The impact of PM Gati Shakti scheme on AEC industry

Last Updated on November 23, 2023 by softtech

Hon’ble PM launched the Gati Shakti scheme to create a digital platform for integrated planning and project execution. The PM Gati Shakti national master plan for multi-modal connectivity brings about a holistic approach to development in the infrastructure of the AEC industry. The scheme would offer better railway, roadway, highway and telecom connectivity. Experts at soft tech studied key areas impacted by PM Gati Shakti scheme.

Roadways and highways

The Gati Shakti scheme establishes public partnerships across the country in the road and highway sector. The plan of building a 200,000 km double national highway and Bharatmala Pariyojana for the development of a 66,100 km road network, expressways, national ad international border roads, operational roads would help to generate funding for sustainable construction practices.

Air connectivity

The construction of 100 new airports and the up-gradation of 400 existing airports would aid to meet the country’s goal of becoming the largest aviation market by 2027.

Railway networks

The introduction of seven high-speed railways would boost the connectivity between Mumbai and Ahmedabad. To minimise movement time and monitor freight traffic six dedicated freight corridors would be constructed.

Renewable energy

The scheme targets the production of 450GW energy from renewable energy sources. The current production capacity of 101 Gw would be upgraded to meet the goal.

National infrastructure pipeline

Under the Gati Shakti scheme, US$1.4 trillion would be invested in the NIP project to attract investment from the private sector. The investment would increase the NIP profit margin to US$300 billion. The country has been undertaking rationalised risks in the past few years to attract investment from private capital. Proposal for construction of PPP framework, development of model concession agreements has been revised. The proposal would aid to bridge the funding gaps.

Investment ventures

To attract the likes of primary institutional investors like pension funds, sovereign wealth funds and private equity the government has emphasized operational infrastructure assets. To recycle revenue projects such as toll operation transfer under the national highways authority of India has been revised. The bidding by domestic and international investors in the projects has increased the asset classes of the country.

To create a secondary market for infrastructure assets and fill up the shortage of equity the national infrastructure and investment fund has been set up by the government. The fund invites investment from global investments like Australian super, ADIA and Temasek. The launch of infrastructure investment trust offers further impetus for global funding. The establishment of a national monetization pipeline recycles operational revenue and also encourages the participation of available monetary resources. The central government encouraged the participation of states with road, railway, power, telecom, warehousing resources of up to 30% capacity in the pipeline scheme. Additionally to increase the need for debt funding the government launched a national bank for financing infrastructure and development as the main financial institution for infrastructure financing.

The proposals and project launch under the PM Gati Shakti will strengthen the foundation of the infrastructure. The scheme would speed up the progress of the development of the AEC industry. The contribution by investors in the projects would improve the financial capital of the scheme and manifold its development prospects. The need of the hour is domestic and international resources contributing to the scheme to reap its benefits.