construction week a

7/27/2019 Construction Week A

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NEWS

MARCH 2013 CONSTRUCTION WEEK 11

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NEWS IN NUMBERS

According to CBREs latest report, Indian RetailMarket View H2, 2012, around 2.5 m. sq.ft. of freshretail space entered the market in 2012, mainlyconcentrated in Bengaluru, Kolkata and Pune, asagainst over 15 m sq.ft. in 2011. Most of the supplypipeline is scheduled for completion in 2013; bywhen the existing vacancy levels might reduce.

National Thermal PowerCorporation (NTPC) has tied

up a term loan facility of$250 million with State Bankof India, New York branchand Mizuho Corporate Bank,Limited, Singapore branch asarrangers and lenders. Theloan agreement will empowerNTPC to utilise the proceedsof the loan towards capitalexpenditure for procurement ofgoods and services for ongoingand new projects, renovationand modernisation of stations

of the corporation.

Ministry of new and renewableenergy has allotted 185 grid-

connected solar power plants of1,172 MW aggregate capacity underdifferent schemes during the lastthree years. Of these, 132 powerplants of about 369 MW aggregatecapacity have been commissioned upto January 31, 2013. These includeone solar thermal power plant ofcapacity 2.5 MW and 131 solar PVplants of 366 MW aggregate capacity.

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year, Coal India Ltd (CIL) hasregistered a growth of 8 per cent

in supply and 5.8 per cent in coalproduction over the correspondingperiod of the previous year. Duringthis period, 380 million tonnes ofcoal was supplied by CIL, whereaslast year it was 351 million tonnes.Similarly, coal production duringthe period increased to 355.31million tonnes from 335.89 milliontonnes of the corresponding period.

46.42MT

Coal production by CIL during

January 2013 as compared to 44.6

million tonnes in January 2012

1,172MWAggregate capacity

of solar power plants

alloted during the

last 3 years

83%Drop in prime retail

space supply in 2012

$250million


12/68

12 CONSTRUCTION WEEK MARCH 2013

NEWS

Construction of limitedheight subway

Location: Jabalpur

Closes: 11 March 2013

Client: West Central RailwayCategory: Civil Engineering

Fabrication & Erection ofpiping & structural work

Location: Rawatbhata Rajasthan


Client: NPC L

Category: Civil Works

Execution of Civil Zonal Workfor the period upto 30 June 2013

Location: Tamluk-Digha section

Closes: 22 April 2013

Client: South Eastern Railway


Drilling of Vertical Hole &Full Column Grouting

Location: Naheriya UG Mine


&OLHQW:HVWHUQ&RDOHOGV/LPLWHG

Category: Mining

Preparation of DetailedFeasibility report for VLGC

Location: New Mangalore Port


Client: New Mangalore Port Trust


Construction of Road Over

Bridge of span 1 24 00 mLocation: Omatipalli


Client: East Coast Railway


Construction of Four IsolationStoppings at Vishnupuri UG Mine

Location: Pench


&OLHQW:HVWHUQ&RDOHOGV/WG

Category: Mining

Construction of East Section0GDF8BUFS4VQQMZ

Location: NCL Dudhichua, UP

Closes: 10 April 2013&OLHQW1RUWKHUQ&RDOHOGV/LPLWHG


Construction of 220/33KVSub-station on Turnkey

Location: Noida


Client: NTPC Ltdy

Category: Work Contract

Construction of 11VentilationStoppings

Location: Mathani UG Mine,


&OLHQW:HVWHUQ&RDOHOGV/LPLWHG

Category: Mining

TOP TENDERS

ALSTOM BHARAT Forge Power has

secured an order worth over Rs2,251

crore in India. It will supply three units of

660 MW supercritical coal turbine islands

to Nabinagar Power Generating Co, a joint

venture between NTPC and Bihar State

Electricity Board in Nabinagar. Alstoms

share of the contract amounts to around

185 million.

SUPREME INFRASTRUCTURE hasQPTUFEBQFSDFOUSJTFJOOFUQSPU

for the quarter ended December 2012. TheDPNQBOZnTOFUQSPUIBTJODSFBTFEUP3T

crore as compared to Rs25.01 crore for thecorresponding quarter of the previous year.

THE ROAD AND HIGHWAYS ministry

has taken up an ambitious special

accelerated road development programme

for providing connectivity to all the district

headquarters in the north eastern region

by minimum two-lane highway standards.

THE CABINET COMMITTEE on investmenthas cleared a proposal to setup North

Karanpura Super Thermal Power Plant

(NKSTPP) (3 x 660 MW) by NTPC in Jharkhand.The project would lead to generation of 1,980 MWof power. The committee also agreed to restorethe original coal linkage for the project. The coalsupply would be made available in the 13th Plan.

India Ratings has maintained an overall

negative outlook for Indian infrastructureprojects for 2013, considering project

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However, some sub-sectors have a split

outlook. It expects that a number of projects are

likely to default on their bank debt obligations.

ATKINS, which is into design, engineering

and project management, opened a new

design centre in Gurgaon. It has a capacity for

375 people, complementing the 1,000 engineersalready working in Atkins Bangalore centre,

which opened in 1998.

Essar Steel has launched a range of high-endbranded steel plates for the Indian infrastructure

TFDUPS&TTBSIBTTQFDJDBMMZDVTUPNJTFEUIFproducts to suit the industrial requirements for

sectors such as construction, oil and gas, power,

and ship building. This will reduce countrysdependence on imported plates.

Ravi Singh, senior vice president, EssarSteel said: We are the only Indian companywho are currently offering a bouquet of branded

steel plates for the multiple requirements ofindustry. All our branded steel products followSEL 1 standard which is the highest amongstEuropean Standards.

Essar Steel launchesbranded steel plates

MATERIALS

With R+T Asia, China is preparing to host itsbiggest event for roller shutters, doors/gatesand sun protection system in Shanghai onMarch 26-28, 2013.

Originally started in Germany as R+TStuttgart over 40 years back, R+T AsiaXBT STU JOUSPEVDFE JO $IJOB JO

In 2013, there will be more than 400 globalbrands and thousands of innovative technologies

coming to join R+T Asia. There will also beInternational Window and Door Summittaking place during the exhibition.

R+T Asia kicks off inChina this month

EVENT

NEWS IN BRIEF


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NEWS

Last month we looked at the

first of the three Ps of a

contract: Parties. Lets now

look at Price and three

issues that commonly arise in relation

to Price in a construction contract.

(1) A construction contract in essence

is no different from a contract to

deliver a fridge in that the contractors

entitlement to payment of the contract

price arises only after delivery. However,

because construction contracts are

lengthy, and the contractor havingto nance the materials and labour

during this lengthy period would be

a strain on a contractors nances,

construction contracts often provide

that the contractor will be paid at

regular intervals during the course

of construction rather than at the

end. But while this is common, a

contractor should not assume that it

is understood that the employer will

pay them monthly. Interim payments

have to be expressly provided for in the

construction contract. In the absence ofsuch a provision, the employer would be

entitled to ask for the entire product (the

completed building) before making any

payment, and the contractor would have

to comply.

(2) Contractors often believe that if

the prices of materials or labour go up

they should be compensated for it by the

employer. Sometimes this is a correct

assumption - for instance, where the

contract has a price uctuation clause.

But in the absence of that, the contractor

takes the risk of a rise in prices. This is

regardless of whether the contract is

a re-measurement contract where the

contractor is being paid based on rates,or a lump-sum contract where the price

is xed.9f course, the contractor also

takes the benet of a fall in prices but

such market movements are usually rare.

Contractors should therefore ask for a

price adjustment clause in any contract

that is expected to go on for a lengthy

period, but should be aware that these

clauses are usually drafted in a way that

also allows the employer to share in the

benet if prices fall.

(3) If you are constructing a project

in a foreign country but are incurringcosts not just in that foreign country but

also in a third country (for example, if

the equipment to be installed is being

bought in Europe for a project in the

Middle East), you are likely to face

issues with movements in currency

exchange rates. Contract prices are

often expressed in a single currency

and also paid in that currency. If your

currency of cost does not correspond

exactly with your currency of payment,

you should address the risk of currency

loss from a change in exchange rates

by either requiring the contract to split

the currencies in which you are paid,

or if that is too late, to take out hedgingcontracts to avoid a currency loss. It is

surprising how many Asian contractors

do not pay attention to this, maybe

because, historically, the US dollar has

always appreciated compared to their

currency of cost. But that is no longer

todays reality, and contractors need to

protect against this invisible loss.

