPI. Source: World Bank and PPIAF, PPI Project Database. * Adjusted by the 2007 US CPI. India dominated private activity in the region, accounting for 50 of the 58 new projects in 2007 and almost 78% of investment. India's predominance has characterized private activity in the region since the mid-1990s (figure 3). Pakistan accounted for six new projects in the region and 15% of investment. The four other countries (Afghanistan, Bangladesh, Nepal, and Sri Lanka) accounted for the remaining investment. Greenfield projects (build, own, operate [BOO] and build, operate, transfer [BOT] contracts and merchant projects) were the most common type, accounting for 29 of the 58 projects and more than 80% of investment. Concessions (build, rehabilitate, operate, transfer [BROT]; This note was produced by Ada Karina Izaguirre, infrastructure specialist, Finance, Economics, and Urban Development Department, Sustainable Development Network, World Bank. 1 Data on infrastructure projects with private participation include primarily medium-size and large projects as reported by the media and other public sources. Small-scale projects are generally not included because of lack of public information. Additional investments in some projects may have been omitted for the same reason. Barbados, the Czech Republic, Estonia, and Trinidad and Tobago became high-income countries according to the 2007 World Bank country classification (released in July 2007) and are therefore excluded from the PPI Project Database beginning with the 2007 update. -1- rehabilitate, operate, transfer [ROT]; and rehabilitate, lease, transfer [RLT]) accounted for 26 new projects and 11% of investment. The region had just one partial divestiture, an initial public offering of Power Grid Corporation of India, and two management contracts for water sector assets. Activity by sector. Investment in 2007 was concentrated in telecommunications (43%) and energy (42%). In energy investment amounted to US$12.3 billion, a level never before seen in the region (figure 4). In telecommunications investment remained at its peak, around US$12 billion, for the third consecutive year. In transport investment fell from a US$10 billion peak in 2006 to US$4.2 billion in 2007, though this was nevertheless the second highest level in 1990­2007. Figure 3 Investment commitments to infrastructure projects with Figure 4 Investment commitments to infrastructure projects private participation in India and rest of South Asia, 1990­2007 with private participation in South Asia by sector, 1990­2007 2007 US$ billions* 30 30 2007 US$ billions* Projects 90 80 25 25 70 20 20 60 50 15 15 40 10 10 30 20 5 5 10 0 0 0 1990 1995 2000 2005 2007 1990 1995 2000 2005 2007 Rest of the region India Energy Telecoms Transport Water and sew erage New projects Source: World Bank and PPIAF, PPI Project Database. * Adjusted by the 2007 US CPI. Source: World Bank and PPIAF, PPI Project Database. * Adjusted by the 2007 US CPI. In energy there were 19 new projects, all in India and Pakistan. India closed on financing for 12 new power plants with a capacity of 8,609 megawatts (MW) and investment of US$9.7 billion. The plants are to be located in several states: Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Uttar Pradesh, and Uttarakhand. India also sold, through its local stock exchange, 13.6% of Power Grid Corporation of India, the country's electricity transmission company. And the country ensured funding for the east-west gas pipeline, which has a length of 1,440 kilometers (km) and a capacity of 120 million standard cubic meters per day. Pakistan closed on financing for five generation plants with a total installed capacity of 1,015 MW. In telecommunications previously implemented projects attracted investment of US$12.3 billion in six countries--Afghanistan, Bangladesh, India, Nepal, Pakistan, and Sri Lanka. Mobile and multiservice operators accounted for US$11.5 billion of that investment. India attracted 62% of regional investment, including investment in new projects. Two new projects were implemented in the region. Bangladesh awarded a national public switched telephone network (PSTN) license to