As we put this issue to bed, we are inundated with news about North India’s biggest blackout in a decade. While power outages are a common occurrence, this exposes our vulnerability like never before. An incident like this only confirms our feeling about more pain in the infrastructure space. Because now it’s not just government inaction, but the financial mess infrastructure companies are in, that will prevent rapid growth. Be it power or airports, road builders or civil contractors, most players have horrifying quantities of red ink on their balance sheet. And with the economy slowing and capex being withheld, companies in the infra business have no back-up plan.

If there was one infrastructure segment that held hope during the UPA-II regime, it was roads. There was regular bidding for projects, banks were happy to lend, and returns were “decent”. And then, simple economics came into play. As the infra segment, overall, faced a drying project pipeline, these “decent return” projects were invaded with a vengeance. Now, for new entrants especially, building roads is a bad business. Very few players are making the kind of money that they thought they would. Not only are many of those projects now on the block, new projects are finding fewer or no takers. This more or less sets the backdrop for a much-needed consolidation. The only hitch is that it will be long drawn, given that both seller and buyer would want a better deal for themselves. Read about which companies are better placed to weather the rough ride in our cover story Dead End.

In other stories, there is a feature on how Tata Power has cut distribution losses by engaging with people living in slums in New Delhi. In our markets section, we have a feature on ONGC, whose recent financial performance camouflages its chronic problems, which is its poor track record in discoveries and perennial government interference.