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LEGAL EAGLE

APPOINTMENTS

Bangalore-based Mantri Developers has

announced the appointment of S BAASKARAN

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He would be responsible for strategising

OBODJBMQMBOTDBTIPXNBOBHFNFOUnew fund raising and driving the companys

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SUBHASIS CHATTERJEE has been named

as managing director for Eatons hydraulics

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BGR Energy Systems has inducted

SWARNAMUGI KARTIK as a whole-time

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whole time director and is designated as

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responsible for planning companys strategy

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he will lead the entire portfolio of energy

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Issues to keep in mind while drafting price clause


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COMMENT

RevolutionisingRY_]SXQXKXMO]OM^Y\

Housing forms one of the

three basic necessities of life.

It is not only an elementary

need, but also an aspect

that bears political, social and economic

signicance. 0or most indiìdualst access

to dwellings encompasses a huge nancial

commitment, often one that is the largest

inèstment that people maUe. Housing

also poses a challenge for most countries,

though the tasU is more pronounced in

emerging and underdeèloped nations

than in deèloped ones, where hea`ymigration to urban cities and creation of

informal settlements coupled with the

lacU of ade[uate housingnance solutions

has magnied the housing shortfall.

So while a huge demand for residential

units continues to exist, both the hous-

ingnance mechanisms and inèstment

in housing stocU ha e fallen well short of

meeting the housing needs of the masses,

especially those of the urban and rural

poor across the globe. The global econom-

ic crises in addition to nearly half of the

worldts population now inhabiting cities,has also drastically affected the ability of

low income households to access housing

nance and affordable housing.

This aspect has been characterised

by numerous countries, India included,

where housing deèlopment is highly

compartmentalised and extremely

focused at the top spectrum of luxury

housing, where àlue taUes precedence

oèr òlume.+s a conse[uence, the hous-

ingnance system has also encountered

numerous barriers in extendingnance

to lower income groups where there is

The housing finance system has encountered numerous barriers in

extending finance to lower income groups, says Sachin Sandhir

not only uncertainty of income, but also

of land title. ,arriers haè also existed at

thenancial institution leèl as a result of

insufcient capacity to introduce special-

ised housingnance products and access

to long-term funding.

To some extent eèn in India, liUe in

seèral marUets of+frica and the7iddle

/ast, poor and lower income groups haè

limited or no access to housingnance.

So while innoàti e and housing micro-

nance solutions haè found acceptance

and usage in deèloped and regulatedmarUets, these instruments are yet to

be effectièly applied in emerging and

underdeèloped economies.

The case for deèloping and imple-

menting micronance products for the

housing sector is eèn stronger, consid-

ering that in seèral countries where

micronance loans haè been extended

for business purposes, education, employ-

ment, agribusinesses etc., the capital has

been dièrted for meeting housing re-

[uirements. The potential of such nanc-

ing products are further substantiated by

the fact that these can proìde successiè

micro and small loans to indiìduals

families for housing improèments and

expansions, while enabling economically

weaUer and lower income groups to haè

nancial access specically for housing.

Ae ha e already seen an uptaUe in micro

nancing initiatiès where countries such

as-ambodia and India are deèloping and

implementing these products in response

to the huge housing shortfall and the

existent marUet demand within the lower

income groups. So while, major challengesin the form of a regulatory frameworU and

inherent risUs preàil, both the goèrn-

ment and priàte sector in these and se`-

eral other countries are looUing to address

these aspects through planned initiatiès.

+dditionally, oèr the past decade,

substantial progress has been made to

improè the functioning of housing mar-

Uets across nations, primarily through the

delièry of formal housingnance, which

helps channelize resources that support

housing demand and allows households

to purchase residential dwellings; whileat the same time facilitating better al-

location of resources between housing

and other essential goods and serìces, as

well as saìngs. To this end, international

experience suggests that there is a linU

between demand for housing, housing

nance,nancial sector deèlopment, and

economic growth.

wThis is the first part of a two-part

article on housing finance. The author

is managing director of RICS South

+sia. He can be contacted by email at

[email protected]

While a huge demandfor residential units continuesto exist, both the housingfinance mechanisms andinvestment in housing stockhave fallen well short ofmeeting the housing needsof the masses.


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COVER STORY


CONSTRUCTIVEVISIONARIES

Arvind Nanda, CEO& founder director,

Interarch

Hemant Kanoria,CMD, Srei

Infrastructure Finance

Anirudh Bhuwalka,MD and CEO, AMW

GRK Reddy, CMD,Marg Group

PEB

FINANCETRUCKS

INFRASTRUCTURE


19/68


We feature ten unique

entrepreneurs who dared to

think big and do something

new on their own. Their

success stories continue to

inspire many and shape the

future of the construction

and infrastructure industry

in India

BY SYED AMEEN KADER

Kishore Avarsekar,CMD,

Unity Infraprojects

Tushar Mehendale,MD, ElectroMech

Ranjeet More, exec VC,Universal Construction

Machinery

Vijay Agarwal, CMD,Action Construction

Equipment

VS Ravi, president& founder member,Faade Testing India

Abhisheck Lodha,MD, Lodha Group

EPC

CRANES

CONCRETE MACHINES

EQUIPMENT

FACADE

REAL ESTATE


20/68

COVER STORY


It takes more than just hard

work and dedication to

become an entrepreneur.

True entrepreneurs are those

who are willing to take risks that

other people wont dare to. We have

handpicked ten such entrepreneurs

from different segments of the

construction and infrastructure

industry, who have demonstrated

more than just that. These are the

people who have shown immense

level of courage to do something

on their own despite all odds.

Many of them quit well-paid jobsto pursue their entrepreneurial

journeys. They are the visionaries

who have been collectively

playing a very important role in

the growth of Indias construction

and infrastructure sector. Their

success stories are more appealing

than others because they all started

amidst lots of adversities and

challenges that existed in India for

many years. Those difculties made

them to think out of the box and do

something new which their peers

wouldn't think of.

Though each of them faced

different kinds of hurdles on their

way, one thing that is common

among all of them is their untiring

spirit. They have managed to

overcome all the odds, with their

tremendous courage and a sharp

business acumen.And they are not done yet. They

are relentlessly working to scale

new heights in their own respective

elds, and setting new targets for

themselves to achieve. Its this spirit

that is keeping the momentum going

for Indias construction industry.

GRK Reddy is someone who sees

opportunity in adversity. Son of a civil

engineer, Reddy had spent most of his

childhood at construction sites before

getting the job of an investment banker

in Delhi. Soon he realised that he was

not destined to be

a banker, but an

entrepreneur.The obvious

choice was

construction

business, due to

his background.

But to his dismay,

INFRA MARG GROUP

GRK REDDY,chairman and managing director

Destined to be inconstruction business

the real estate market went bust,

putting his rst residential project into

jeopardy. 6eft with no cash ow for the

project, Reddy took up a challenging

job: 20,000-sq. ft of property,

to be built in 110 days at. In

return, the contractor promised

him to release Rs1.5 crore

every week for the work. Onthe 110th day, Reddy too kept

his promise by delivering the

project on time. This made him win

another, and his rst infrastructure

(wind farm) project, from the same

contactor. By that time, he had also

Spent his childhood at construction sites with his civilengineer father, GRK Reddy today owns a Rs2,000-crore

infrastructure company, employing over 1,000 people."

completed his own residential project,

which gave him enough cash ow.

Reddy has come a long way since

then. Today, Marg Group is one of

the most diversified and

fastest growing infrastructure

companies in India. Right

from ports and urban

infrastructure to real estateand townships, Reddy has

spread his business across

wide spectrum of the industry. Today,

Marg has an enviable order book of

over Rs3,800 crore, with a workforce

of 1,000 plus people.

`3,830ORDER BOOKFOR FY12-13

Though each of them

faced different kinds of

hurdles on their way, one

thing that is common

among all of them is

their untiring spirit.

They have managed

to overcome all theodds with tremendous

courage and sharp

business acumen.


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COVER STORY


Abhisheck Lodha may not be afirst generation entrepreneurbut there are many firsts that he has

initiated for his company. Starting

his career with McKinsey

& Company as an advisor to

Fortune 500 companies on

business strategy, he soon

realised that he would rather

manage his own company.

