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infrastructure-in-india-PWC 4
infrastructure-in-india-PWC 4
Infrastructure in India
A vast land of construction opportunity
pwc 1
Contributors Jonathan Hook, Michael Cracknell, Vasant Gujararthi, Ravi Bhamidipati,
Amrit Pandurangi, Girish Mistry, Hemal Zobalia, Vishwas Udgirkar, Mukesh Rajani,
Graham Dredge, Jimit Devani and Raj Julleekeea.
Principal author Elizabeth Montgomery
Graphic design Hamilton-Brown
PricewaterhouseCoopers
Contents
Welcome 3
Introduction 5
Foreign Direct Investment (FDI) and the regulatory environment 6
Opportunities 7
Roads and highways
Rail
Ports and airports
Power
Public private partnerships
Challenges for local players and foreign companies looking to enter the market 14
Building a sustainable future in India 16
Concluding thoughts 17
Further reading 18
PricewaterhouseCoopers expertise in the E&C industry in India 20
In this paper, we examine the opportunities created, how onshore versus offshore Reasons to invest in India:
for the engineering and construction (E&C) services and supplies are managed in a
industry in India, one of the fastest growing • One of the world’s fastest growing
particular contract, and indirect tax economies – and growth expected to
economies in the world. We also focus on implications can all have a major impact
the structuring opportunities and some of continue at 7-7.5% despite the global
on the bottom line. Further, foreign players downturn
the challenges overseas participants are are likely to need to identify promising
likely to encounter. • Few restrictions on foreign direct
local companies, then make a case for a
investment (FDI) for infrastructure
India’s economy is big and getting bigger. profitable partnership, in order to achieve
projects
PricewaterhouseCoopers estimates a win-win situation in India. Still, there is a
that India will become the world’s third strong rationale for many E&C companies • Tax holidays for developers of most
largest economy by 2050. Liberalisation to invest in India sooner, rather than later. types of infrastructure projects, some
Not only are there substantial of which are of limited duration
of government regulations and a
deliberate strategy on the part of the opportunities now, but establishing • Opening up of the infrastructure sector
Indian Government to promote relationships and a presence in the market through PPPs
infrastructure spells opportunity for E&C can help to ensure continuing project
companies. potential over the medium- and long-term. Projected spending from FY07-FY12
Nearly all of the infrastructure sectors Looking ahead, we believe that it is in selected infrastructure segments:
present excellent opportunities, with roads imperative that infrastructure development • Electricity: US$167 billion
and highways, ports and airports, railways occurs in a sustainable manner, in India • Railways: US$65 billion
and power standing out as particular and around the globe, if the impact of
• Road and highways: US$92 billion
bright spots, with staggering sums of climate change is to be slowed to broadly
investment planned. Public private acceptable levels. The Indian Government • Ports: US$22 billion
partnerships (PPPs) are gaining in must maintain a commitment to ensuring • Airports: US$8 billion
importance, and are benefiting from that rapid growth does not happen at an
government support – targeted PPP untenably high environmental cost, and
participation is US$150 billion. Companies infrastructure projects will play a key role
experienced in structuring these types of in ensuring the success of ‘green growth’.
deals should be able to use their expertise Those E&C companies taking a holistic
to good effect in the Indian marketplace. approach to building a sustainable
infrastructure will have a strong
Operating in India requires a thorough
competitive advantage.
understanding of the local market.
Companies need to do their homework in
order to understand a host of tax and
regulatory issues before bidding on
projects or setting up operations. Whether November 2008
or not a permanent establishment is
Jonathan Hook
The Indian economy is booming, with realistic, even given the global credit Private sector participation is integral
rates of Gross Domestic Product crunch, and assured observers that to these plans. PPPs have been
(GDP) growth exceeding 8% every the country’s Government will take identified as the most suitable mode for
year since 2003/04. This ongoing action if necessary to support the implementation of projects – and
growth businesses and indeed, are rapidly becoming the funding
is due to rapidly developing services the financial markets. Mr. Singh has also norm. Their share of the total planned
and manufacturing sectors, increasing singled out infrastructure investment as infrastructure improvements is projected
consumer demand (largely driven by particularly vital. to be around 30% (US$150 billion). Power
increased spending by India’s middle and road projects top the list, and other
class) and government commitments to Indeed, even with a somewhat slower
transportation sectors such as railways,
rejuvenate the agricultural sector and rate of growth, the Indian economy is still
ports, and airports are also targeted for
improve the economic conditions of expanding significantly, and substantial
investment in infrastructure continues major investments.
