US Commerce Chief To Lead Infrastructure Trade Mission to India.

New York: US Commerce Secretary John Bryson, a key member of President Obama’s economic team, will lead a delegation of 20 to 25 infrastructure companies on a business development mission to India, officials said on Monday.

The trade mission will make stops in Delhi, Jaipur and Mumbai between  March 25 and 30, 2012 and focus on infrastructure opportunities in India. The US business leaders will meet Indian government officials, prescreened potential partners, distributors and licensees.

In its draft Twelfth Five-Year plan for 2012-2017, the Indian government proposes to invest $1 trillion to upgrade infrastructure, almost double of what it had earmarked in the earlier plan, which ends in March 2012. It is banking on private sector participation, including foreign investment, to fund half the massive expansion through the Public-Private Partnership (PPP) model.

Unfortunately, there is little sign of any foreign investment pick-up in the infrastructure sector this year. United Nations data shows India received less than $20 billion FDI in the first six months of 2011, compared with more than $60 billion in China, while Brazil and Russia took in $23 billion and $33 billion, respectively. If India wants foreign investment to build its airports and toll roads it has to help the investment climate, speed up approvals of projects hit by red tape and environmental approvals.

Still, sales of big gnarly construction machines like excavators and cement mixers are up 20 percent since 2002 for US manufacturers thanks to the frenetic building activity coming out of China and India. Caterpillar Inc, the world’s largest maker of construction equipment is optimistic about where business is going in India over the next five years. India represents a huge market for companies like GE Construction and Caterpillar.

“Exports are leading the US economic recovery and contributing to future economic growth and job creation in America,”  Bryson, who has been the CEO of California-headquartered utility company Edison International for 18 years, told Firstpost.

“Selling more made-in-USA infrastructure products to India will help US companies grow and hire more people while helping India meet its ambitious goals to dramatically improve it roads, railway and bridges,” added Bryson.

Trade officials told Firstpost that the US delegation was focused on finding opportunities in India’s infrastructure sector which covered power, airports, toll roads, railways, ports and intelligent transport systems. The mission also includes firms providing project management and engineering services.

India needs to reform policies concerning project execution and long-term funding to fix its infrastructure, which is the biggest roadblock to its target of achieving a 9-9.5 percent annual growth during 2012-2017, Standard & Poor’s Ratings Services said in a recent report.

India’s road, railway and port expansions are falling far short of targets. In the year through March 2011, the National Highways Authority of India built 1,780 kilometers of motorways, about 30 percent less than its target. In the same period, the nation added 9,585 megawatts of power, 34 percent less than forecast.

Long delays in government and regulatory decision-making have caused infrastructure projects to fall way behind schedule. Reuters quoted an official, monitoring government infrastructure projects, saying that of 558 government projects, 241 were delayed as of end-July, resulting in a cost overrun of some 20 percent, or more than $31 billion. Most of the projects were held up by two years or more on average due to land acquisition and environmental clearance hassles.

Source : firstpost.com