Transport infra key to sustainable growth: KPMG

The infrastructure to transport energy is the key to achieving sustainable development in the country, emphasises the consultancy firm KPMG.

In its report, released at the Confederation of Indian Industries' (CII) India Energy Conclave 2007 here, it zeroes in on railways as a major weak link in the transport infrastructure.

Manish Agarwal, director, Infrastructure and Government Line of Business, KPMG-India, said, "Energy transport infrastructure such as ports, railways, pipelines and power transmission networks need significant investment. The policy now allows private participation in all these areas but the activity has not picked up. The railways, which is a major carrier of coal, remains a matter of concern and our study recommends further privatisation in railways, especially in the containers segment."

The study highlights that big players in the power segment are being forced to pursue integration in business.

Apart from their core business of generation, players are forced to take up mining and other businesses due to the growing demand and supply gap and high gestation period in the industry, said Agarwal.

On capacity addition by power generation and transmission companies in the country, Agarwal pointed out that the addition had not received timely and equal support from equipment manufacturing companies.

"More than capital, it is the availability of equipment and components that needs to be addressed. Transmission equipment companies, for instance, are not ready to scale up from say 10 projects to even 50 projects, given the kind of growing demand."

India, according to Agarwal, observes a capacity addition cycle of 3-5 years as compared with the US where the cycle is as short as 12-18 months.