India’s rural population. Construction
is the second largest economic activity to be required in order to sustain India’s Companies looking to capitalise on the
in India after agriculture, and has been economic progress. The country’s situation need to plan their strategy
growing rapidly. The production of capacity to absorb and benefit from new for entering the market carefully.
industrial machinery has also been on the technology and industries depends on the Understanding the local market,
rise – and the increasing flow of goods has availability, quality and efficiency of more including selecting complementary local
spurred increases in rail, road and port basic forms of infrastructure including partners, is vital. Tax optimisation is a
traffic, necessitating further infrastructure energy, water and land transportation. In key cost
improvements. some areas, roads, rail lines, ports and component – while substantial tax benefits
airports are already operating at capacity, are provided for infrastructure projects,
In the fiscal year ending March 2008, so expansion is a necessary prerequisite developers need to be savvy about
India’s GDP grew by more than 9%. to further economic growth. structuring their contracts. Good tax
This robust rate of expansion was planning can have a potentially decisive
initially forecast to continue in the 2008- The Indian Government recognises this
imperative. As per the Eleventh Five Year impact, especially in bidding situations,
2009 fiscal year. In summer 2008, and help to avoid unnecessary litigation
however, the combined impact of Plan, more than US$500 billion worth of
investment is planned to flow into India’s later.
slowing Indian consumption, a higher
domestic cost infrastructure by 2012. Construction
of capital and reduced capital access projects account for a substantial portion
of the proposed investments, making
from international capital markets raised
the E&C sector one of the biggest
concerns by some analysts that the rate
beneficiaries of the infrastructure boom
of growth might be slowing. In October
in India. The regulatory environment is
2008, India’s Prime Minister, Mr.
relaxing to encourage further foreign direct
Manmohan Singh, affirmed the
investment (FDI).
Government’s view that a rate of growth
of 7-7.5% remains
Foreign Direct Investment (FDI) and the regulatory
environment
Currently, India has FDI of about US$21 collaboration agreement in the same field • Power generation, transmission and
distribution and power trading (atomic
billion per year, well below the targeted
energy not permitted)
US$30 billion. In order to increase
FDI inflows, particularly with a view to • Mass rapid transport systems
catalysing investment and enhancing • Townships, housing, built-up infrastructure
infrastructure, the Indian Government has and construction-development projects
introduced significant policy reforms. For
example, it now permits 100% FDI under
the automatic route for a broad range of
sectors (see Figure 1) – only certain post- to promote the construction sector, the the development of certain sectors in India
investment intimation is required. For Indian Government has relaxed some may be hampered due to lack of adequate
FDI in a few sectors, a prior approval is of the exchange control restrictions and co-ordinated planning. Projects
required, which takes around 6-8 weeks. and is now allowing foreign nationals/ which are approved may face difficulties
As part of policy reforms, the Indian citizens to acquire immovable property in if related projects are substantially
Government is constantly simplifying the India, subject to certain conditions and delayed. One example is Bangalore’s new
approval route process, including setting procedures. international airport, one of the largest
up several agencies to expedite PPP projects to date. The project is facing
Hurdles to investment remain. Although
FDI approval. Further liberalisation is growing pains related to insufficient road
India has a well-developed legal
expected as the Government continues to and rail connections to the new facility,
system, the current legal and regulatory
emphasise infrastructure investment. in part due to delays of expected high-
environment sometimes acts as an
speed rail and highway projects under the
In August 2008, a press report stated that obstacle to the necessary injections
auspices of other government bodies.
