Arvind's Newsletter

1.As a person who has lived and worked in Mumbai for nearly 40 years, I have been supporter of the Mumbai Trans Harbour Link project which has been on anvil for more than 20 years. After many unsuccessful attempts to structure the project as a PPP in 2013/14 the Government of Maharashtra, after it received an Expression of Interest from Japan International Cooperation Agency (JICA) to provide funds for the project, decide to switch to EPC mode.
Now we learn that India’s largest sea bridge, 22 km long, is nearly complete. The bridge, after it opens, will reduce travel time between Mumbai and Pune and Goa.

The construction work on the project worth ₹18,000 crores started in 2018. Around 93% of the construction work has been completed at the Mumbai Trans Harbour link site, according to a report published by The Times Of India.

The MTHL project will link south Mumbai with Navi Mumbai township. The MMRDA, a Maharashtra government agency, is the implementing authority for the 21.8 km six-lane MTHL project, financed by the Japan International Cooperation Agency. When completed, it would be the longest sea bridge in India and would cater to 70,000 vehicles daily

Once the bridge opens for traffic, it will be possible to travel from Sewri in central Mumbai to Chirle in Navi Mumbai in 15-20 minutes. Also, vehicles won't have to stop on the bridge for paying toll thanks to the Open Tolling System.

2.FT research suggests “Transformational Change” in US Manufacturing as Biden’s industrial policy bears fruit. The research shows investment commitments of more than $200 bn to US manufacturing since IRA and Chips Act. Long Read. Excerpts from this report are as below

“The US appears poised for a manufacturing boom as companies tap into Biden administration subsidies with pledges to spend tens of billions of dollars on new projects, according to Financial Times research. The Chips Act and the Inflation Reduction Act, passed within days of each other last August, together include more than $400bn in tax credits, grants and loans designed to foster a domestic semiconductor industry and clean-tech manufacturing base. The package was aimed at countering China’s dominance in strategic sectors such as electric vehicles and recapturing jobs from abroad.

The FT identified more than 75 large-scale manufacturing announcements in the US since the passage of these two industrial policies. Here is what we learned. Semiconductor and clean energy projects Companies have committed roughly $204bn in large-scale projects to boost US semiconductor and clean-tech production as of April 14, promising to create at least 82,000 jobs. While not all these projects were a direct result of the passage of these bills, they will probably be eligible for the tax credits. The amount is almost double the capital spending commitments made in the same sectors in 2021 and nearly 20 times the amount in 2019.

While the FT identified four projects worth at least $1bn each in the semiconductor and clean-technology sectors in 2019, we found 31 of that size after August 2022. Semiconductors, electric vehicles and batteries captured the bulk of investment. The FT identified 21 semiconductor-related investments and more than three dozen projects aimed at boosting the US electric vehicle supply chain. Taiwan Semiconductor Manufacturing Company’s $28bn expansion in Phoenix marks the largest investment to date, bringing the company’s total investment in its Arizona fabrication plants to $40bn, the biggest foreign direct investment project in US history

The FT looked at projects involving capital investment of at least $100mn since the Chips Act and IRA were passed. We included projects aimed at boosting manufacturing in the semiconductor, electric-vehicle, battery and clean-energy sectors. Our analysis was based on company and government announcements and drew on data from fDi Markets, Rystad Energy, Wavteq and the Semiconductor Industry Association. The IRA included $369bn worth of tax credits, grants and loans for clean-tech development, with bonus credits for projects paying prevailing wages or located in fossil-fuel communities. The credits can be accumulated, accounting for about 50 per cent of costs for some projects, say accountants. The Chips Act provides $39bn in funding for semiconductor manufacturing as well as $24bn worth of manufacturing tax credits. “The industrial policy that’s being put into place hasn’t been seen for generations,” said Scott Paul, president of the Alliance for American Manufacturing. “This is a generational, transformational change that we’re seeing in America and our productive capacity.

About a third of all investments announced since August involve a foreign investor, with nearly two dozen projects coming from companies headquartered in Japan, South Korea and Taiwan. This includes LG Energy Solution’s $5.5bn proposed project in Arizona, announced in March, the largest battery investment ever in the US. Analysts say these investments from the US’s Asian allies are also attempts to diversify away from dependence on China’s supply chains. “Their strategic calculations here are somewhat similar to the United States’, in that China is the largest economy in their region but it’s also an economy with which they have somewhat tense security relationships,” said Cullen Hendrix, a senior fellow at the Peterson Institute for International Economics. But Chinese investors are also vying for a stake in the US supply chain. While the Chips Act and the IRA have anti-China clauses, the US government is yet to rule on the extent to which Chinese companies can participate in building US facilities

Two other large deals announced since August, both in Michigan, are Ford’s $3.5bn battery plant using technology from CATL, China’s battery giant, and a $2.4bn battery plant being built by a subsidiary of China’s Gotion. Both Chinese companies have been accused by some Republicans of being fronts for the Chinese Communist party. Virginia governor Glenn Youngkin rejected a proposal for the Ford project to be based in his state, telling TV reporters that it was a “Trojan horse”. “There is no Communist plot,” said Chuck Thelen, North American vice-president of Gotion at a local town meeting. “The fact is we already live in a global industry, and to bring a Chinese manufacturing or a multinational manufacturing site into North America is the on-shoring that our past president really promoted.”

Of the spending commitments tracked by the FT, less than half — or about $80bn — disclosed the size of the subsidies they will receive from state and local authorities, on top of the credits available in the IRA and Chips Act. The total size of the subsidies for those that did disclose them amounted to $13.7bn. The largest disclosed incentive package was $5.5bn given to Micron for its $20bn semiconductor fab in Clay, New York, helping the state beat Texas to the project.

3.Lessons from military leadership: the importance of morale. What is morale, why does it matter and how can it be boosted. Read on

4.Global Microbiome Study Gives New View of Shared Health Risks

The most comprehensive survey of how we share our microbiomes suggests a new way of thinking about the risks of developing some diseases that aren’t usually considered contagious The findings, published in January in Nature, fill important gaps in our understanding of how people assemble their microbiomes and reformulate them throughout their lives. Long Read.

5.G7 ministers set new, faster targets for wind and solar power, but stopped short of agreeing to a 2030 phaseout for coal. The group committed to hundreds of gigawatts of new solar and wind power by 2030, and to “accelerate the phase out of unabated fossil fuels.” Japan, the G7’s host and which is now more reliant on coal since moving away from nuclear after the Fukushima incident, resisted the move, and reportedly insisted on the group remaining open to new investment in natural gas. Meanwhile, in Finland, Europe’s largest nuclear reactor finally came online yesterday (14 years late) soon after Germany shut its final three reactors down.