After joining his fathers local real

estate business some eight years back,

he transformed Lodha Group into acorporate realty giant. Lodha has not

only brought a new perspective to Indias

real estate sector but also raised the

REAL ESTATE LODHA GROUP

EPC UNITY INFRAPROJECTS

ABHISHECK LODHA,managing director

KISHORE AVARSEKAR,chairman and managing director

Real sprinter

Te dreamchaser

standard by closing some of the biggest

realty deals in the recent past.

Under his leadership, Lodha Group

has dared to venture beyond the

conventional by launching a

series of new projects such as

the World One tower that, once

completed, will rival the best in

the world.

Within a span of few years,

Lodha has taken his company to new

levels of success.

One of the most notable achievements inLodhas career so far has been successfully

raising capital for numerous projects in

Mumbai. From Rs180 crore for Apollo

Construction Company, with just

Rs20,000. Avarsekar took off with small

projects and soon bagged major civil

contracts across Maharashtra.

Having carved a niche for

himself in civil construction,

he later moved on to real

estate, specialising inredevelopment. But, in the

late 1990s, the country's realty sector

touched a new low as property prices

hit rock bottom. Avarsekar was quick

to realise that diversication was the

way out for growth and ventured into

He used to advice Fortune 500 companies on businessstrategy. Today, Lodha Group is among the top real estatecompanies in India, employing around 3,000 employees.

Quitting his civil engineering job at Mumbai MunicipalCorporation, he started his own company to execute some of

the biggest construction projects across India.

Mills to more than

Rs5,000 crore

for a land

in Wadala,

Mumbai, he

managed to get

some big-ticket

projects going

by bringing in

the money; all

this when most

lenders had their

purses moretightly-

stringed

than ever.

infrastructure project development.

The year 2006 was a turning point

for Unity Infraprojects, when the

family-owned enterprise shed

its conservative approach

to restructure itself into

a professional setup and

widened its horizon.During the same year, the

company went public to mobilise

capital for its pan-India ventures. Unity

moved beyond Maharashtra and took

up many prestigious projects across 20

Indian states, Nepal and Bangladesh.

35 ml sq.ftUNDER

DEVELOPMENT

`20,000STARTED BUSINESS

WITH THIS MONEY

While working as a civil engineerfor Mumbai MunicipalCorporation (BMC),

Kishore Avarsekar

used to daydream

about owning

his company

that will executethose buildings

and road projects.

Eager to transform

his dream into

reality, he started

his own rm, Unity


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COVER STORY

At the age of 40, VS Ravi hadprofessionally almost accomplishedeverything as a COO of a well knownfaade company before he decided toquit his job one day to startsomething on his own. In00, he set up Indiasrstfaade testing company ata time when people hardlyknew about them. ButRavi felt the need to establish a faadeperformance test laboratory in India not

as a business unit but as an obligation toensure that faade structures are stableand safe for people to live in.

But the journey wasnt so easy for

FACADE FAADE TESTING INDIA

VS RAVI,president and founder member

ARVIND NANDA,DIJFGFYFDVUJWFPGDFSBOEGPVOEFSEJSFDUPS

A pioneer infaade testing

Beating all odds

him. >he rst question he used to faceoften was about his technical expertise,because no one at that time believed thatany Indian company can do this kind of

work. Initially, he interactedwith one of the biggest testlaboratories for a technical jointventure but realised that hiscompany will not have its ownidentity in the whole process.

He had to think out of the box to create aworld-class testing facility. With a high-

end sophisticated laboratorysomethingwhich never existed anywhere in theworldhe introduced endoscopy,thermal imaging and high denition

many of them had to shut shop. Theonly redeeming factor for him wasthat he was a young and ambitious guy,embodied with lots of self belief thathard work, ethics and honesty will payoff someday.

But it was an era when

most small-sized companiestried to form a joint venturewith foreign companies tosurvive because thats theway Indian economy was structured.In fact, his company, Interarch, alsohad a Dutch collaboration initially but

People questioned his technical expertise, because no oneat that time believed that any Indian company can do this. He iscredited for setting up Indias first faade testing company.

He was successful in overcoming pre-liberalisationchallenges to survive, and then grow to a new level, making

Interarch a formidable name in the PEB industry."

cameras to facade failure analysis forthe industry.

His vision now is to set a benchmark infacade engineering and facade testing atnational as wellas internationallevel. He'sworking ontaking hiscompany toa new level,by providing

learning,training andintroducing astate-of-the-artfacade library.

soon realised that it was not the mostappropriate way as they were always adispensable part of the joint venture.And thats what happened to him whenthe JV partner decided to part ways,

bringing years of his work tonaught. He realised that it is better

to build slowly, with hard workand effort, so that the fruits of hisefforts will remain his.

Today, Interach has a betterand more solid identity than mostmultinationals, executing projects thatrival the best in the world.

2005FOUNDED FIRST FACADE

TESTING COMPANY

5,000PROJECTSEXECUTED IN INDIA

PEB INTERARCH

Arvind Nanda started his companyin the pre-liberalisation era whenit was a nightmare to

run a business. Notonly did he faceregular internaldifculties relating

to production,stafng and

marketing, he alsohad to manage withexternal challenges

such as electricity,communication

and transport.The economiccondition wasso unfavourablefor smallstart-ups that


25/68


26/68

COVER STORY


Indias CE manufacturing capabilitywas never taken so seriously untilUniversal showed to the world that it

can very well produce equipment not

only for Indian

but also for the

international

market.

Founded by

his father

Rohidaas More

almost four

decades back,Universal started

by taking baby

steps through

supplying

CONCRETE MACHINES UNIVERSAL CONSTRUCTION MACHINERY

EQUIPMENTACTION CONSTRUCTION EQUIPMENT

RANJEET MORE, executive vice chairman

chairman and managing director

Home grownsolutions

oil lubricant pumps and gear boxes

to major industrial giants. In the mid

eighties, Universal proved its mettle by

creating a nitric acid pump to be used

in Indias combat weapon,

Prithvi missile.

Ranjeet More joined Uni-

versal in 1994 only to take it

to a new level by introducing

ve-year plans within the

organisation. He came up with clear-

cut goals for each four ve-year plans$

expanding product range and spread-ing across Maharashtra at 10 locations

(1995-2001); covering all India with 10

regional ofces (2001-200); commission-

salary. The strategy worked for him

as well as his customers, who started

buying more cranes and became hirers.

With his innovative market-building

strategy, he has not only created

new clients, but also retained

them throughout the years.

However, his journey wasnt sosmooth. His competitors went to

court accusing him of copyright

violations. He was barred from selling his

machines in certain markets for few years

before henally won the case. Today, he is

one of the leading players in the pick-n-

He introduced clear-cut five-year goals for hiscompany, and successfully achieved them to take UniversalConstruction Machinery to a next level.

ing of Rudrapur plant and going global

with strong presence in Middle East and

Africa (200-2011); and becoming a world

leader in concrete producing equipment

(2011-201).

He realised that its very

important to have a strong in-

ternational distribution network

to boost global sales. And thats

how the Universal-Tata Inter-

national joint venture happened in 2010

that provided him a bigger international

marketing opportunities. In the very rstyear of the JV, he managed to export ma-

chines worth Rs25 crore, and has now set

a target of achieving Rs100 crore by 2014.

carry crane segment with

substantial market share

in other construction and

material handling equipment

such as mobile cranes,

tower cranes and forklifts.

He continues to offer

indigenously-developed,customised solutions

at a competitive

price for Indian

customers.

`100 CREXPORT TARGET

FOR 2014

24%YEAR-ON-YEAR

GROWTH IN TURNOVER

An entrepreneur himself, VijayAgarwal mentored and transformedhundreds of his equipment buyers

into entrepreneurs. When he started

in 1995, most of his clients

were small-time individual

operators whom he

converted into ownersof hiring companies. He

explained to them a simple

math$ you buy a crane and earn Rs40,000

every month by giving it out on rent; you

pay back Rs30,000 as an installment to

bank and take home Rs10,000 as your

He transformed hundreds of his customers, who wereindividual operators, into entrepreneurs by encouraging

them to become owners of hiring companies.

