The 2024 procurement outlook presents a mixed bag of challenges and opportunities for CEOs of infrastructure project developers in India. While the current economic downturn has instilled a sense of caution, 2024 holds promise. India is planning to invest nearly Rs 143 lakh crore in infrastructure over seven years through 2030 – a substantial increase from the Rs 67 lakh crore in the preceding period. That said, CEOs should focus on four major key areas to optimize their supply chains and to drive growth and innovation in their projects in 2024.
4 Sectors CEOs of Infrastructure Project Developers in India Should Watch Out in 2024
Roads and Highways
The Union Budget 2023-24 has allocated an enhanced outlay of ₹1.62 lakh crore to the National Highways Authority of India (NHAI) as part of MoRTH’s capital expenditure plan for the current fiscal year. The budget also marked a notable hike in capital expenditure of NHAI projects with an additional allocation of INR 70,000 crores. Looking at this level of commitment, CEOs must expect even greater momentum in 2024 from the Government of India in the upcoming union budget. As the government is planning for faster completion of projects in 2024, you can expect faster approval of procurement to facilitate smoother transportation and logistics across the country.
Power T&D
India’s transmission and distribution (T&D) segment is also trying to achieve notable progress in grid physical structure expansion and technological advancements. Under the Green Energy Corridors (GECs) program initiated in 2015, India is aspiring to lay out 9700 KM of interstate T&D lines with 22,600 MVA of substation capacity by 2024. Nearly INR 500 crores are anticipated to be invested in T&D lines for 22,000 MVA capacity to upgrade the existing power transmission network.
Renewable Energy Generation
Green energy is one of the major areas of focus under the Amrit Kaal scheme for the next 25 years. A whooping ₹35,000 crore has been sanctioned for “priority capital investment” to push green hydrogen promotion through building renewable energy projects of 4,000 MW hours capacity. The budget for solar power has been raised to ₹4,970 crore, up from ₹3,469, to build solar grids worth 10,000 MW capacity. Additionally,₹19500 crores program to boost the National Green Hydrogen Mission is also on the cards. The aim is to increase the total renewable energy capacity by four times by 2030.
Ports
Ports carry 90% of international trade by volume. That’s why the GOI has set an ambitious target of meeting a $1000 billion export target for FY 2025-2026. 225 projects of ₹2.17 lakh of revenue capex are already in the implementation stage, and there will be a greater focus on single window clearance under PM Gati Shakti in 2024. For CEOs of infrastructure project developers, this represents a massive opportunity for bidding and involvement in diverse projects to generate revenue and develop strategic partnerships.
How CEOs of Infrastructure Project Developers Should Gear Up Their Supply Chain in 2024?
In 2024, CEOs of Infrastructure Project Developers should focus on the agile completion of projects in the PM Gati Shakti‘s Harmonized Master List (HML) by establishing a working capital green channel for swift OPEX purchases. Prioritizing the upgrade of legacy IT assets, like ERP, is crucial for digital procurement transformation. Additionally, adopting a site aggregation model based on vendor consolidation for construction material procurement will enhance efficiency. Implementing an end-to-end analytics dashboard for weekly progress reviews of HML projects will further streamline operations and ensure timely project completion. Visit Moglix’s infrastructure management solutions to learn more about procurement of TMT steel bar, crash barriers, bitumen and more.
