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6.4 India's Industrial Infrastructure

Before explaining the details of the Neemrana Industrial Park, below is a quick overview of the infrastructure necessary for setting up manufacturing sites in India. First are roadways, which are one method for overland transport. Most national highways, including National Highway 8 connecting Delhi and Mumbai, are twolane drives, on which trucks, motorcycles, auto rickshaws, bicycles, livestock, and pedestrians commute. Accordingly, traffic is often congested and high-speed transport is impossible.

India ranks fourth in the world in terms of railway length, with a total of 633,332 km. However, only 28 % of these are electricity operated and only 25 % are double-tracked. Freight cars travel at a speed of only 23 km/h and although travel fares are low, freight shipments are expensive. Thus, it is cheaper to transport goods by truck.

The Indian federal government manages 12 main ports: Kandla, Mumbai, Jawaharlal Nehru, Mormugao, New Mangalore, Cochin, Tuticorin, Chennai, Ennore, Vishakhapatnam, Paradip, and Kolkata. These ports together handle 464 mn tons annually. Ports under the jurisdiction of state and local governments are termed as “non-major ports” (or “minor ports”). These ports handle a total of 160 mn tons annually. Northern India, which has no coastline, relies on container shipments from gateway ports in the western part of the country. India's western ports handle 69 % of all container freight.

Stable electric power supply is another requirement for an industrial park. In 2010, electric power demand in India was 8.5 mn gigawatt-hour (GWh), an increase of more than six percent over the last 5 years. Peak electricity demand is estimated to increase as high as 120 GW, driving overall demand far higher than the country's supply capacity of approximately one mn GWh. In addition, issues related to high transmission and distribution loss rates and theft of electric power decrease the electric power availability for those who need it, making power outages a frequent occurrence. One reason for this is the strain on power company fee schedules. Fee schedules are constrained by low (or free) rates for farmers, which are offset by industries paying relatively higher fees, resulting in a cross subsidy of sorts. Companies pay high power bills to run their factories, and work with the frequent power outages and shortages. It is therefore common for large-scale factories to have in-house power generation.

Due to low groundwater levels and water contamination, water shortages are common in Northern India. In an attempt to limit the overuse of groundwater and promote its restoration, the Indian government has asked all states to enact rainwater harvesting laws (regulations that mandate the return of water to nearby regions if groundwater usage in that region is in excess of rainwater in the region). Regions around Delhi have plans for constructing water desalination plants; however, there are as yet no prospects for solving water shortages.

 
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