Te market maker


27/68


28/68

COVER STORY


Hemant Kanoria represents oneof the most important segmentsin the infrastructure business cycle.He started his career by running two

defunct flour mills, which his father

gave him to revive. He worked hard

to turnaround those mills for eight

years before giving it up to unfriendly

government guidelines, and start

something new. Realising that there

will be huge growth in infrastructure,

Anirudh Bhuwalka came into this business whenhis uncle, Shashi Ruia, the owner of Essar Group,suggested him to manufacture trucks with special

specifications for him. Bhuwalka began working on it and,

within three years, produced the first AMW truck

from a shed in Hazira.

He realised that it takes out of box thinking to

get into a segment which is strongly dominated

by traditional automotive giants such asTata Motors and Ashok Leyland. An MBA

from Babson College, Massachusetts,

Bhuwalka outsourced and

integrated components from

around 190 suppliers to make

his trucks. But he realised

that its not so easy to become

successful in such a price

sensitive market. He relied on

localised components rather

than imports to keep his cost

low, focusing on design, driver

comfort and overall performanceto carve a niche in the market.

Tushar Mehendale was just 24-years-old when he tookthe reins of ElectroMech after sudden the demise of hisfather in the year 2000. A fresh graduate from a university

in US, Mehendale had no practical

experience in the crane business. At that

time, ElectroMech was a small Pune-

based company with a turnover of

just Rs3.5 crore and 70 employees. He

converted thischallenge into

an opportunity

by steadily

building up on

his reference

lists and

bagging blue-chip customers.

In just over a decade,

ElectroMech has spread its

wings across India, striking a

strategic partnership deal with a

leading crane manufacturer and

notching a turnover ofRs200 crore.

Stimulating India'sinfrastructure growth

Loaded withachievements Scaling newheights

Kanoria founded Srei with his younger

brother Sunil in 1989.

His company started with nancinginfrastructure equipment to contractors

and construction companies. But his

business received huge boost when India

opened up its economy in 1991, paving

way for private participation.

Today, Srei has grown from being

a small Calcutta-based firm to one of

the biggest infrastructure financers in

Under his leadership, Srei has grown from being a smallCalcutta-based firm to one of the biggest infrastructure financers."

`200 CRCURRENT TURNOVER

AGAINST RS3.5 CR IN 2000

TRUCKS AMW CRANES ELECTROMECH

managing director and DIJFGFYFDVUJWFPGDFS

managing director

FINANCE SREI INFRASTRUCTURE FINANCE

HEMANT KANORIA,chairman and managing director

the country, with

a customer

base of over30,000

and nearly

Rs33,500

crore of

consolidated

assets under its

management.


29/68


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PEB SPECIAL


0\YW^RO\]^L_SVNSXQSXVKÔ#]^Y^ROaY\VN]VK\QO]^]^\_M^_\O

Z\OOXQSXOO\ONL_SVNSXQ]SX3XNSKRKÒMYWOKVYXQaKc-YX]^\_M^SYXAOOU^KUO]KVYYUK ^RO\OK]YX]LORSXN^ROS\]_MMO]]

P\OOXQSXOO\ONL_SVNSXQ]]^K\ÔN

YXKVYaXYÔSX3XNSK>RO

KNYZ^SYXSX^ROOK\VcNKc]aK]

VYaN_O^YVKMUYPKaK\OXO]]

KWYXQ_]O\]KLY_^^ROKN`KX^KQO]YP

]_MR]^\_M^_\O] 2YaOÒ\^RO]ONKc]

XOK\Vc!ZO\MOX^YPKVV^ROSXN_]^\SKV

SXL_SVNSXQ]L_SV^SX3XNSKK\O P/,]

ROKZZVSMK^SYX

SX\O]SNOX^SKVKXNY^RO\]OM^Y\]RK]LOOX

VSWSÔN]YPK\L_^^RSXQ]K\OMRKXQSXQ

[_SÔPK]^

>RO]ONKc]OÒX\OKVO]^KÔNOÒVYZ-

O\]K\OVYYUSXQK^ P/,]^Y]ZOON_ZMYX-

]^\_M^SYXKXNMYWZVOÔ^ROS\Z\YTOM^]

YX^SWO>RO_]ORYaOÒ\S]VSWSÔN

^YVYa-\S]O]^\_M^_\O]L_XQKVYa]O^M

u>RO P/,WK\UO^S]]^\YXQVcK]]YMSKÔN

aS^RSXÒ]^WOX^]KXNQ\Ya^RSX^RO

SXN_]^\SKVKXNMYWWO\MSKV]OM^Y\]>RO

XOaZYÔX^SKVKZZVSMK^SYXK\OK]PY\ P/,

SX^ROXOb^POacOK\]aSVVSXMV_NOZYaO\

ZVKX^]^\_M^_\O]PKM^Y\cL_SVNSXQ]

MYWWO\MSKVL_SVNSXQ]YPMO]KXN\O^KSV


31/68


32/68

Although PEBs have been the preferred choice for industrial applications,

UIFZBSFOEJOHVTFJOSFTJEFOUJBMQSPKFDUTUPP

PEB SPECIAL


malls), warehouses, and metro sta-

tions, noted a senior research analyst

at Frost & Sullivan.

So what's aiding the growth of PEBs?

Increased awareness among consum-

ers, availability of good quality raw

materials, lowering of prices due

to increased competition and sheerconvenience, thanks to the speed of

construction offered, are all key factors

contributing to the rise in demand for

PEBs. There are other advantages too.

PEB structures usually cost lower

than conventional RCC structures

as they require less labour. The

structures are designed well in

advance, and hence, there is

no wastage of raw materials

as well. Also, PEBs do not

require a huge foundation,

and hence, save on a lot oftime, labour and materials.

In the long term, its easier to

maintain a PEB compared to a

conventional structure. Steel manu-

facturers are also offering high-grade

ASTM Grade 50 steel that is light

in weight and also recyclable. This

has made PEBs a highly durable and

environment-friendly option.

What will drive the demand in the

near future?

The government's target of developing

5.5 MMTSIZE OF STEEL

BUILDING MARKETIN INDIA


33/68


34/68

PEB SPECIAL


and lack of skilled manpower in the

country is a key challenge. There's also

the presence of alternative structures

i.e. steel and concrete, ever-changing

prices of raw materials, which will

directly impact the cost of PEBs in the

country. Raw material cost accountsfor nearly 60 per cent of the total proj-

ect cost for PEBs.

As manufacturers have no control

over the cost of raw materials (steel),

there is always the risk of PEBs becom-

ing more expensive. Also, most PEB

manufacturers try to sell PEBs as a

product rather than what it is a cus-

tomised solution. Faulty design tech-

niques can cause unnecessary wastage,

and even reduce the safety and durabil-

ity of the structure.

Increasing competition

Sensing the opportunity in the In-

dian market, many international PEB

companies are now trying to set their

feet here. Local PEB companies will

have to strive hard to stay competi-

tive and retain their market share. By

offering better quality solutions, not

just for industrial applications, but also

for commercial and real estate devel-

opments, they can increase the scope

of the market and ensure that there is

enough room for everyone.

ON A GROWTH PATHThe structural steel buildings market in

India was around 5.0 to 5.5 million MT

in 2011, of which, around 9.5-10 per

cent i.e. 5,37,176 MT accounted for

the PEB market in India. It is expectedthat the market in terms of volumes will

reach 9,00,000 MT by 2016, growing

at a CAGR of 11.1 percent.

(Source: Frost & Sullivan)

the power sector and adding 50,000

MW of power capacity in the 12th Five

Year Plan will act as a major boost for

the PEB sector.

Demand from the commercial sector

is also expected to be strong in the

coming years. As the sector is predict-

ed to grow from 7 billion square feet in

2010 to nearly 20.44 billion square feet

by 2030, there will be immense oppor-

tunities for PEBs.

The manufacturing sector has wit-

nessed some growth, coupled with an

increase in the l ogistics infrastructure.

The growth in manufacturing and pro-

duction will lead to a rise in demand

for warehouses, which would help

the PEB market. The government has

also announced the ambitious plans of

rolling out several metro projects inthe coming years, which will add to the

scope of PEBs.

With the focus currently shifting to

green construction and buildings,

many PEB manufacturers have devel-

oped products such as high-efficiency

windows, better insulation for roofs,

walls, ceilings and floors.

By using solar rooftop panels and

sky lights, PEB buildings can meet the

requirements of captive power and

also help in bringing down the carbon

emissions of the structure.

