News Archive
Sun keeps rising on Indian construction boom
Released on 30/08/2008
While the credit crunch slows house building and shelves major projects in the West, infrastructure development is steaming ahead in India despite high interest rates and a general growth slowdown.
Construction there grew 11.4 per cent in the quarter ending June 2008, against the economy-wide growth of 7.9 per cent, which was down from 9.2 per cent in the same quarter last year, according to India’s Central Statistics Organisation (CSO).
Mining and quarrying were the only other sectors apart from construction showing growth in the quarter.
Meanwhile, Reuters reports that Morgan Stanley hopes to invest up to a quarter of its US$4 billion global infrastructure fund in India and other emerging economies such as China.
Morgan Stanley is so confident in the Indian market that its new head of Infrastructure in India, Middle East and sub-saharan Africa, Gautam Bhandari, is moving to India from New York to recruit a team and act on the development opportunities the firm sees in Indian transport, energy and telecom infrastructure.
“Not every market is ready in terms of private infrastructure investments. India is," Bhandari told Reuters. “There is a fair amount of public-private partnership success here, and looking at the velocity of deals, we felt the need to place a dedicated team here.”
The government estimates about US$500 billion will be needed to rebuild its crumbling roads, airports and power plants by 2012, and has said the lack of infrastructure is a constraint on growth in Asia’s third-largest economy.
Bhandari is moving to India from New York to head a team nearly as big as big as the North American team.
He said Indian interest rates at a seven-year high and falling stock markets have made it easier to negotiate deals with developers.
“Our deal pipeline shows now there are progressive developers who are looking to close deals,” he said.
