Newsletter | June 2018
Infra News
 

Centre plans to set up national discom

NEW DELHI: The Union government plans to set up a national power distribution company that will handhold state discoms in electricity distribution activities and ensure time-bound implementation of central schemes. The proposed company will compete with private firms and contractors to bag contracts of state-run distribution companies for appointing franchisees or engineering tenders, officials said. More

India’s infrastructure set for big boost! Over 300 highway projects to be completed by March 2019

Earlier this week, a two-day review meeting was conducted in Goa, where Union Minister Nitin Gadkari, who heads the Ministry of Road Transport and Highways, reviewed the ongoing highways projects across 20 states. More

5G services to be rolled out in India by 2020

Telecom Minister Manoj Sinha has set the target for commercial roll-out of 5G services in India by 2020 which will be at par with other countries. More

Electric vehicle charging infra to come up at Metro stations in phases

In sync with the electric vehicle (EV) push of the Union government, Hyderabad Metro Rail Limited (HMRL) along with its partners announced that it will be setting up EV charging infrastructure at Metro stations in the city. The tripartite agreement to carry out the task was inked between infra giant Larsen & Toubro (L&T), HMRL and Power Grid Corporation of India Ltd (PGCIL) on Saturday. More

India aims to partner with UN to promote use of solar energy

New Delhi: India aims to partner with the UN to use solar energy at the world body's premises as part of the efforts to protect and preserve environment, the country's Permanent Representative to the UN Syed Akbaruddin has said. More

How new-age infrastructure projects are redefining India

The rising aspirations and needs of citizens are driving India towards new-age infrastructure where “SMART” is the byword. Almost every new infra project, be it public or private, coming up in the country is bringing in elements such as internet, internet of things, automation and technology to make it a part of evolving Smart India. More

Five of the World’s Largest Solar Parks to Come Up in India

Five of the world’s largest under-construction solar parks are located in India, as reported by the United States-based Institute for Energy Economics and Financial Analysis (IEEFA). The report also discusses the role of solar energy in driving the rapid cost deflation of electricity markets, and a global shift in storage, wind, hydroelectricity, and energy efficiency. More

Toll, Operate and Transfer - Highways deal a good start

A consortium led by Macquarie, an Australia-based capital fund manager, has bagged the tolling, operation and maintenance rights for a bundle of nine stretches of national highway, all completed and in operation, on a public-private partnership (PPP) basis. This is the first time the government of India through the National Highways Authority of India (NHAI) has auctioned projects which are completed and in operation under the toll, operate and transfer (TOT) model to monetize assets. More

Rural infrastructure gets a booster shot! India, World Bank sign $500 mn loan pact for roads

India signed a USD 500 million (Rs 3,371 crore) loan pact with World Bank today to provide additional financing for PMGSY rural road projects. The loan has a 3-year grace period, and a maturity of 10 years, the finance Ministry said in a release. It will provide additional financing for the Pradhan Mantri Gram Sadak Yojana (PMGSY) Rural Roads Project “which will build 7,000 km of climate resilient roads, out of which 3,500 km will be constructed using green technologies”, the release said. More

This Indian airport is the world's first fully solar powered airport.

The Cochin International Airport in Kerala is setting example for the rest of the world by contributing towards the environment. It is the first ever fully solar powered airport with an inauguration dedicated solar plant. More

Airlines vs Indian Railways: India inks a first, more passengers flew in planes than took to AC trains, says govt

According to the report, the Aviation Ministry has targeted a five-fold increase in passenger trips to one billion per annum in 15-20 years. The aviation sector will reportedly see the addition of 1,000 aircraft in the Indian skies in the coming decade from about 550 aircraft today. More

Cabinet approves National Biofuel Policy

New Delhi: The Union cabinet chaired by Prime Minister Narendra Modi today approved the National Policy on Biofuels which allows blending of ethanol produced from damaged foodgrains, rotten potatoes, corn and sugar beet with petrol to cut oil imports by Rs 4,000 crore this year alone. More

Indian Railways, French firm tie up for high-speed rail corridors development

Indian  Railways has signed Memorandums of Understanding ( MoUs ) with French government-run company SNCF  Mobilites  for technical cooperation in the areas of high-speed rail corridors, raising of speed on existing routes, development of world-class stations, heavy haul operations and modernisation of rail infrastructure, etc. More