What can potentially slow down the

growth of PEBs?

There are quite a few things that can

affect the growth of PEBs. Rising costs


35/68


36/68

PEB SPECIAL


PEBs grow biggerNot only is the demand for PEBs picking up, the size of the structuresis also growing. The Renault-Nissan plant in Chennai, built by Kirby, is thelargest pre-engineered building in the world.

R

enault-Nissan

plant in Orag-

adam, Chennai,

Tamil Nadu, is

the worlds largest PEB,with a covered area of

3,00,000 sqm involving

over 20,000 MT of steel.

The main structure was

completed in a record

time of seven months

and two buildings were

handed over in full in

December 2009. The

structure has two rafters,

purlins, sag rods andbracing, all assembled

at ground and lifted as a

single lift. Trim & chassis

building is of size 220m

x 483m, consisting of 46

bays with process beams

carrying 120 kg/sqm

loading and mezzanine.


37/68


38/68

METRO RAIL INDIA SUMMIT 2013


CONCEPTUALISED & ORGANISED BY:

PLATINUM PARTNER

GOLD PARTNERS

SITE VISIT PARTNER

SILVER PARTNER

EXHIBITORS

BADGE & LANYARD PARTNER

BUSINESS DEVELOPMENT PARTNERS

MEDIA PARTNERS

KNOWLEDGE PARTNER

OFFICIALLY ENDORSED BY CHENNAI METRO RAIL LIMITED (CMRL)


39/68

It is a unique gathering.Such a large gatheringon this theme is rare. Ihave been attending suchconferences in various partsof the country and this isone of the largest gatherings

I have ever seen on thistheme, not just in numbersbut also in terms of quality.This showsthe increasingsignificance ofmetro projects."

Dr Sudhir Krishna, secretary,

ministry of urban development, GoI


The second annual Metro RailSummit held in Chennai

last month brought together

leading experts from

industry, which included the Secretary

of Ministry of Urban Development, Dr

Sudhir Krishna, key decision-makers

from Delhi, Hyderabad, Kochi, Gurgaon,

Bangalore, Ahmedabad, and Chennai

metro, along with leading solutions

providers, planning, designing, technical

and nancial experts to learn about

the challenges, discuss solutions and

facilitate knowledge sharing among allthe stakeholders.

With a number of metro projects

being planned in the country, there is

a dire need for the government and

metro professionals to come together

and discuss various issues to ensure

the success of these projects.

Pressing the need for such

knowledge sharing platforms for the

metro rail sector, Dr Sudhir Krishna

said that the summit was an excellent

way to bring together all the key

stakeholders and solve the challenges

Metro rail professionals from across the world came together at thesummit in Chennai last month to learn, discuss and share ideas

plaguing the sector. "It is a uniquegathering. Such a large gathering

on this theme is rare. I have been

attending such conferences in various

parts of the country and this is one of

the largest gather gatherings I have

ever seen on this theme, not just in

numbers but also in terms of quality.

This shows the increasing significance

of metro projects," he said.

The three day summit included a visit

to the Chennai metro rail construction

site along with a conference that

featured some power-packeddiscussions on project nance, alternate

sources of revenue, use of renewable

energy in metro projects and so on.

The summit also featured some

interesting new innovative technologies

and solutions available for metro

projects in rolling stock, signaling and

telecommunications, control centers,

security, lighting, and re safety.

Read on to know about the key discussions

that emerged during the summit and get

some glimpses of the site visit.

Like a rolling stock


40/68



One of the biggest challenges in India is

project nance. While there are a number

of models to fund infrastructure projects,

PPPs are being considered for many up-

coming metro projects across the country.

However, the experience with PPPs has

been a mixed one. The Mumbai metro and

Delhi Airport metro projects are excellent

examples of how things can go wrong,

especially when the construction gets

delayed and the costs shoot up.

The question is: is PPP the right model

for metro projects? Arent there better

options available? The panel discussion

moderated by J Ravikumar, CFO, L&T

Metro Hyderabad on day one of the summitbrought out some interesting views. Manish

Agarwal, executive director, infrastructure,

PriceWaterHouseCoopers started the dis-

cussion by saying, We should try to select

the best model suited for the project based

on its own cash ow prole and the risk

prole of the project rather than picking a

model and then force-tting it.v1lobally,

only about 12 per cent of the total 113 metro

projects are on PPP mode, the rest are all

public sector undertakings. S Krishnan,

secretary ofnance,1ovt of Tamil8adu,

concurs, We shouldnt be so rigid abouthaving only PPPs for metro projects." He

adds, What might work for one project

might not work for the other.vThe problem

perhaps lies in the primary reason why the

government is looking at PPPsynance.

It does not have adequate funds tonance

the upcoming metro projects and risks

increasing thescal decit further. Agarwal

explains, We shouldnt look at PPPs as

747 KMLENGTH OF METRO

NETWORK NEEDED

DURING THE 12TH FIVE

YEAR PLAN

a source ofnance but look at them as

a source of better management, quicker

implementation, etc.v

GOING HYBRID

8Kumar, chief general manager for

project nance at Chennai Metro Rail

suggests something better. The tried

and tested model is the hybrid

model i.e. the government

of India, participating state

government, with multilat-

eral funding arrangements.JICA has been quite instru-

mental in spearheading the

metro movement in India.

The Asian Development Bank

is also slowly making its entry.

However, the funding from agen-

cies such as ADB is not so easy to come.

Their due diligence takes too long,v scoffs

Ravikumar.

We should try to select the best funding

model suited for the project based on itsown cash flow profile and the risk profile ofthe project.Manish Agarwal, executive director, infrastructure, PWC

Coordinating with multiple agencies is aproblem. The ministry of railways wont listento the ministry of urban development.4,SJTIOBOTFDSFUBSZPGOBODF(PWUPG5BNJM/BEV

There is no shortage of funds with these

agencies, but there is a lack of proper

bankable models for investors. Also, the

extent to which each of these investors is

willing to fund is a question. Kumar ex-

plains, Everyones risk appetite is not so

good. Is metro their only priority? I believe

the debt route is still the way to go

forward. Of course, theres the

challenge ofnding a long

tenure loan with reason-

able interest rates.v

Ravikumar highlightedthat resource mobilisa-

tion under urban infra for

MRTS is a challenge in the

given political and economic

context. He asked the panellists,

What would be the best strategy

which will work? Can dedicated transport

funds work? What should be the strategy

for advocacy or acceptance in the face of

competitive funding requirements?

Krishnan believes that building a dedi-

cated transport fund is possible. However,

theres a huge mix of challenges. Takethe fare issue for example. If you take the

Chennai metro rail, its virtually parallel to

the suburban railway in certain segments.

On the suburban railway line, the fares

havent been revised for years, which are

as low as Rs 5 per ride. A city like Mumbai

would face similar challenges, when it

comes up. If you are talking about efcient

transportation and efcient movement

of people, we would need some mecha-

nism of pricing it at rate where you dont

promote one mode over the other due to

lower fare.vThe next thing, Krishna states,

PROJECT FINANCE

(L-R) CK Khaitan, jt secy; Dr Sudhir Krishna, secy, MoUD; SK Lohia, OSD, Urban Transport, MoUD, and K Rajaraman, MD, CM


41/68


42/68



is transit-oriented development, How

can you increase development in those

corridors and then how the government

can benet with an increase in land use

through single point transactions such as

stamp duty, registrations and so on. The

other thing that we must look at is the

tax-GDP ratio. In states like Tamil Nadu,

the ratios are already on the higher side

and hence higher rates of tax are a little

difcult to sustain.

We can however look at increasing the

property tax as it hasnt been adequately

tapped. We can also look at other sources

of taxation such as tax on petrol, diesel and

so on, suggests Krishna.

Krishnan suggests that we need to ad-

dress these issues in two parts$rst, take

care of construction risks by preparing the

project better and nishing the construc-tion and then look of take-out nancing

options, etc., through the pension fund

market around 3-4 years down the line for

low-cost, longer time nancing. The fun-

damentals are strong, the demands

there, we just have to get the

policy mix right, he asserts.

However, doing it is not

an easy task, with so many

agencies and stakeholders

involved, coordination is

always a challenge. We

know it for a fact becausebesides coordinating with

state agencies, sometimes the

ministry of railways wont listen to

the ministry of urban development. If we

are able to sort these issues and get the

policy coherence right, funding shouldnt

be a problem.Krishnan points out.