National TeleCom (NTC) for US$1.7 million, and Sri Lanka awarded a mobile license to Indian operator Bharti Airtel for US$4 million. In transport there were 32 new projects, again all in India and Pakistan. India executed 31 new projects, all but 2 of them road projects. The 29 road projects involve more than 1,700 kilometers and US$2.8 billion in investment. Of these projects, 24 include commitments of government payments--either annuity payments to cover the expected construction and operational costs or capital grants to cover the expected gap between project costs and revenues. India's other two transport contracts were greenfield seaport projects in Chennai (a 30-year BOT contract) and Orissa (a 34-year BOT contract). Pakistan signed a 40-year concession for Gwadar Port Phase II. In water and sewerage new private activity took place only in India, where five projects involving investment of US$140 million were implemented. Three projects are for water utilities. A 25-year BOT contract for a desalination plant (Chennai Desalination) reached financial closure. And in the city of Nagpur two management contracts were signed: a five- year contract for operating a water treatment plant and a seven-year contract for managing a water utility. The other two projects are for water treatment plants. In Latur, Maharashtra, the -2- local government signed a 10-year concession for its water utility system. And in the city of Kolkata the local government signed a 30-year BOT contract for a water supply and sewerage system in Section V, Salt Lake. Potential projects. The region had at least 22 potential projects in energy and transport in 2007. In energy 9 potential projects were new power plants (the 1,600-MW coal-fired Krishnapatnam power plant and 4,000-MW Mundra Ultra Mega Power Project in India, the 300-MW Upper Karnali hydropower plant in Nepal, and 6 power plants for 1,070 MW in Pakistan), while 2 were power distribution franchises in India. In transport there were also 11 potential projects: 1 airport, 7 seaports, and 3 road projects. Canceled and distressed projects. In 2007 one project in Bangladesh was canceled and one in Pakistan became distressed, bringing the region's total number of projects canceled or distressed by 2007 to seven. These contracts represent 1.7% of all infrastructure projects with private participation in the region and 3% of investment commitments in 1990­2007. In Bangladesh, Thai Airways canceled its 10-year management contract for Shah Amanat Airport with the government because of delays in transferring airport management. In Pakistan the government requested termination of the mobile license of Pakcom, which had started operating in 1990, because of disagreements over license fee payments. Concluded projects. No infrastructure projects with private participation in the region were concluded in 2007. -3- Infrastructure projects with private participation reaching financial or contractual closure in South Asia in 2007 Note: .. = not available; n.a. means not applicable. Energy Investment commitments (US$ millions) Private Payments Capacity Contract PPI type equity to the Physical size and period Country Project name Subsector (subtype) (%) government assets type (years) Main sponsors 1 India East-West Gas Pipeline Natural gas Greenfield 100 0 125 1,440 km .. Reliance Industries Limited project (BOO) (RIL) (100%, India) 2 India Power Grid Corporation Electricity Divestiture 13.6 243 485 67,000 km n.a. Others (..%, ..) of India Limited (PGCIL) (partial) 3 India Alaknanda Hydro Electricity Greenfield 100 0 375 300 MW 45 GMR Group (100%, India) Electric Power Project project (BOT) 4 India Chuzachen Hydro Power Electricity Greenfield 74 0 112.19 99 MW 35 Gati Infrastructure (74%, Project project (BOT) India) 5 India Shrinagar Hydro Electric Electricity Greenfield 100 0 517.25 330 MW 45 GVK Group (100%, India) Project project (BOT) 6 India Teesta III Hydro Electric Electricity Greenfield 63 0 1,426.38 1,200 MW 35 Teesta Urja Limited (63%, Project project (BOT) India) 7 India Teesta VI Hydro Electric Electricity Greenfield 74 0 750 500 MW 35 Lanco Group (74%, India) Project project (BOT) 