7 May 2012 Update India Infrastructure JNPT, NHAI project awards a potential silver lining for FY13 ‘We met the top officials at JNPT (lawaharlal Nehru Port Trust) and NHAI (National Highway Authority of india). Key takeaways: A] _JNPT expansion + DFC: An integrated development, with meaningful multiplier effect = 4" container terminal (CT) with capacity of 4.8m TEU is (equal to current JNPT) awarded to Port Authority of Singapore. Phase 1 (2.4m TEUs) likely by 2015. Cost is INR6Ob and many of the project awards will happen in FY13. + Terminal 4 operations are linked to DFCC project. Work on Phase 1 of DECC (up to Vadodara) has started, but linking to JNPT (Phase 2) was delayed due to land acquisition, Even Phase 1 commissioning would decongest existing line and enhance capacity by"35%. DFCC project award is expected to happen simultaneously. + INPT volumes are stagnant at “Sm tons/month as itis operating at peak capacity (100%+). This is beneficial to other ports on West coast (Kandla, Hazira, Mundra, etc). We believe Mundra Port & SEZ offers a play on the medium term congestion at JNPT. + _ JNPT is incurring INR16b on dredging (to increase draft from 11m to 14m), while award/work on CT4 would begin soon. Order award activity from DECC, DMIC would help incumbents. + Regulated tariff by TAMP (Tariff Authority for Major Ports), concurrent minor port development, poor/old infrastructure of major ports (draft, which is low for most ports) are key hindrances to PPP model. TAMP return framework is not incentivizing efficiency (16% RoCE), and is also proneto several changes. Policy framework certainty most important for expansion projects at major ports. B]_NHAI: Road project awards worth INR680b in FY13 a silver lining amidst gloom in order intake for engineering/construction sector = NHAI project awards worth “INR68Ob are targeted in FY13, in line with FYL2 (rin 700b). * Out of total NHDP award of 8,800km, 6,000km would be awarded through BOT; balance through EPC. = NHAI favorably placed on funding; concessionaires funding for both equity & debt is a concern. = FYL2NHAI revenue comprised of fuel cess INR92b, toll collection “INR3Ob, and premium income of INR3Ob. = Land acquisition is difficult in certain states like Goa and Kerala; NHA is still maintaining the threshold of acquiring 70-80% land before award.MorILat Oswat India Infrastructure = Bankers have become risk averse and are not approving 100% non-recourse financing. = Given the aggressive bidding scenario and players running out of cash, consolidation in the construction industry could start setting i 7 May 2012 2MorILat Oswat India Infrastructure Disclosures ‘septs peel intmater ote aetze recpetan ees eacanstue» Be ny hvsten gore ke Ju TR eee repos tetcesiu a fe, in venenatis erin esten an Met Os eure Line tea eee as MOSS) ets an ace ase ups Ths paint publ date nanasben amenee» yu sei our mon ene nt wp ndce ore enbote ny ser pre ny umunorae achsue, use, dsemian oop (be atl oar of oma, pene Te pesen accessing Ns rat petal ages w wampt Oster any of fine enpoyes oa an at eensbEg abi gm seh muse nd agrees AC Rk MOSKer an fies ot enpeesespnsbe ay seh ise ane Amer gees ‘no uostarany ois ines rep ees ea hmesstm a 5e5, c8, amages, penes Bata} be suferedby e peISRRcessng Ms aon Ae 97 4S. ‘Te inmaton conte ees on uy bd ser sees eevee eal, Wi we wees upeie Rehman etn on eaconabe Das, MOStanan I ats ave nero ongaenw upene be hme, Ase Dew may De gD, compe, eDAFasnS Bat Ma Pee MOST NAA Sams fm dog 8 MOSK an ies er empoyes sateen any ay espesbie ae abe nya ema Rta ae an perses tom any adtermnener seman coined separ. 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