DEDICATED FUNDS

Ravikumar asked the panellists about the

institutional challenges and the develop-

ment of bond market, IIFCL and IDFs

in metronancing.+garwal stated thatlong term capital can be become available

through these sources. Some infrastructure

debt funds have also been set up, that are

looking for assets. +n operating metro

`1TNFUNDS NEEDED FOR

METRO RAIL PROJECTS

IN INDIA

The dedicated Urban Transport Fundis a wonderful concept. However, there isno accepted or clear formula to get therevenues for such a fund./,,VNBSDIJFGHFOFSBMNBOBHFSQSPKFDUOBODF$.3-

brought out the need for ?nied7etro

Transport+uthority ?7T+and?rban

Transport Fund ?TF,as envisaged in the

National Urban Transport Policy. Kumaragrees that U7T+ is indeed the need of

the hour. He however cautions about Ur-

ban Transport Fund UTF, The dedicat-

ed UTF is a wonderful concept. However,

there is no accepted or clear formula to get

the revenues for such a fund.Transit-ori-

ented development T9D in a Greeneld

environment is one thing, but doing it in

an already developed city like 7umbai or

Chennai is a huge challenge, he explains.

Implementing T9D itself is a huge chal-

lenge. For example, the government needs

tond out what should be the FSI or F+Rallowed to manage the development, with-

out burdening the civic infrastructure or

affecting the potential revenue from such

development, Kumar explains.

GROUND REALITY

Concluding the session, Ravikumar shared

his experience with the lenders and

government: From the date of signing

the concession agreement, the condition

was imposed on us to achievenancial

closure within 180 days. That took away

the chance of getting a World Bank loanat a much lower cost. Fortunately for us,

we were able to secure funds from PSU

banks and achieve nancial closure within

180 days." Thereafter, there was a delay

of nearly 15 months in procuring land by

the government, which made the SPV go

through the entire project again as the

banks werent willing to continue with

the previous one. "We had to get the RBI

to intervene and explain to the banks that

since we hadnt utilised any of the funds,

we should be allowed to go ahead with the

previous nancial closure," he concludes.

with a steady cashow is an excellent

asset for institutions like these. However,

this funding comes into picture when the

construction period risk, stabilisation, etc.,is taken care of. We still have the challenge

ofnding the initial capital for construc-

tion, which can perhaps come through

short term loans," he says. The fare box

revenue can take care of only about

25 per cent of the total cost even

in the best of cases. In worst

cases, where the metro is be-

ing laid in newer areas for

city development, it may be

as low as 10 per cent of the

capital cost. This makes it

important to have addi-tional revenue streams. This

is where the concept of an urban

transport fund becomes really impor-

tant,"+garwal asserts. There are several

international examples of tax incremental

nancing through various sources such as

betterment levy, development charges, etc.,

explains+garwal.

IIFCL is ready to give long tenure loans

at a coupon rate of 10.25 to 10.50 per cent,

but they do not want to assume the lead

position. They want the lead bank to offer

a handholding of 10 per cent after theinitial tenure is over. But PSU banks are

not willing to extend the tenure beyond

15 years due to their limitations and RBI

restrictions, stated Ravikumar. He also


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Besides the panel discussions, a num-

ber of interesting presentations were

made at the summit. Peter Johnson,

regional director for TUV Rheinland

made some interesting points on safety

in metro rail projects. He explained

how metro operators can benchmark

their safety levels against the best in

the world. There's a need to continu-

ously evaluate and assess safety stan-

dards and requirements, he asserts."

What might be viewed as acceptable

today, might be challenged in courts in

10, 20 or even 30 years' time.

The acceptance of a target less than

current Best Practice, requires careful

and thorough evaluation of future re-quirements," says Johnson. Regulatory

Authorities have insufficient resources

to undertake detailed assessment of

newly built metro projects, especially

with the number of proposed projects

being implemented in India.

Johnson also shared the Indepen-

dent Competent Person (ICP) concept.

"The ICP is the professional body to

provide apropriate assurance to the

regulators that the metro is safe for

network objectives," he explains.

FOCUS ON SAFETY

Rajiv Kumar, director, markets & seg-

ments at Eaton brought out the issue ofarc ash in metro projects. "Un-

derstanding and mitigating

or reducing, arc ash had-

ards is important when

you consider that ve to

10 arc ash explosions

occur in electrical equip-

ment every day in the

U.S.," said Kumar. Metro

projects are also prone to arc

ash accidents due to the high

power consumption involved. Kumar

What might be viewed as acceptabletoday, might be challenged in courts in 10, 20or even 30 years' time.Peter Johnson, regional director for TUV Rheinland

Understanding and mitigating or reducing,arc flash hazards is important in metro projects.Rajiv Kumar, director, markets & segments at Eaton

showcased some effective ways to

prevent arc ash related accidents. He

suggest that the simplest way to makinga facility safer is by ensuring

that equipment is labeled,

having the right minimum

approach boundaries

marked on the oor in

front of the gear and

restricting access to elec-

trical equipment to only

people who are qualied to

be around it.

Vivekanand, director of sales

at Barco showcased some innovative

cloud-based network visualisation solu-tions for metro projects at the summit.

He also shared a case study of Metro Rio,

that has 33 stations with two separate

lines, serving nearly half a million pas-

sengers every day. "High speed rail

networks, such as the metro, demand

high-precision information collection

and transmission," he says.

Benjamin Samuel, manager, build-

ing & construction sector, Kirloskar

Brothers highlighted the importance

of using energy-efcient and space-

saving products such as pumps in metroprojects. "Often we tend to overlook the

energy, operating and maintenance costs

of a pump which amounts to almost

95% of a pump life cycle cost. Any given

pump today loses efciency at 2 to 3 per

cent per annum; as years pass by a pump

consumes more and more energy for the

same amount of output," stated Samuel.

The three-day summit proved to be

an excellent platform for debating,

sharing knowledge, networking and

learning about new technologies avail-

able in the market.

1015YEARS NEEDED FOR

METRO RAIL

PROJECTS TO

GENERATE PROFITS

SAFETY & EFFICIENCY


47/68

The Metro Rail India Summit 2013 started with

a visit to the Chennai Metro construction site.

The officials of CMRL led all the delegates to two

different locations to give an on-ground account

of the project's progress. The delegates were

first given a guided tour of the Shenoy Nagar

site, which recently achieved a record tunnel

boring speed of over 53 metres in a single day.

More than 50 per cent of the total metro net-

work planned currently will be underground.

The next visit was to Alandur station. It is one

of the two metro stations where Corridor I (Air-

portWashermanpet) of the project will intersect

with Corridor II (Chennai CentralSt Thomas

Mount via Egmore and CMBT). Alandur would be

Chennai's first multi-level metro station.

The site visi t to both these stations offered ex-cellent insights about the challenges and com-

plexities involved in the planning, design and

construction of metro rail projects.

CHENNAI METRO SITE VISIT

(L-R) Vineet Kashyap of UTC moderating the panel discussion on Renewable Energy in Metro along withN Prasad of CMRL, Ankit Srivastava of Rapid Metrorail Gurgaon and Mangal Dev of Alstom

-33BWJ,VNBSPG0UJTQSFTFOUJOHBDFSUJDBUFof appreciation to Ankit Srivastava of RMGL

N Mohan of Philips Lighting making a presentation

(L-R) Bibhor Srivastava of ITP withDr Sudhir Krishna

(L-R) Sandeep Majumdar of NIIT presenting amemento to K Rajaraman, MD, CMRL

5IFQSFFWFOUCSJFOHPOSTUEBZPGUIFTVNNJU

Under construction site at Alandur station




48/68


BIG INTERVIEW

Dr Sudhir Krishna, secretary, ministry of urban development, on

how the government is gearing up for developing efcient and

effective urban transportation in the country

While preparing a detailed project report

(DPR), care must be taken not to get

carried away by the existing scenario, and

carefully analyse the statistics that are

abound today and also the projections for

future. In Delhi RRTS, when the DPR was

being prepared, the Delhi government was

nervous. They did not want the RRTS to

come up in Delhi as they were scared that

a lot of people would start moving to Delhi

and overcrowd it.To allay their fears, we conducted a

study on the utilisation of Delhi metro,

in different segments, which proved that

people coming from Gurgaon to Delhi

are much fewer in number than people

coming from Delhi to Gurgaon.