Govt to set up 20 steel scrap yards; Vehicle scrapping policy likely in Oct

The Ministry of Road Transport and Highways (MoRTH) is likely to announce a vehicle scrapping policy on the end of life of commercial vehicles on October 2. After this, the Union Ministry of Steel will set up 20 scrapping centres in various parts of the country to produce steel from the scrap. More

 
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Previous Issues:
May 2018
January 2018
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April Part I 2017
April Part II 2017
March 2017
December 2016
November 2016
October 2016
September 2016
August 2016
April 2016
March 2016
February 2016

A ROADMAP TO SPORTS INFRASTRUCTURE

Over the last decade there has been a spurt in the development of sports infrastructure and facilities in India. With the increase of capital investments and successful hosting of events such as the Commonwealth Games-2010, ICC World Cup-2011, the Indian Premier League, the F1 Indian Grand Prix in 2011, the Under 17 FIFA World Cup-2017, and the Indian Badminton and Soccer League, there are enormous commercially exploitable opportunities present in the Indian sports industry. However, the regulation of the Indian sports industry is highly decentralized and fragmented.

REGULATION OF THE SECTOR

There is no national or state legislation for regulation of sports in India. The Ministry of Youth Affairs & Sports (“MYAS”) was set up by the Government of India to create the infrastructure and promote capacity building for broad-basing sports as well as for achieving excellence in various competitive events at national and international levels. The National Sports Policy of 2001 was formulated to undertake the development and promotion of various sports prevalent in India. Sports promotion is primarily the responsibility of the various National Sports Federations (“NSFs”) which are autonomous in nature. The MYAS issues notifications and guidelines from time to time to regulate the NSFs.

The Ministry of Finance vide its Gazette Notification dated September 9, 2016 has included sports infrastructure under the harmonized master list of infrastructure subsectors and it includes the provision of sports stadia and infrastructure for academies, and/or for training / research in sports and sports-related activities. This inclusion will afford all the privileges enjoyed by the private players in the infrastructure sector and will attract them to the sports industry.

SPORTS INFRASTRUCTURE IN INDIA

Sports is primarily a State subject under the Constitution of India, and a huge portion of the sports infrastructure is owned and managed by State Governments. Sports Authority of India (“SAI”) builds and maintains stadia on behalf of the MYAS (infrastructure owned and managed by the Central Government). 

The Central Government through its ‘Khelo India’ initiative, has allowed grants for certain infrastructure projects and sports facilities creation at the state/union territories/district/sub-district level. State Governments and other local authorities may seek the benefit of these grants. However, the beneficiary of such a grant has to enter into a Memorandum of understanding (“MoU”) with SAI in order to provide the latter access, for a minimum of ten years, to the facilities on a timesharing basis for training of the trainees of SAI and holding competitions. This year the Central Government has allocated INR 575 crores to promote the Khelo India scheme in the Union Budget of 2018. However, the utilization of the sum for development of sports infrastructure will be limited to the strict guidelines under the scheme.

ROLE OF THE PRIVATE SECTOR IN SPORTS INFRASTRUCTURE

The concept of private participation in sports though novel is not alien to the Indian sports arena. The SAI has executed a MoU with different types of stakeholders to develop training centres/high performance centres in India. Private sector involvement in sports infrastructure development is through public-private partnerships (“PPP”), lease and leasebacks, MoUs with various sport bodies, upgradation of existing sports infrastructure via private sector investment, and renovate, modernize and operate (“RMO”) structure.

Public Private Partnership

Successful PPPs are a key enabler of sports development. PPPs can be explored for creating infrastructure through build-operate-transfer (“BOT”) or RMO models, by contracting construction companies specialising in building multi-purpose centres or allowing professional private sector entities to manage and control the existing State/Central Government sports infrastructure. The objective of taking such a route is to build commercial models and convert the same into revenue centres. Higher asset utilisation and revenue generation could in turn incentivise sports infrastructure creation. PPP for sports development in India is limited owing to a lack of standardised guidelines and incentives for States to integrate PPP into their sports policies – resulting in funding constraints.

While some states like Gujarat and Rajasthan do have a defined role of PPP in their sports policy, a majority of Indian states are yet to include PPPs into their internal policy. One successful implementation of the PPP model in India is the construction of the sports city in Naya Raipur by the Naya Raipur Development Authority, which contains facilities such as lawn tennis, aquatics and an indoor stadium.