8 India Anpara C Thermal Power Electricity Greenfield 100 0 1,100 1,200 MW .. Lanco Group (100%, India) Station project (BOO) 9 India Kamalanga Thermal Electricity Greenfield 100 0 1,053 1,050 MW .. GMR Group (100%, India) Power Plant project (BOO) 10 India Khandke Wind Farm Electricity Greenfield 100 0 67 50 MW .. China Light and Power Ltd. project (BOO) (50%, Hong Kong, China), Hydro Tasmania (50%, Australia) 11 India Nigrie Thermal Project Electricity Greenfield 100 0 1,250 1,000 MW .. Jaiprakash Associates Limited project (BOO) (100%, India) 12 India Raj West Power Limited Electricity Greenfield 100 0 1,250 1,080 MW .. JSW Energy (100%, India) Phase I project (BOO) 13 India Ratnagiri Power Project Electricity Greenfield 100 0 1,125 1,200 MW .. JSW Energy (100%, India) project (BOO) 14 India Rosa Thermal Power Electricity Greenfield 100 0 675.5 600 MW .. Reliance ADA Group (100%, Project project (BOO) India) 15 Pakistan Atlas Power Project Electricity Greenfield 100 0 150 225 MW 25 Atlas Group (100%, Pakistan) project (BOO) -4- 16 Pakistan Attock General Limited Electricity Greenfield 100 0 148.6 165 MW 25 Attock Oil Company Ltd. Power Project project (BOT) (AOC) (100%, United Kingdom) 17 Pakistan Foundation Power Electricity Greenfield 100 0 200 175 MW 25 Fauji Foundation (100%, ..) Company Daharki project (BOO) 18 Pakistan Saif Power Project Electricity Greenfield 100 0 200 225 MW 25 Saif Group (100%, Pakistan) project (BOO) 19 Pakistan Sapphire Power Project Electricity Greenfield 100 0 185 225 MW 25 Xenel Industries Ltd. (..%, project (BOO) Saudi Arabia), Sapphire Group (..%, Pakistan) Telecommunications Investment commitments (US$ millions) Private Payments Capacity Contract PPI type equity to the Physical size and period Country Project name Segment (subtype) (%) government assets type (years) Main sponsors 1 Bangladesh National TeleCom Ltd. Fixed access Greenfield 100 1.7 0 17,000 15 Others (100%, ..) and long project connections distance (merchant) 2 Sri Lanka Bharti Airtel Sri Lanka Mobile Greenfield 100 4 0 .. .. Bharti Enterprises (46%, access project India), Singapore Telecom (merchant) (16%, Singapore) Transport Investment commitments (US$ millions) Private Payments Capacity Contract PPI type equity to the Physical size and period Country Project name Subsector (subtype) (%) government assets type (years) Main sponsors 1 India Aurangabad-Jalna- Roads Concession 100 0 74 66 km 20 PBA Infrastructure Ltd. (49%, Jintur Project on MSH- (BROT) India), Sadbhav Engineering 6 Ltd. (51%, India) 2 India Bhopal-Dewas Road Roads Concession 100 0 107 143 km 25 BSBK Pvt. Ltd. (..%, India), Project (BROT) MSK Projects Ltd. (..%, India), Chetak Enterprises Pvt. Ltd. (..%, India) 3 India Bongulur to Roads Greenfield 100 0 73 13 km 15 Maytas Infrastructure Pvt. Ltd. Tukkuguda Outer Ring project (BOT) (50%, India), Gayatri Projects Road Ltd. (50%, India) -5- 4 India Chandpur-Alirajpur Roads Concession 100 0 16 100 km 25 Keti Infrastructure Pvt. Ltd. Kukshi Badwani Road (ROT) (100%, India) 5 India Chennai Second Seaports Greenfield 80 0 150 8 million 30 Sical (32%, ..), PSA Corp. Container Terminal project (BOT) throughput (48%, Singapore) 6 India Delhi-Ramgarh-Alwar Roads Concession 100 0 6.32 35 km 11 Vishesh Infrastructure Pvt. (BROT) Ltd. (100%, India) 7 India Dhamra Port Project Seaports Greenfield 100 0 600 25 million 34 Tata Enterprises (50%, India), Phase I project (BOT) throughput Larsen & Toubro Limited (50%, India) 8 India Expressway from Roads Greenfield 100 0 75 12 km 15 Induni & Cie SA (..%, Narsingi to Kollur project (BOT) Switzerland), Era Group (..%, India) 9 India Expressway from Roads Greenfield 100 0 107 13 km 15 KMC Constructions Ltd. (..%, Pedda Amberpet to project (BOT) India), Infrastructure Leasing Bongulur & Financial Services (..%, India) 10 India Gwalior Bypass on Roads Greenfield 100 0 75 42 km 20 Era Group (..%, India), NH-3 and NH-75 project (BOT) Shriram Group (..%, India), Ramky Group (51%, India) 11 India Gwalior-Jhansi NH-75 Roads Concession 100 0 151 80 km 20 DS Constructions Ltd. (..%, (BROT) India), Apollo Infrastructure Projects Finance Company (..