Focus on infrastructure, real-estate, construction, finance report on the infrastructure industry

1. March 31 - April 06, 2014 1
Volume 3 l Issue No 13 l March 31 - April 06, 2014 l Price: Rs 100An MMR, Braj Binani Group Publication
Slump in infra
investment hits
India’s growth: IMF
The slump in infrastructure and
corporate investment has been
the single largest contributor to
India’s recent growth slowdown,
said an IMF working paper, ‘India’s
Investment Slowdown: The High Cost
of Economic Policy Uncertainty’, by
Rahul Anand and Volodymyr Tulin.
It finds that heightened uncertainty
regarding the future course of
ACC plans waste-heat
recovery system
After commissioning its first
waste-heat recovery plant at Gagal
in Himachal Pradesh, ACC plans to
replicate the success at its cement
plants in Wadi (Karnataka), Jamul
(Chhattisgarh), Kymore (Madhya
Pradesh) and Chanda (Maharashtra)
with an investment of about Rs 360
crore.
The Gagal heat recovery plant,
which produces 7.5 mw, achieved
stabilization last week. It is expected
to reduce over 44,000 tons of carbon-
dioxide emission a year. ACC invested
Rs 100 crore to set up the plant which
is fitted with a turbine that can enhance
power production to 9 mw as and
when steam availability in the cement
plant improves.
ACC expects to recover the
investment made in Gagal in four-and-
a-half years with an annual saving of
Rs 22 crore. K N Rao, Director (Energy
& Environment), said that the four
cement plants where the heat recovery
system would be installed over three-
four years are capable of producing
30-32 mw in all, resulting in a savings
of Rs 90-100 crore a year. “The Wadi
cement plant has the world’s largest
kiln and is capable of producing up
to 9 MW. We are exploring various
options of funding the projects,” said
Rao.
The cement industry has urged
government to give renewable energy
status to waste-heat recovery plants.
Most of the cement companies are
power surplus as they have captive
power plants. The surplus power
produced through waste heat is sold at
Rs 2.30 a unit due to lack of renewable
energy status.
A few cement plants buy grid power
at Rs 6.20 a unit, while the production
As companies find hiring skilled
labour difficult even for the existing
projects, builders and highways
associations under Construction
Skills Development Council (CSDC)
have come together to train and
certify around 3.5 lakh workforce in
the construction sector over the next
one year. The trainees would also get
at least Rs 10,000 as stipend to help
them pay training fees and look after
their living while being trained.
“We need to employ 300 million
people in the next 20 years. The
US employs around 135 million
people. If we need to employ that
many people it would require that
much investment and skills to take
up the job. That is where the skill
development exercise would help
firms and workers together,” said Ajit
Gulabchand, Chairman, HCC.
To begin with, six skills —masonry,
carpentry, bar bending & fixing,
scaffolding, surveying and assistant
laboratory technicians —have been
identified for training on urgent basis.
The skills under the programme for
certification are expected to increase
to around 500 in the construction
segment alone. “We will work jointly
with large private companies and
institutions to devise industry-based
curriculum, set training standards,
offer good quality vocational training,
and provide industry-endorsed
certification,” he said.
The Government of India has
planned an investment of $1 trillion
in the infrastructure sector in its 12th
Five-Year Plan. The construction
sector needs to build capacity and
hence it is important to train up
skilled manpower. The training would
take care of requirements within the
real estate, residential, commercial,
industrial and Sez sectors. In
the infrastructure arena, utilities
like power and irrigation, urban
infrastructure, and transportation,
railways, civil aviation, roadways, and
ports would be catered.
“The certificate would clearly
outline the productivity of the worker
and how much they are capable of
producing, which would help the
employers to hire them as per their
need. The trainee would undergo
set number of hours of training and
would be assessed by the third party
before they are certified by CSDC.
The training increases productivity
and fetches better salary for workers
at a time when construction activity
and labour have seen de-growth,”
added Gulabchand.