Morgan Stanley was looking to invest of foreign private capital into India’s
up to a quarter of its US$4 billion global infrastructure. Major infrastructure
infrastructure fund in emerging markets, projects are governed by the concession
notably India and China – and that in India, agreements signed between public
Morgan Stanley would face competition authorities and private entities. Tariff
from Australia’s Macquarie Group, JP determination and the setting of
Morgan, Goldman Sachs and Deutsche performance standards vary somewhat by
Bank, all looking to channel foreign sector. In the roads and highways sector,
investors’ money into Indian infrastructure. the ministry generally sets tolls – while in
While some of this planned investment major ports projects, and many of those
may be reduced or delayed given the in electricity generation, an independent
current environment in the credit markets, regulator will decide relevant tariffs. In
India is still likely to garner substantial the airport sector, a new independent
FDI, particularly if its economy is able to regulator is planned for 2009 and is likely
maintain a fairly strong rate of growth in to play a major role in determining tariffs in
the face of a global recession. concession agreements for the segment.
In some instances, ministry or regulator
From an exchange control perspective, control over potential proceeds can act as
India is moving towards full current a disincentive to the private infrastructure
account convertibility. Most revenue developer.
transactions are freely permitted,
except certain transactions like royalty, As is the case in many countries, there
is no single regulator which formulates
consultancy fees, etc., which are
the policy for all infrastructure projects.
subject to certain limits. Capital account
There is also no standardisation in the
transactions need prior approval, except
concession agreements across the
where specifically permitted. In order
different infrastructure sectors. As a result,
Opportunities
What segments present the best road infrastructure. Plans announced by are likely to reach the US$700 million-
opportunities for E&C companies? The the Government to increase investments US$800 million range. About 53 projects
Planning Commission of India has planned in road infrastructure would increase funds with aggregate length of 3000km and an
extensive expansion in the roads and from around US$15 billion per year to over estimated cost of around US$8 billion
highways, ports, civil aviation and airports, US$23 billion in 2011-12 (see Figure 2). are already at the pre-qualification stage.
and power infrastructure segments – all of The quantum of funds invested as part
which provide substantial opportunities for The procurement process favours players
of these programmes will significantly with good experience and sound financial
E&C companies. exceed that invested in recent history.
strength.
Such programmes would be funded via
Roads and highways a mix of public and private initiatives (see The opportunities do not stop there. More
Table 1). than 10 states are also actively planning
India’s roads are already congested, The Indian Government, via the National the development of their highways. While
and getting more so. Annual growth is Highway Development Program (NHDP), the average size of these projects is
projected at over 12% for passenger is planning more than 200 projects in smaller than the NHDP projects, most will
traffic and over 15% for cargo traffic. The NHDP Phase III and V to be bid out, still be substantial, in the US$100 million-
Indian Government estimates around representing around 13,000km of roads. US$125 million range. All told, more than
US$90 billion plus investment is required The average project size is expected to 4,500km of state highways are likely to be
over FY07-FY12 to improve the country’s US$150 awarded by the end of 2010.
million-US$200 million. Larger projects
Figure 2: Projected Investment in the Road & Highways Sector in the Eleventh Plan
23,387
Investment (US$ million)
25,000 19,971
17,273
20,000 15,976
15,104
15,000
10,000
5,000
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E&C companies looking to invest in India Table 2: Types of taxes which may be applicable for E&C companies operating in India
need to consider a variety of tax issues.
Overall tax rates can be relatively high,
Nature of tax Governing Authority Rate of Tax (in %)
so careful tax planning is vital. Some
of the relevant taxes applicable to E&C Income Tax Central Government 33.99
companies are listed in Table 2.
Fringe Benefit Tax Central Government 33.99
Transfer pricing regulations were
introduced in India in 2001. Although Custom Duty Central Government Up to 31.70
transfer pricing regulations are a relatively Excise Duty Central Government Up to 14.42
recent phenomenon, the authorities have
taken an aggressive stance. There is no Service Tax1 Central Government 12.36
advance pricing arrangement (APA) yet
in India, so the implications of transfer Sales Tax/Value Added Tax (‘VAT’)1 State Government 4.00 to 12.50
pricing remain somewhat uncertain. 1
India is planning to implement a unified goods and service tax (GST) in 2010 at a rate still to be determined.