%, India) 12 India Islam Nagar-Kadtal Roads Concession 100 0 137 48 km 20 Patel Engineering Ltd. (..%, NH-7 (BROT) India), KNR Constructions Ltd. (..%, India) 13 India Jaora Nayagaon Road Roads Concession 100 49.92 135 126 km 25 VIVA Highways Private Ltd. Project (BROT) (49%, India), SREI Infrastructure Finance Ltd. (28%, India) 14 India Jhansi to Lalitpur (km Roads Concession 100 0 106 50 km 20 Gayatri Projects Ltd. (51%, 0 to km 49.79) NH-26 (BROT) India), Infrastructure Development Finance Company Ltd. (IDFC) (49%, India) 15 India Jhansi to Lalitpur (km Roads Concession 100 0 77.5 49 km 20 Infrastructure Development 49.79 to km 99) NH- (BROT) Finance Company Ltd. (IDFC) 26 (49%, India), Gayatri Projects Ltd. (51%, India) 16 India Kollur to Patancheru Roads Greenfield 100 0 125 12 km 15 Maytas Infrastructure Pvt. Ltd. Outer Ring Road project (BOT) (50%, India), Gayatri Projects Ltd. (50%, India) 17 India Lakhnadon-MP/MH Roads Concession 100 0 102 56 km 20 SREI Infrastructure Finance Border NH-7 (BROT) Ltd. (49%, India), Sadbhav Engineering Ltd. (51%, India) -6- 18 India Lebad Jaora Road Roads Concession 100 0 105 125 km 25 Essel Group (100%, India) Project (BROT) 19 India Madurai-Tuticorin Roads Concession 100 0 157 128 km 20 SREI Infrastructure Finance Section, NH-45B (BROT) Ltd. (49%, India), Madhucon Projects Ltd. (51%, India) 20 India Mandsaur-Sitamau Roads Concession 100 0 6.3 44 km 25 Suryavanshi Infrastructure Road (ROT) Pvt. Ltd. (100%, India) 21 India Matkuli-Tamia- Roads Concession 100 0 23.52 108 km 25 Keti Infrastructure Pvt. Ltd. Chhindwara Road (ROT) (100%, India) Project 22 India MH/AP Border to Roads Concession 100 0 90.1 55 km 20 Avinash (..%, India), Soma Islam Nagar NH-7 (BROT) Enterprise Ltd. (..%, India) 23 India Nelamangala- Roads Concession 100 35.51 110 20 km 20 Navayuga Group (100%, Bangalore NH-4 (BROT) India) 24 India Pondicherry- Roads Concession 100 0 71.25 39 km 30 Maytas Infrastructure Pvt. Ltd. Tindivanam NH-66 (BROT) (50%, India), Navayuga Group (50%, India) 25 India Salem to Karur (NH-7) Roads Concession 100 12 63 42 km 20 JTEC (..%, India), M Venkat (BROT) Rao (..%, India), MRK Prasad Rao (..%, India) 26 India Salem-Ulundurpet NH- Roads Concession 100 0 235.25 136 km 25 Reliance ADA Group (100%, 68 (BROT) India) 27 India Second Adityapur Toll Roads Concession 100 0 13.75 3 km 30 Infrastructure Leasing & Bridge over River (BROT) Financial Services (100%, Kharkali India) 28 India Thrissur Edapalli Roads Concession 100 21.1 78.13 40 km 20 KMC Constructions Ltd. (51%, Project on NH-47 (BROT) India), SREI Infrastructure Finance Ltd. (49%, India) 29 India Trichy-Karur on NH-67 Roads Concession 100 0 129 80 km 30 Reliance ADA Group (100%, (BROT) India) 30 India Trichy Dindigul on NH- Roads Concession 100 0 144 88 km 30 Reliance ADA Group (100%, 45 (BROT) India) 31 India Zirakpur-Parwanoo Roads Concession 100 0 73.75 29 km 20 Jaiprakash Associates Limited NH-22 (BROT) (100%, India) 32 Pakistan Gwadar Port Phase II Seaports Concession 100 0 550 500,000 40 PSA Corp. (100%, Singapore) (BROT) throughput -7- Water and sewerage Investment commitments (US$ millions) Private Payments Capacity Contract PPI type equity to the Physical size and period Country Project name Subsector (subtype) (%) government assets type (years) Main sponsors 1 India Chennai Desalination Treatment Greenfield 100 0 115 100,000 25 Abengoa (25%, Spain), IVRCL Ltd. plant project (BOT) cubic Infrastructures & Projects Ltd. meters per (75%, India) day 2 India Kolkata, Salt Lake Utility Greenfield 65 0 16.9 13,000 30 Tata Enterprises (100%, Water Supply and project (BOT) cubic India) Sewerage Project meters per day 3 India Nagpur, Pench Treatment Management 37 0 1.6 23,000 5 Veolia Environnement (37%, Treatment Plant plant contract cubic France) Rehabilitation Project meters per day 4 India Nagpur, 24x7 Water Utility Management 100 0 0 10,000 7 Veolia Environnement (100%, Supply Project contract connections France) 5 India Latur Water Supply Utility Concession 100 0 8.75 100,000 10 Hydro-Comp Enterprises Scheme (RLT) connections (34%, Cyprus), Subhash Projects & Marketing Ltd. (34%, India), UPL Environmental Engineers Ltd. (34%, India) -8-