Mega infra projects: Rebooting the economy.

Infrastructure development is undoubtedly the most critical element in the growth story of any economy and the recent Covid-19 pandemic has only reinforced the importance of having a strong infrastructure setup to give a boost to the health of the global economy.

Gross Domestic Product (GDP), which is one of the most common economic-indicator used to track the health of any nation, is expected to shrink by almost one per cent in 2021 as per the estimates by the United Nations Department of Economic and Social Affairs, mainly due to the Covid-19 pandemic. Therefore, a renewed focus on infrastructure would be crucial. Construction Times takes a look at the infrastructure readiness of developed and emerging countries and the way forward.

Over the last more than a decade, developed as well as emerging nations have realised the importance of having an efficient and sustainable infrastructure in place as big infrastructure projects can be economically transformative. Many countries have already put large multi-year mega infrastructure projects into motion, much before the outbreak of the pandemic. Countries including China, India, and the United States, among others, have already announced its large investment plans to strengthen their transport infrastructure.

China

China, which is aiming to become the super power in the world, has embarked on large infrastructure spends, with nearly USD 101.6 billion been envisioned for three mega projects which will not only improve domestic connectivity but also international travel. These projects include a 50 km long Hong Kong-Zhuhai-Macau Bridge which will link three major cities in the country, the Beijing Daxing International Airport and the south to north water transfer project.

United States

The United States, which continues to enjoy the leadership position, is also making huge investments in improving transport infrastructure, even as the pace of its spends is lower especially after the global financial crisis. A whopping investment of USD 70 billion has been planned to develop a high speed rail line between Los Angeles and San Francisco. The project is expected to be completed by 2030.

India

With an aim to become a USD 5 trillion economy by 2025, India has also undertaken massive infrastructure projects envisioning an investment of over USD 1.4 trillion between 2019 and 2023. Some of the critical projects envisioned by India include the USD 75 billion Bharatmala Pariyojana project making it the single largest outlay for a government road construction scheme, the Namami Gange Programme, which has a budget outlay of Rs 20000 crore and the Rs 8.5 lakh crore Sagarmala Programme that envisages unlocking the potential of waterways and the coastline to enhance the country's logistics sectors.

India has also strategically opened its gates for foreign investments to undertake large infrastructure projects by tying up with World Bank, Asian Development Bank and Japan International Cooperation Agency (JICA), among others for cheaper loans to fund the development.

To strengthen the infrastructure in Mumbai, the financial capital of the country, large transport projects have been undertaken in collaboration with these funds.

Some of the key Mumbai projects are

• Mumbai-Ahmedabad High Speed Corridor (USD 15 billion)
• Mumbai Coastal Road project (USD 1.7 billion)
• Mumbai Trans Harbour Link project (USD 2 billion)
• Mumbai Metro network of 276 km with12 metro corridors (Rs 88000 crore)

To give a boost to the infrastructure and trade sectors in the country, the government has proposed to develop five industrial corridors.

• Delhi Mumbai Industrial Corridor
• Chennai-Bengaluru-Kochi Industrial Corridor
• Amritsar-Delhi-Kolkata Industrial Corridor
• Mumbai-Bengaluru Industrial Corridor
• Visakhapatnam-Chennai Corridor

To improve air connectivity, the Indian government has undertaken the UDAN project which aims to add new airports and routes to the aviation landscape of the country. Nearly 50 unserved and underserved airports (including 5 heliports) with 285 routes have been added under UDAN across the length and breadth of India. As the implementing agency, AAI has an ambitious plan to develop at least 100 airports/waterdromes/heliports by 2024 under the scheme. Besides, the Maharashtra government is also implementing the over Rs 16000 crore Navi Mumbai International Airport.

For rail connectivity, the Indian Railways has planned the Diamond Quadrilateral to establish a high speed rail network in the country. The Diamond Quadrilateral is designed to connect the four mega cities including Delhi, Mumbai, Kolkata and Chennai, similar to the Golden Quadrilateral project.

The Rs 6800 crore Zoji-la Tunnel project, touted as the Asia's longest bi-directional tunnel, in Jammu and Kashmir, is expected make the travel on Srinagar-Kargil-Leh Section of NH-1 free from avalanches and reduce the travel time from more than 3 hours to 15 minutes. The project is billed to be a modern-day marvel.

Saudi Arabia

Saudi Arabia, which is the world's second largest oil producer, is spending large monies on enchasing its reserves. The nation is developing a 22-year-long industrial city project Jubail II with a massive budget of USD 11 billion. The project is expected to comprise nearly 100 industrial plants and an oil refinery. The entire project is scheduled to be completed by 2024.

United Kingdom

At the same time, London has proposed around USD 25 billion cross rail project, a more than 40 km of extra track, which is being added to the tube system. Along with this, a few more high speed railway projects are planned and under construction in England with a cost of over USD 100 billion.

Dubai

Dubai, the most populous city of the UAE, has also proposed an investment of USD 82 billion to develop its second airport- Al Maktoum International Airport, which is envisioned to be the world's biggest airport. As per the plans, this airport is expected to have five parallel runways and service over 160 million passengers a year.

The city, known for its iconic creation Burj Khalifa- the tallest tower in the world, is also planning to set up an entertainment complex 'Dubai land' at a cost of over USD 64 billion. Spread across 173 sq.km, the complex is proposed to house various theme parks, sports venues as well as the world's biggest hotel.

Way forward

According to Global Infrastructure Hub, a G20 initiative, the current infrastructure investment trend in 2020 is USD 2.7 trillion, while the investment needed by 2040 is estimated at USD 4.6 trillion.

In the post Covid-19 era, a strong commitment to infrastructure spends will be crucial for countries to get back on the recovery mode and to achieve sustainable growth in the long-term, as such investments will be imperative to create more jobs, both direct and indirect, and in turn boost the economy. And Asian countries, among the emerging markets, are expected to take a lead in infrastructure investments in the next few decades.

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