The Government’s strong focus on
promoting infrastructure development
also extends to tax policy, with a number
of policy measures and incentives now in
place for the construction of infrastructure Table 3: Overview of tax holiday terms for various infrastructure segments
facilities, including a numbers of tax
holidays, although Minimum Alternate
Tax (MAT) of 11.33% may be payable on
Sector Applicability Time-frame Eligibility
book profits during this period. Relevant dividen • Includes water supply
Power • ‘Undertaking’
tax holidays, their applicability, and the d project, water
which generates
eligibility of each infrastructure sector are treatment system,
payme power
irrigation project,
detailed in Table 3. nts, • ‘Undertaking’ which sanitation and sewerage
there transmits or system or solid waste
would distributes power management system
Structural considerations for be an • ‘Undertaking’
developers up to which carries out
10% substantial
Dividends paid by an Indian company renovation and
cash Ports & Airports
are subject to a Dividend Distribution modernisation+
trap in
Tax (‘DDT’) of around 17%. • Indian companies
the
developing and/or
In February 2008, the Finance Minister Indian
operating &
announced some relief whereby a operati maintaining ports
dividend paid to a parent company by its ng and airports
subsidiary would not be liable to DDT, • Applicable also to
subject to prescribed conditions. Earlier, Railways Inland waterway,
corporates had a lean structure with one Inland port,
company having many divisions catering Navigational
to different businesses. channel in the sea
• Indian companies
Following the recent change in DDT, many Roads & Highways developing and/or
corporates may be considering operating &
restructuring their corporate structure so maintaining rail
that different business streams have system
separate Indian operating companies with
one common Indian parent. While such
• Indian companies
types of structuring may help the parent developing and/or
company operating &
to unlock shareholder value and should not Water maintaining roads
impose any additional levy of DDT, it and highways
should be noted that introducing a new • ‘Roads’ – includes
corporate layer at the Indian level will toll roads, bridges
bring the shares in the Indian operating • ‘Highways’ –
company within the Indian capital gains tax includes housing
net. or other integral
activities
Additionally, even if DDT is not due on
• 10 consecutive years out of 15 years ity
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companies, as in accordance with Indian establishment position, where if the contract would include both onshore and
regulatory provisions, only 90% of a Indian tax authorities successfully offshore activities (see Figure 3). Taxability
company’s distributable reserves may be argue that there is an Indian permanent of payments received by foreign
paid as dividends. establishment of the foreign operations companies under EPC contracts has
Therefore, a construction company in India, then there maybe significant become a matter of great debate and
working on multiple projects in India adverse tax implications. It is therefore litigation. Onshore
should consider all relevant factors important to carefully manage the supplies and services are normally taxable
bespoke to their requirements before operations carried out at the Indian level. in India. Offshore supply of goods and
structuring their operations. In practical terms in the E&C industry, services under a composite contract are
activities generally take a long duration something of a grey area. The Indian
to complete, and hence PE clauses revenue authorities often attempt to bring
International tax considerations (especially fixed base and service PE) the entire EPC contract, including the
come into play in this industry more often. offshore supplies and services, within the
Effective tax structuring into India is vital Table 4 details common types of PEs and range of taxes in India. The tax authorities
as this impacts on how attractive a
their considerations. may cite a business connection in India,
project is to target investors and has a
direct influence on the net internal rate of and also note the presumed indivisibility of
return. It is therefore particularly Cash and profits repatriation EPC contracts.
important that international investment Profit repatriation – There are various Nonetheless, some recent landmark
opportunities options on repatriating profits from the judicial rulings with regard to EPC
are structured appropriately to take into structure, such as dividend distributions, contracts in India suggest that tax
consideration tax, accounting, regulatory share sale, capital reductions, etc, all with outcomes for each of the components
and legal aspects. We have outlined differing tax impacts. of the contract must be determined
below some of the key areas to consider.
