Role of Infrastructure in Development

Presentation Structure

Definition of Development

Definition of Infrastructure

Example of International and local Infrastructure project

The impact of Infrastructure on Development

Infrastructure Development in India

Role of Infrastructure in Economic Development in India

Definition of Development

Economic development is fundamentally about enhancing the factors of productive capacity - land, labor, capital, and technology of a national, state or local economy

By using its resources and powers to reduce the risks and costs which could prohibit investment, the public sector often has been responsible for setting the stage for employment-generating investment by the private sector.

Definition of Infrastructure

The basic facilities, services, and installations needed for the functioning of a community or society, such as transportation and communications systems, water and power lines, and public institutions including schools, college,hospital,post offices etc.

Modern day thinking suggest that other forms of infrastructure exists, these include Technology and Human infrastructure.

Technology infrastructure consists of science, engineering, and technical knowledge available to the nation’s industries.

Human infrastructure consider education and training as a form of investment that will generate future benefits

Example of International and local Infrastructure project

To gain a better appreciation of the various types of physical infrastructure we can briefly review various infrastructure projects

We will look at three International and three Local Physical Infrastructure Projects

International Infrastructure projects

The top 10 construction achievements of the 20th Century are:-

1. Chunnel Tunnel.2. Golden Gate Bridge 3. Dwight D. Eisenhower System of Interstate and Defense Highways4. Empire State Building5. Hoover/Boulder Dam6. Panama Canal. 7. Sydney Opera House. 8. Aswan High Dam9. World Trade Center10.Chek Lap Kok Airport in Hong Kong.

Of these projects I have selected the Tunnel, Golden Gate Bridge and the Panama Canal for review.

International Infrastructure projects-The Tunnel

The opening of the Channel Tunnel in 1994 turned the centuries old dream of a fixed link between the UK and mainland Europe into a reality

The average depth of the tunnel is around 150 feet under the seabed

It consists of two single-track railway tunnels and a central service tunnel used for safety and services

There are three different tunnels that make up the Chunnel. It consists of two single-track railway tunnels and a central service tunnel used for safety and services

The tunnels are used for both freight and passenger traffic

The three tunnels combined make up 95 miles of tunnels dug by nearly 13,000 engineers, technicians, and workers.

International Infrastructure - The Panama Canal

The Panama Canal crosses the Isthmus of Panama, in Central America, and allows vessels to travel between the Pacific and Atlantic oceans

The waterway measures 64 km (40 miles) and enables vessels to avoid travelling around South America, thereby reducing their voyages by thousands of miles and many days

It was built by the United States from 1904 to 1914

It was the largest and most complex project , employing ten thousands of workers. Total cost to date has been approximately US$11.52

International Infrastructure – Golden Gate Bridge

The Golden Gate Bridge is a 1.7 mile-long suspension bridge that took over four years to build and links San Francisco with Marin County

The Golden Gate Bridge was opened to vehicular traffic on May 28, 1937.

The bridge's two towers rise 746 feet and the bridge crosses Golden Gate Strait which is about 400 feet

The Golden Gate Bridge was completed at a construction cost of US$438M in 2002 dollars.

Local Infrastructure Projects

Local Infrastructure – National Highways of India

The National Highways Network of India, is a network of highways that is managed and maintained by agencies of the Government of India

These highways measured over 70,934 km as of 2010, including 15,000 plus km are 4 or 6 laned and remaining are 2 laned

The National Highways Authority of India (NHAI) is the nodal agency responsible for building,and maintaining most of the national highways network

It operates under the Ministry of Road Transport and Highways

Local Infrastructure – Ports

India has a long coastline, spanning 7516.6 kilometres, forming one of the biggest peninsulas In the world There are also 7 shipyards under the control of the central government of India, 2 shipyards controlled by state governments, and 19 privately owned shipyards The major ports handled 423.4 million tons of cargo for the financial year 2005-2006, with Vishakhapatnam, Kochi, Paradip Port, Chennai Port and Kandla carrying the greatest tonnage

The Impact of Infrastructure on Development

The Impact of Infrastructure on Development

Note that the examples of infrastructure that have been presented so far only represent a small subset of the possible types of infrastructure projects. Infrastructure as noted in our earlier definition includes:

Transportation systems Communications systems

Water supply

Power supply

Public institutions

• Post Offices• Fire Stations • School• Parks

The Impact of Infrastructure on Development

  Research on the impact of infrastructure on growth has concluded that the role of infrastructure in growth is substantial, significant and frequently greater than that of investment in other forms of capital projects.

Infrastructure services, such as power, transport telecommunications, provision of water and sanitation are central to the activities of households and to economic production.

Infrastructure represents the wheels of economic activity and is used in the production process of nearly every sector. Transport, for example, is an input for every commodity, while our very lives, let alone economic activity,would be impossible without water.

Users demand infrastructure services not only for direct consumption but also for raising their productivity.

The Impact of Infrastructure on Development

Infrastructure covers many sectors and can collectively represent a large share of a country’s economy.

Infrastructure typically represents about 20% of total investment and 40- 60% of public investment in most developing countries.

Public infrastructure investments range from 2-8% of GDP

Infrastructure Development in India

Infrastructure Development in India- Power Sector

The power in India growth from the present generation capacity of 2,00,000 MW to 4,00,000 MW by 2022 the terminal year of the 13th Five-Year plan

All sources of energy conventional coal, hydro, solar, and nuclear are all bound to grow simultaneously in the coming years due to the well enunciated policy issues by the Govt

China is a $ 8 trillion economy today and America a $ 16 trillion economy. India will definitely grow and if the economy grows at 5 per cent the power sector has to grow at 7 to 8 per cent.

Infrastructure Development in India- Oil and Gas

India 5th largest consumer of energy

About 5.7 billion barrels of proven oil reserve

FDI worth us$ 3332.78 million during April 2000 to December 2011

Infrastructure Development in India- Telecommunication

3rd largest in the world and 2nd largest in Asia

Mobile subscriber base 936.12 million

Broadband subscriber 13.42 million

Role of Infrastructure in Economic Development in India

In the late 2000s, India's growth reached 7.5%, which will double the averag income in a decade. It say that if India pushed more fundamental market reforms, it could sustain the rate and even reach the government's 2011 target of 10%.[

The annualized 1999–2008 growth rates for Tamil Nadu (9.8), Gujarat (9.6%), Haryana (9.1%), or Delhi (8.9%) were significantly higher than for Bihar (5.1%),India is the tenth-largest economy in the world and the third largest by purchasing power parity adjusted exchange rates (PPP). On per capita basis, it ranks 140th in the world