Pro-active role of States in promoting PPP as a viable route for sports infrastructure development

As stated, Gujarat and Rajasthan have already delineated the role of PPP in their sports policy while some other States like Madhya Pradesh have commenced with the development of sports cities via the PPP mode. Some States have taken initiative to incorporate the PPP model in their policy portfolio:

  • The Government of Rajasthan in its Integrated Stadium (Sports Infrastructure) Development Programme, 2015 has provided that the role of the private sector will be delineated to creating infrastructure facilities on Government land. These facilities will be owned by the Government and the private sector will operate and manage the facilities. The private sector will be allowed to recover fees for a fixed period. Sports infrastructure facilities like indoor stadiums, hockey, football stadiums, sports academies, etc. will be upgraded, operated and managed by private sector.

  • The Gujarat Sports Policy of 2016 envisions a broader role for the private sector. It outlines how a PPP model can offer an excellent solution for motivating the private sector to offer innovative models for sports development whether it is by way of building infrastructure, talent identification and nurturing, organising competitions, bringing in world class technological solutions, and management practices. The policy proposes a joint venture where the Government will contribute the land and/or provide initial contribution, while the private sector will raise resources, create a suitable plan and implement the projects on BOT basis and will also conduct management. The policy also states that the applicability of Gujarat Infrastructure Development Act, 1999 can be extended to the sports industry as well.

  • The Karnataka Government in its sports policy of 2018 has specifically stated that a scheme shall be framed for accommodating the PPP structure in the sports industry. The framework evolved will focus on promoting, inter alia, PPP for upgrading, building and maintenance of infrastructure. Revenue sharing model or any other self-sustainable model in a transparent manner will be adopted to achieve this objective.  

  • Haryana, in its sports policy of 2015 has also acknowledged that the PPP model can be used to mobilize additional resources for development and maintenance of sporting infrastructure as approved by State Government.

  • NITI Aayog’s Action Plan for revitalising sports in India highlights the importance of encouraging PPP in sports. It stipulates ways in which the private sector could be encouraged to invest in the construction/upgradation of sports infrastructure and facilities.

  • Andhra Pradesh is the host for the national games for 2018-19, and in preparation of the same, the State Government has enhanced the budget for development of sports infrastructure. The objective of using the PPP model for sports infrastructure development stems from the flexibility it offers. It allows the Government to focus entirely on recruiting top physical education trainers and coaches to train youth in different sports activities while the private players focus on the revenue aspect. Under the State Government’s PPP initiative, private players would be allowed to open the facilities for the citizens on payment of fees and the stadium can be used throughout the year.

KEY ISSUES PLAGUING THE SPORTS INFRASTRUCTURE INDUSTRY

Sports development in India is often hampered by bureaucracy and politics because of the low level of private sector involvement. Many federations are highly dependent on Government funding for carrying out their key objectives, such as organising championships, procuring equipment, and training sportspersons; a model which increases the probability of breeding inefficiencies.  Further, lack of accountability of sports federations, and the restrictive and non-competitive guidelines of the Khelo India programme are other factors hampering the participation of private players in the development of sports infrastructure. There is also a lack of clear guidelines on asset utilisation and monetisation.

MITIGATION MEASURES

In addition to the Khelo India scheme, the Central Government should look forward to adopting the following measures to foster or boost private participation in sports infrastructure:

  • Developing standardised guidelines for asset utilisation and role of PPP in sports facility creation/management to incorporate sports policies across all States.  

  • Asset planning, development of multi-purpose stadia and innovative revenue streams are common methods for determining high future revenue generating potential of infrastructure and return on investment. In addition, stadium developers are looking at technology to create experiences that ensure that the fans keep coming back.

  • To arrange dedicated land bank for the setting up of sports infrastructure.

  • To introduce various commercial aspects, such as selling the naming rights, hospitality packages and branding inside the stadia, to make these facilities financially sustainable.

  • To adopt PPP model in which the Government will provide institutional and financial support for the building of infrastructure and the private sector will manage and maintain its operations.

  • Further, the Central Government should provide standard guidelines for the role of PPPs in sports infrastructure creation for States to adopt and could also design the criteria for allotment of national games on the basis of the extent of the integration of PPPs.

  • Government involvement can ensure that funds for sports infrastructure development can be borrowed at a lower rate of interest.

 
 
 
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