independently. These rulings have brought
Engineering, procurement and about a general principle that profit from
Entry and exit strategy construction (EPC) contracts – offshore supplies would not be taxable in
Holding company location – Appropriate onshore versus offshore India, subject to the following conditions:
planning in respect of a holding company In the E&C industry, the execution of • Principal to principal transaction
jurisdiction is necessary to minimise projects is undertaken substantially by • Title (i.e. risk and ownership) in the
Indian withholding tax and Indian capital way of an engineering, procurement and offshore supplies passed to the buyer
gains on the sale of shares in Indian construction (EPC) contract. A typical on high seas (outside India)
companies. EPC contract will have the following • Sale consideration is received outside
Financing – In order to introduce debt into scope of work in a single project: India
India, there are various issues that need • Supply of equipment (offshore and • Sale is at arm’s length
to be considered such as the Indian onshore)
External Commercial Borrowings rules, • Installation/commissioning Although the above rulings suggest that
withholding tax issues on distributions out offshore supply and services may not to
• Services (offshore and onshore)
of India and the availability of a tax be taxed in India, the taxability depends
deduction for the distribution at the Indian • Software/technology transfer (offshore on the specifics of each case. Further, the
level. and onshore) revenue authorities have not accepted
Under a typical EPC contract, a non- the above rulings and the matter is
Holding the investment resident contractor performs a multitude pending before the higher judicial
of activities. The scope of work under an authority. E&C companies should take
Permanent Establishments – One of care to structure contracts in a tax
EPC
the risks with managing investments in efficient manner, taking
India is managing the Indian permanent into account the particulars of each project.
12 PricewaterhouseCoopers
Higher depreciation – what Figure 3: Elements of a Typical EPC Contract
lies ahead?
EPC Contract
In order to make infrastructure projects
more attractive for companies and
investors, the Indian Government is
re-examining the existing depreciation
policy for such entities. The infrastructure
sector may be eligible for a higher rate Engineering Supply Erection,
& Design of Installation &
of depreciation in book value for BOOT
Equipm Commissioning
(build, own, operate, transfer) projects.
The Government is still examining this
proposal and also evaluating whether
depreciation
Offshore servicesOnshore services Offsh Onsh Onshore
could be a policy for amortisation of the ore ore
Sup Sup
entire expenditure for such companies.
Private players are needed to invest in
infrastructure projects on the BOOT
basis, and in the future, infrastructure
companies may benefit from the creation
of a sinking fund by such companies for
the concession period. Such a fund would
depend on the life of the project and the
concession period could vary widely,
depending on the contractual conditions of
the specific project. Table 4: Types of Permanent Establishments, when they occur, and issues to consider
“Foreign firms do Without doubt then, there is huge Domestic production of equipment and
not get their own opportunity in the Indian infrastructure
space in the short- and medium-terms
machinery is ramping up fast, but in the
short term, a foreign partner may be
infrastructure to at least. The policies of the Indian able to help fill in any gaps. There are
Government, which have been many factors that influence the role of
execute projects, such evolving very rapidly in recent years, the local players vis-à-vis foreign players
continue to encourage the private – for example, the criteria used for the
as skilled manpower, sector in taking on a larger and more selection of developers is an important
plants & equipments diverse role – from being an
infrastructure builder (under
influencer on what role the foreign
players will take.
and construction a publicly fi arrangement) to an Risk-sharing on a PPP project also needs
infrastructure developer (under PPP to be carefully considered. The revenues
materials etc. They structures which include private fi of most infrastructure projects in India will
These developments have led to a be denominated in the local currency.
usually try to employ large Foreign players will need to consider the
locally available number of infrastructure projects open up
as opportunities for the private sector.
currency and tax issues already
mentioned in some detail, particularly on
resources in order to Considering the liberal FDI guidelines,
a PPP project where
significant private investment is also sought.
cut costs.” these lucrative projects present both an
opportunity and a threat to local players. In International EPC contractors, including
Quote from a Government representative many cases, foreign players are believed Toyo Engineering, Jacobs H&G, Uhde,
to have greater technological expertise, Tecnimont and Aker Kvaerner, are already
deeper pockets and more extensive leading players in India. At the same time,
experience compared to domestic many Indian companies e.g. Larsen &
companies. These advantages could Toubro (L&T), Gammon, Bharat Heavy
mean overseas companies winning work Electrical Limited (‘BHEL’), Engineers India
at the expense of local players, or Ltd and Thermax have either scaled up
partnering with them. Domestic E&C their skill sets or extended their operations
companies to overseas projects.
