A report from professional services firm PwC says lack of investment in transport infrastructure has been “inhibiting” growth in countries like India and Indonesia, but the outlook looks bullish with new governments in place in these countries.
“While global transport infrastructure investment predicted to reach unprecedented levels, in some growth countries like Indonesia and India, there is the lack of transport infrastructure investment,” says the report.
“In some growth countries like Indonesia and India, the lack of transport infrastructure investment has been inhibiting growth. However, there are some signs of change with new governments in those countries,” PwC said in a research note.
New Governments in India and Indonesia are dealing with issues around infrastructure development with increased focus, the report said.
“The outlook for the sector, in line with several sections of the economy, is now beginning to look positive. The optimism in the sector is largely driven by the government’s initiatives to kickstart the construction cycle by increasing public sector spending,” PwC India leader - Infrastructure Manish Agarwal said.
Agarwal noted that in order to sustain the momentum, rise in private investments is needed and initiatives such as rebalancing risks in PPP structures, reforming the regulatory environment and easing dispute resolutions, can make the investment cycle self-sustaining.
“Given the emerging opportunities globally and in India, companies here will need to scale up and build their capabilities in order to compete in global arena,” he added.
Earlier this year, the Government unveiled plans for projects worth `10 trillions for developing the road and shipping sector. The amount will be spent over a period of five years.