People coming from Ghaziabad to Delhi

are far more in number than people

coming from Delhi to Ghaziabad as

evident by the Origin Destination Study

(ODS) report. The report shows that

Gurgaon has become a hub for economic

activities and people are travelling fromDelhi to Gurgaon for better opportunities.

It means that the metro has not caused

people to migrate to Delhi, it has allowed

people to move out of Delhi. On the other

hand, people from Ghaziabad do not have

many job or business opportunities, and

hence, are migrating to Delhi.

Is single-window clearance a myth?

How do you get the multiple agencies

to work together more cohesively?

Clearances are of two types, mainly.

One is the technical, and the other,

Metro talk

Indias growing fast and its

needs are growing even

faster. Right from basic

necessities for survival such

as food and shelter, to the essentials

for economic growth such as

transport: the country needs more.

Spearheading the movement in

India is Dr Sudhir Krishna, secretary,

ministry of urban development. On

the board of many of the country'smetro projects, Dr Krishna is currently

working on various fronts to make

them viable, efcient and effective.

We speak to him at the summit to know

the government's side of the story.

The existing urban transport is

crumbling, especially in cities

like Mumbai. Can we make

these new metro projects

future proof?

We did not give enough

attention to the cities,particularly to the

urban transport, in

the initial half century

post Independence.

The recent efforts

of the GOI and the

States, including

the cities, have

attempted to

correct the

situation and

are showing

good results.

INTERVIEWED BY IMRAN MIRZA


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BIG INTERVIEW


from land use regulators. The former

comes mainly from the Railways, while

the latter, from civic authorities. For

the former, which includes the RDSO,

the MOR facilitates the single-window

clearance. For the latter, the respective

States have constituted a High Powered

Committee (HPC), chaired by the State

Chief Secretary. These arrangements are

constantly being reviewed, to improve

their effectiveness.

There are some under-subscribed lines

in Delhi. People are also asking questions

about the alignments in Bangalore and

Mumbai. Whats your view?

There are some undersubscribed lines

on the metro, primarily the line that

goes towards Mundka (Bahadurgarh)

and the line that goes towards Badarpur(Faridabad). But that does not mean

that people over there do not need a

metro. Statistics will show that the

lines roads are undersubscribed, but

the truth is that the roads over there

are choked. They are always crowded

as people are not migrating from roads

to metro.

The reason is obvious. From

Faridabad, there is no connectivity.

If you start with your own vehicle

or any other mode of transport and

come up to Badarpur, then you mightas well travel another few kilometres

and conclude your journey. If you have

travelled 10 kilometres, then you do

not want to migrate to metro for just

7-8 kilometres. Once connectivity is

provided, the subscription rates would

improve. This makes it important to

have origin-destination studies. This

also calls for conjunctive use of other

modes of transport.

So, while preparing a DPR

for metro rail, we should

see the potential of gettingpeople from different

sources. You cannot take

the metro everywhere,

bus feeder services are

essential to keep metro

optimally utilised and

make them viable. Choice

of metro rails has to be based

on a comprehensive mobility plan

and alternative analysis of network

connectivity in the region as the focus.

Before a city proposes a metro rail, it

should have a ridership of at least 1

million on any mode of transport, so that

the shift to metro is easier. Furthermore,

since the metro rail corridors will be

the main transit corridors, they should

have good integration with other feeder

networks. We should interact with each

other more frequently and closely to

address social, economic, environmental

and mobility issues to make these

projects successful. Certain sections

of the Delhi metro were

undersubscribed because all

these dimensions were notfully taken care of.

But how do we ensure

multi-modal integration

of transport?

For multi-modal integration

of transportation, the

integration should be at four

levels: infrastructure, operation, fare

collection and information. Fare

collection is very important as it

motivates people to take the metro.

With a single card for the feeder bus

and then the metro, we can denitely

increase the ridership. We would like

all metro projects to have feeder bus

services, operated either by the metro

company itself, private operators or

through state transport corporations. To

ensure infrastructure and operational

integration, the Govt of India has

decided to carry out appropriate smaller

projects alongside large-sized metro

projects, for example, pedestrianisation

and public cycling network.

What are you doing for fare

integration?

For fare integration, the MoUD has

recently initiated common mobility

card for all operators of all modes,

including parking, across all cities. In

the rst step, the common mobility

cards can be at the city level and then

eventually at the state level under a

national architecture specied by the

ministry of urban development. DMRC

has already initiated it. In Bangalore,

the state government is also planning

Choice of metro rails has to be based on acomprehensive mobility plan and alternative analysis ofnetwork connectivity in the region as the focus.

19CITIES TO GET SUPPORTFROM CENTRAL GOVT

FOR METRO PROJECTS

More than two million passengers travel daily by the Delhi metro.


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BIG INTERVIEW


an integrated fare card between

Bangalore metro and city bus service,

which can also be integrated with

the Karnataka State Road Transport

Corporation later on. The software and

other architecture will be amenable for

integration with other states for the

national mobility card.

How do you plan to have information

integration?

For information integration, the MoUD

has initiated has a national public

transport helpline, on the lines of 100

number for police control room. We

have already taken the universal short

access codes 155220 and 155221 from

the Department of Telecommunications

and advise all state governments andpublic transport corporations to move

over to these numbers for public

transport helpline.

Today, people are highly mobile,

they move from one city to another

frequently. We can have one national

mobility helpline number so that

passengers do not have to remember

different numbers in different regions.

With so many metro projects being

planned across the country, how is the

government gearing up?In order to facilitate the massive

expansion of metro rail projects in the

country, we have taken many important

steps, whether it is within one

municipal area or beyond, to be taken

under the central metro acts, namely:

The Metro Railways Construction of

Works Act, 1978 and the Metro Railway

O&M Act 2002, which have been

extended to whole of India.

Some more amendments to the act

to make it more clear, especially with

regards to PPPs and designating somepower to the state governments are

under progress in consultation with

various metro rail administrations and

the ministry of railways and, of course,

the ministry of law.

The ministry has nalised common

set of general rules for all metro rail

projects so that metro rail operators do

not have to approach the government of

India for separate rules, which can be

very time consuming. These rules shall

be notied very shortly. Furthermore,

we also envisage setting up a National

Urban Rail Transit Authority to act as

the standards setting body and also

act as a regulator for metro rail in

the country. We have also proposed

to set up a national research design

and standardisation cell for metro rail

projects to develop low-cost indigenous

technologies for metro rail.

We have already set up technical

committees incorporating senior

experts from metro rail companies,

Indian railways, RDSO, MoUDand the National Manufacturing

Metros across the country have com

a boon to the lower and middle cl

Considering the global experience about PPPs inmetro projects, most of them might be on governmentfunding to a significant extent.

Competitiveness Council to take part

in this activity. These committees are

expected to nalise their rst draft

report by 1st March 2013.

To increase the manpower

capability and availability, special

courses on Urban Transport and

Planning with specialisation in metro

technology are also proposed to be

taken up by premier educational

institutions, including the IITs so

as to get adequate manpower forsuch projects. Chennai Metro and

Delhi Metro are already conducting

post-graduate programs in metro rail

technology in association with the

respective IITs.

How is the government planning to

facilitate funds for such projects?

We cannot complete anything that

we have discussed so far without

adequate nancing mechanisms.

We have envisaged an innovative

nancing mechanism in the phase 3

In 2006, only about 20 cities had

organised bus services due to lack of

funding. However, in a short span of

just six years, the number has gone

up to 65 cities, thanks to the funding

provided by the government.

GOING PLACES


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BIG INTERVIEW


of the Delhi metro project, which will

also be replicated in other projects. This

inòlès nancinQnot onlc from m_lti

national nancinQinstit_tions s_ch

as 43-+ b_t also domestic nancinQ

instit_tions s_ch as 2?D-9, 330-6

and so on. The Q_arantees will either be

soèreiQn or compancts own. ,anQalore

metro has proceeded to obtain a loan

from 2?D-9 of oèr


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INTERVIEW


With increasing urbanisation, there will be a greater demand for elevators

and escalators in the country, says Sebi Joseph

Gone are the days when

elevators and escalators were

limited to a few tall buildings

in the country and accessible

to only a fraction of the countrys

population. Today, almost every newbuilding has an elevator and every mall

has escalators. Public infrastructure

projects such as the metro are also

adopting elevators and escalators. We

speak to Sebi Joseph, MD, Otis India to

know how the market is shaping up for

this industry.