may therefore look at foreign entrants in
India has a very well established
the market as tough competitors – or as
infrastructure developer market. Local
strong potential partners.
firms have evolved in recent times into
If most of the forecasted projects go fully-fledged national players (and in
ahead as planned, there should be more some cases international players). In
than enough work for everyone. Wharton certain sectors, such as highways, power
Business School’s 2007 analysis of India’s and
construction boom pointed out that the water, the local firms also have significantly
proposed US$50 billion infrastructure progressed on the technological front.
spend per year in India is nearly two and Some of the India-based companies
half times the current turnover of the entire such as L&T, Punj Lloyd, Reliance,
existing domestic construction industry GMR,
(US$15 billion and growing fast), and that Suzlon, Tata Power, etc. are very active in
many of the major E&C companies have the international markets and thus, can no
massive order backlogs. Wharton also more be deemed ‘local’ E&C companies.
flagged talent shortages as an issue in Indeed, they are global organisations
key skilled trades such as fitting, welding, based out of India. These and other large
masonry and plumbing – so drawing on firms clearly look at foreign players as
the talent pool of foreign partners may both partners and competitors. However,
help in supplementing and training local smaller and medium-sized infrastructure
tradesmen. India is also facing shortages construction companies and developers
of construction equipment and machinery. (such as KMC, Nagarjuna, IVRCL,
Gammon, etc.) are often happy to partner
with foreign players without necessarily
considering them as competitors. “Foreign companies offer an excellent
The recent guidelines issued by the opportunity for a comprehensive tie-up to win
Indian Government for the selection
of PPP developers have also led to a projects and share the spoils. An attendant
slightly distorted behaviour in the local
marketplace. The guidelines favour
benefit is the transfer of technology to us at the
larger players, even when the project
investments and execution can be easily
end of it all.”
carried out by mid-sized companies. Quote from an Indian E&C company
This has led to situations where many
of the small/medium-sized local players
are looking at partnering with the foreign
players primarily for the purpose of
getting qualified and winning the job,
rather than to actually bring in investment “Entry of foreign players needs to be viewed as
or expertise. It is expected that such
behaviour will soon change as the a positive development to add value and state-
guidelines become more reflective of
market dynamics and mid-sized Indian
of-the-art technology to our highway projects.
companies mature. These firms will bring with them greater expertise
Foreign players looking to enter into the
Indian marketplace and team with local
in areas of highway construction technology,
players need to evaluate carefully the project management, project implementation
cost competitiveness of their prospective
participation. India has witnessed and monitoring expertise as well as technology
huge interest from a number of foreign
infrastructure companies in the past, transfer. The resultant benefits include savings in
but not many have really been able to
offer a cost-competitive proposal. Since
cost, time and improved quality of works, to the
India has evolved its own model of cost benefit of all.”
competitive delivery in many sectors
(for example, in telecoms), local players Quote from a Government representative
have an incentive to work with foreign
companies only if the partnering offers
a competitive edge over other bidders.
There have been few such success stories
so far where the foreign player has offered
a particularly cost-competitive product “Let us tie up with foreign companies from
or service. In instances where we have
seen the successful entry of foreign countries where we intend to do business in.
players (such as in the port sector), foreign
companies have often been able to bring
While we can help them enter India, they could
technology or management advantages, help us in expanding our business outside India
or expanded reach into international
markets, to supplement the capabilities of in countries where they operate.”
local partners. Quote from an Indian E&C company
Building a sustainable future
in India
Whilst the need for greater infrastructure in key social and economic infrastructure In our view, it is imperative that debate on
investment is clear, equally important is are maximised. the issue of sustainability in infrastructure
the need to sustainably manage such provision is heightened and that the
Global climate change creates further
investments. The Indian Government’s challenge that it presents is effectively
success in infrastructure provision will be challenges. New infrastructure must not
met. Government and infrastructure
measured not by the quantum of funds only support social and economic goals, it
agencies will also need to retain sufficient
invested, but on how infrastructure must also do so within acceptable focus on issues of feasibility and
contributes to the achievement of India’s environmental parameters. In our analysis prioritisation when the primary focus shifts
economic, social and environmental The World in 2050: Implications of global to delivery.
