Delays in settling on the contractor group have imperiled hopes of building HSR service between Rio de Janeiro and São Paulo in time for the Summer Olympic Games in Rio.
China, India and Brazil continue moving ahead with ambitious infrastructure projects despite occasional challenges.
China’s recent accomplishments have been staggering—46,000 miles of expressways, the world’s most extensive high-speed rail (HSR) system, futuristic airport terminals, booming new port facilities, extensive urban subway systems and massive hydroelectric dams—and all built within the past 20 years.
Estimates suggest a major stimulus kick from government coffers since 2009 amounted to spending 15% of gross domestic product (GDP) on public works–related projects (compared to less than 2.5% in total US expenditures), which helped cushion effects from the global recession.
However, the early acclaim has given way to more mixed reviews, and the country shows signs of needing to rein in its voracious appetite to transform in the face of possible fiscal fatigue.
- Rail. Until a July 2011 bullet-train collision killed 40 passengers, most of the new HSR projects had earned high marks for state-of-the-art efficiency and speeds routinely reaching 200 miles per hour. After a reassessment and new policies to restrain spending, the 2012 rail budget has been slashed 42%.
- Roads. Budget constraints also reportedly caused work stoppages on road construction across the country in the fall of 2011. Early last year, the Ministry of Transport announced that work on 12 major national highways, nearly the length of the US interstate system, had been finished 13 years ahead of schedule. The remaining 6,000 miles of roads are planned for completion by 2020, a still manageable target.
- Water. Two-thirds of China’s cities lack sufficient water, and tap water in most parts of the country remains nonpotable. The country’s most high-profile infrastructure project, the US$23 billion Three Gorges dam, continues to be mired in controversy. Observers wonder whether emphasizing conservation and discouraging further population and industrial growth in more arid zones is a better strategy.
From new ports and airports to subways, freight rail, power generation and tolled highways, India attempts to modernize, accessing private capital to further ambitious and necessary goals.
Among headlined projects underway are a US$2.5 billion expansion of the Mumbai subways, construction of a US$3.6 billion Hyderabad Metro Rail system, a US$500 million highway upgrade between Jammu and Udhampur and a US$173 million toll-road expansion from Ahmedabad to Godhra. Six new dedicated freight-rail corridors are also under construction with a phase one cost of US$10 billion.
Despite devoting 8% of GDP to these and many other “desperately needed” infrastructure improvements, India suffers from a massive and widening supply/demand gap with “a lot of catching up to do.”
- Population pressures. Population growth, meanwhile, advances unchecked: India will vault ahead of China by 2025 to rank as the world’s most populous nation. And the country’s urbanization hurtles forward. Already overcrowded cities—including New Delhi, Mumbai, and Bangalore—have added 90 million people since 2001, with an another 200 million urban dwellers expected by 2030.
- Private capital and labor challenges. India leads the emerging BRIC (Brazil, Russia, India and China) countries in attempts to attract private investment to its infrastructure sectors. In 2010 alone, the country entered into US$75 billion of infrastructure related public-private partnerships (PPPs). Although foreign investors and operators have made money, the market can be difficult to navigate; even domestic players complain about failed policy frameworks and bureaucratic roadblocks.
- A Race against time. Essentially, India finds itself in a race against time, coping with the exigencies of its exploding and mostly impoverished population, while trying to reformulate as a 21st-century economic power. By some estimates the country’s growth rate could be 2% higher with improved infrastructure.
South America’s emerging market superstar, Brazil struggles to make long-neglected infrastructure improvements, many slated for welcoming hundreds of thousands of offshore visitors to the 2014 World Cup and 2016 Summer Olympics.
In addition, corruption and favoritism create an uneven playing field, and red tape complicates the procurement process for major projects.
- HRS setback. Probably the most disconcerting setback involves the country’s highest-profile transportation venture, a proposed US$19 billion high-speed railway linking Brazil’s two most important cities—Rio de Janeiro and São Paulo. Delays in settling on the contractor group have imperiled hopes of building HSR service between the cities in time for the Summer Games in Rio.
- Hosting global sports events. Tens of billions of dollars, meanwhile, pour into developing sports facilities and regional transportation links to host the World Cup, taking place in 12 Brazilian cities, as well as the follow-on Olympics. The budgeted price tag for all the improvements totals more than US$50 billion. Projects include subway extensions, bus rapid-transit routes, new highways, port upgrades and airport expansions. All will be needed to move athletes and throngs of sports mad tourists.
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