How is the market shaping up in India

for the escalator and elevator market?

There is a lot of demand. We will have more

escalators, more trav-o-lators, as more

malls come up. The rise of the middle-class,

thanks to the growth in the IT sector in

cities like Bangalore, Pune, Hyderabad,

and also in cities such Chennai, Gurgaon,

Ahmedabad and Baroda, has led to in-

creased urbanisation, which will lead

to demand for our products.There will be increased

need for escalators, eleva-

tors, trav-o-lators, etc., in

residential, commercial

as well as infrastructure

space. I recently met one

of our top customers at

an innovation forum who

pointed out an interesting phe-

nomenon. A lot of people, who live in

old buildings that are less than four storeys

tall, need elevators today. He suggested

that theres a lot of demand for elevators in

such buildings not the standard ones, but

custom made elevators. They have ceased

to be a luxury and soon become a necessity.

The story would be the same for escala-

tors. Customers prefer to go to malls that

are convenient and deploy suchmobility solutions.

Similarly, when it comes

to metros or any other pub-

lic infrastructure, people

will demand such facilities

that offer them convenience

as they are getting accus-

tomed to it.

Are there any special design require-

ments for metro projects?

Metro projects are not really high-rises,

they are mostly horizontal structures.

India on the move

57,000OTIS UNITS

CURRENTLY

INSTALLED IN

INDIA

Image used is for illustration only


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Exhibitors at bC India believe that the worst might be overand demand will pick up soon, launch new products at theexpo. But will their hopes come true? Imran Mirza explores

DOWN,BUT NOT OUT


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EVENTS


The last two years havent

been the best ones for the

construction equipmentindustry. A general

slowdown in the infrastructure sector

and dwindling demand for equipment

was the story throughout last year.

However, the exhibitors at bC India

seemed very upbeat and positive about

the markets future.

Construction Week spoke to many

exhibitors at the event, who seemed

to unanimously agree that the India

growth story is still intact and the

current sluggishness in the market

would disappear.

K Vijay, managing director, Ajax Fiori

says, We are optimistic and we are

hoping that this year will be better thanthe last year. There have been some

green shoots in last two-three months

but its too early to say if its a rm trend

or not.

Their optimism isnt completely

misguided. The country needs heavy

investments to develop and improve

its infrastructure in almost every

sector roads, energy, housing, water,

ports, and so on. The government has

announced plans to invest US$ 1 trillion

in infrastructure development during

FY 2013-17. Most of this investment will

be in large projects that require heavy

machinery and construction equipment.

Even in the housing sector, the averageproject size and height of buildings has

gone up (especially in metros), leading

to the requirement of special machinery

and equipment.

Also, with increasing competition

in the market, contractors are now

focusing on building quickly and

efciently through the use of highly

specialised equipment.

Delays in projects directly imply

increase in costs and lower margins for

developers and contractors. Although

cheap labour is available in plenty,

Despite the challenging situation in

the construction machinery industry,

A BAUMA CONEXPO SHOW bC India

impressively strengthened its position

in the Indian market. More than 28,000

professional visitors attended the show,

which took place at the Bandra Kurla

Complex in Mumbai from February 5 to

8, 2013.

A total of 710 exhibitors from 33

countries took part in the second edi-

tion of this International Trade Fair for

Construction Machinery, Building Ma-

terial Machines, Mining Machines and

Construction Vehicles, which occupied150,000 square meters of exhibition

space. Of the 710 exhibitors, 437 (61

percent) were international exhibitors.

As a result of this global interest, the

show featured nine national pavilions,

namely from China, France, Germany,

Italy, Japan, Korea, Poland, Spain and

the United Kingdom.

Thomas Lffler, chief executive officer

of bC India looks upon the results highly

favorably: The visitor numbers are satis-

fying in times like this. Therefore, I hope

that the success of bC India indicates areturn to growth in the Indian construc-

tion market.

The Indian Construction Equipment

Manufacturers' Association (ICEMA) and

Builders' Association of India also host-

ed a conference alongside the event.

BC INDIA 2013


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EVENTS


throughout the country, construction

companies are now focusing on

leveraging technology to reduce their

costs and complete projects on time.

So,what is the reason behind a

slowdown in the sector, despite the

presence of all the right ingredients?

The governments austerity drive to

rein in scal decit and rising interest

rates are perhaps among the biggest

reasons behind this sluggishness.

Despite the huge investment

planned for the current Five Year Plan,

Finance Minister, P Chidambaram

might tighten the purse strings in

Budget 2013. Reports suggest that

Chidambaram has already cut down

the actual public expenditure by nearly

9 per cent against the original target for

thenancial year ending March 2013.The main intention of the government

seems to be to avoid a sovereign

ratings downgrade and prevent

further economic turmoil due to poor

corporate investment sentiment.

Critics term this approach as awed

as reduced public spending by the

government might further deepen

Indias economic slowdown.

Despite this, the industry remains

hopeful as not investing in the

countrys infrastrcuture is not an option

for the government. The volume andscale of investments might be trimmed

as the government struggles to combat

decelerating growth, rising ination

and increasing scal decit.

The austerity measures and cut

down on public expenditure might ease

down towards the end of 2013 as the

government lowers its subsidy burden,

which, in turn, will help rein in the

scal decit.

According to Indian Construction

Equipment Manufacturers'

Association, the recent policy initiativesannounced by the central government

and lowering of interest rates by the

RBI are being looked at as early signs

of revival by manufacturers. Many

domestic manufacturers are planning

to enhance their capacity while others

are looking at tieups with foreign rms

to offer new technology and products.

Read on to know the views of some of

the manufacturers we met at bC India

and the products showcased by them at

the expo.

India's investment in infrastructure as a % of GDP is amongst the highest in the world

Infrastruclure inverstment

over GDP (%)1

Nominal GDP USS (2010) Real GDP Growth

2005-2010 (%)1

8

6

6 8 10 12

4

4

2

20

0

Colombla

Argenbina

Indonesia

Brazi

France

UKItaly

South

Korea

India

ChinaChile

Note: 2010 data: Investment over GDP does not include Oil & Gas investments:Eafimated 2010 dataSource: World Economts forum Report, 2010, Economist interllegence Unit (CIU) intermational monelary fund (MP) World Bank

Note: Projection has been made by applying growth rate during 2007-15 (given in ECE Vision 2015 report) on actual2010-11 market size published in eIndia publications. Source: Analyst Report (eIndia Publications), ECE Vision 2015

Growth in earth moving andconstruction equipment

INRBn

600

400

300

500

200

100

0

100

145

193 200213

227

282

350

435

540

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

+18%

+24%


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EVENTS


JCB

HESS

JCB, which showcased its tracked

excavator, wheel loader, tandem

roller and pick-n-carry

cranes besides others,

said it was an excellent

opportunity for them

to showcase India centric

technologically advanced

machines to the visitors of bC India.

We displayed our world class range

of tracked excavators with prime

focus on the recently launched JS 120.

It is among the most fuel-efcient

machine in this segment as it saves

upto 2,500 litres of diesel per year,

the company said.

It also had 430ZX wheel loader,the latest offering in the wheel loader

segment, on display. Popular for its

best in class efciency, 430ZX has the

lowest operation cost and provides up

to Rs2 lakh savings per year, said a

company ofcial.

JCB also showcased 9 T tandem

roller VMT 860 and Liftall 1553 pick

n carry crane. Its 3DX Xtra and 3DX

Super from Backhoe Loader category

were also a part of the product display.

Apart from machines, JCBs world

famous Dancing Diggers show wasanother attraction for the visitors.

Hess exhibited its Multimat RH 500, which is completely

assembled in India. Until now, Hess used to import these

machines from Germany but now only a part of the machine

is brought from Germany and the balance accessories are

manufactured here.

The Multimat RH 500 has a very compact structure. It is

capable of producing curbstones, pavers, hollow blocks or similarconcrete products in a semi-automatic or fully automatic version.

The German rm, which is expanding its manufacturing

facility at Bangalore with an investment of 3 million, plans to

manufacture four machines at a time. We are targeting to do

export some of it from India, may be in a couple

construction week a

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