objectives. Importantly, infrastructure growth for carbon emissions and climate
investment should be considered as a change policy2, we set out a number of E&C companies looking to bid on major
means to an end, not an end in itself. possible scenarios for climate change projects need to ensure that they are
based on projected growth rates. In only taking a holistic approach which
Challenges in infrastructure provision are one of the scenarios, ‘Green growth + incorporates sustainability issues into the
not unique to India. Uncertainty, scarcity Carbon capture and storage (CCS)’, were design of the project, both in the planning
of available funds for investment, and emissions held to levels that are broadly and the delivery stages. Those that do so
competing priorities present challenges to considered to be ‘acceptable’ by have a unique opportunity to make a
all governments in infrastructure planning climatologists. major difference in a growing economy
and delivery. Sustainability requires that while enhancing their own bottom line.
future generations are not compromised Given that India’s growth rate is likely to
by the investment decisions of current continue at high levels, it is important that
generations. Sustainably managing considerations of issues such as fuel mix,
infrastructure through the appropriate encouraging more fuel efficient modes of
pricing, funding and prioritisation transport such as rail, and the possible
frameworks is important to ensure the use of CCS technology, come fully into
benefits that accrue from the significant discussion and are implemented whenever
investment that India is currently making possible.
2
Available to download at www.pwc.com
Concluding thoughts
Building Knowledge
A quarterly series of short papers on highly topical issues for E&C companies, hitting
directly to the heart of the business issue addressed.
Additionally, further reading on investing and operating in India, including
the following, is available to download at www.pwc.com/in
Destination India
Gives potential foreign investors a bird’s eye view of the tax and regulatory framework in
India. A foreign investor looking at investment opportunities in India, needs to decide its
entry strategy and business model while bearing in mind the gamut of Indian laws and
regulations impacting such foreign investment. The publication attempts to provide an
introductory summary of the policies, laws and regulations in India and a guide to the
more important aspects of doing business in India
India Spectrum
This quarterly newsletter encompasses a summary of recent important judicial and
legislative developments in the field of direct tax, indirect tax, transfer pricing, exchange
control regulations, and mergers & acquisitions.
PricewaterhouseCoopers expertise in the E&C
industry in India
In India, PricewaterhouseCoopers has development includes advising on some Key contacts for E&C in India:
extensive experience of working with E&C of the first port projects on a PPP basis,
companies and has a dedicated group of providing bid advisory and financial
over 350 professionals advising clients close assistance and strategic advice to
in the industry. The infrastructure team large Indian/international port
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& Government practices. Our knowledge logistics player in strategic investments Ravi Bhamidipati
management programme focuses on and valuations
ravi.bhamidipati@in.pwc.com
the building of close networks and the for ports. We are currently advising a
sharing of information and expertise. Our government ministry on the development +91 (22) 6669 1308
assignments in all regions of the sub- of an international container trans-
continent have included both private and shipment terminal.
Advisory
public sector clients.
PricewaterhouseCoopers experts were
We have played an integral part in also involved in the first rail BOT project Amrit Pandurangi
the evolution of the highways sector, in India. We have experience advising amrit.pandurangi@in.pwc.com
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NHAI & Department of Road Transport railway projects and have also advised
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projects (total length of about 1700km) the Ministry of Railways on strategy
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As PPP projects are still relatively new Tax
Concession
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Concession Agreement (MCA), BOT Toll
correct tax position is important. Although +91 (22) 6689 1433
agreement & BOT Annuity agreements,
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agreements. Further, we assisted the
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Our team has also advised both public Raj Julleekeea
Tax is also a key cost component. It is
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Airport and advising the Airport Authority
have a potentially decisive impact,
of India on a feasibility study of five
especially in the bid process, and can
non-metro airports, to bid support for
provide a clear competitive advantage.
a development project in Mumbai, to
PricewaterhouseCoopers was named
advising the AAI/Ministry of Civil Aviation
2007 India Tax Firm of the Year by
on formulating cargo policy.
International Tax Review (ITR)
Our experience in the area of ports magazine.
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