Builders, highway unions
to train 3.5 lakh
workforce
broader economic policies and
deteriorating business confidence
have played a significant role in the
recent investment gloom.
“We find that heightened policy
uncertainty has had a particularly
pronounced link with the decline
in new investments as well as with
the rising value of investments that
were postponed or cancelled. After
controlling for these factors, financing
costs do not appear to be a critical
factor in explaining the decline in new
investments,” the paper said.
“In the short term, lowering nominal
interest rates may provide some relief
in terms of a reduced interest burden,
especially to corporates with high
leverage,” recommended the IMF
working paper.
cost of thermal power works out to
Rs 4.50-5 a unit. The industry with a
cement production capacity of 350
million tons is capable of producing
about 1,000 mw through waste heat
recovery, said Rao.
“The industry has to invest Rs
12,000 crore to set up 1,000 mw heat
recovery plants. It would be viable only
if government fixes a competitive price
for the surplus power,” he said. Apart
from heat recovery plant, ACC has
drawn an elaborate plan to bring down
energy consumption by 5 per cent at
its 10 plants by improving efficiency. The Australia-based infrastructure
investor Hastings Funds Management
Ltd (HFML) has struck up a partnership
with the Aditya Birla Group as it
looks to extend its reach into India,
according to sources familiar with
the matter.
HFML sees new opportunities for
investors as India looks to plug the
infrastructure gap with investment in
everything from roads to electricity
grids topping $1 trillion.
“A huge infrastructure need is
building up,” said a top official from
HFML. He didn’t say how much
money the new fund was targeting, but
Hastings already manages about 7.4
billion Australian dollars ($6.9 billion)
in infrastructure assets globally.
The firm is keen to tap the Indian
market as it looks to expand its
presence in Asia, where so far it
has focused on the more developed
markets of South Korea and Japan.
The partnership with Aditya Birla will
initially offer debt financing through a
dedicated India fund for already-built
infrastructure, such as airports and toll
roads. For now, the two companies
say they aren’t looking to finance
fresh infrastructure projects through
the venture.
Aditya Birla, Hastings
in agreement for
infra financing

2. March 31 - April 06, 2014 2domestic
Indian Railways track global
infra projects
The Indian Railways might be
struggling to make both ends meet
due to its falling revenues but its
public sector units are going beyond
the seven seas to increase their
revenues. The Rail India Technical
& Economic Services (Rites), a PSU
under the Railways’ administrative
control that operates as consultant
for transport and infrastructure
projects, has bagged the contract
to prepare Kenya’s overall transport
plan comprising roads, railways and
ports.
“Kenya has a big coast line and it
wants to be the sea contact for other
landlocked African nations. We’ll be
preparing an integrated plan for their
railways, ports, airports, waterways
and road network. We also did the
same plan for India, out of which the
dedicated freight corridors network
plan was born,” said a senior Rites
official. The official refused to share
the cost of the contract. Rites is also
in the race for similar contracts in other
East African countries.
The PSU has already completed
international projects such as
operation and maintenance of
Bangladesh Railways, study for
improvements to the railway tracks
of Botswana Railways, feasibility
study and technical assistance for
rehabilitation of rolling stock and
bridges of Cambodian Railways, and
operation and maintenance of the
Baghdad-Al Qaim-Akashat section.
It has also done revitalization
study and investment plan of Nigerian
Railways, operations improvement
plan and decentralization studies for
Tanzania Railway Corporation, railway
efficiency improvement project for
Uzbek Railways, and investment
plan for the National Railways of
Zimbabwe.
“We are internationally recognized
asaleadingconsultantwithoperational
experience in Africa, South-East Asia,
Middle East and Latin America.
Most Rites assignments are for
national governments and other apex
organizations,” said the official.
Another Railway PSU, the Indian
Railway Construction Company
(Ircon) is also looking for electrification
projects in Iran. At present, the
company is implementing an
electrified double track railway line
costing more than $1 billion. Ircon has
widespread operations in Bangladesh,
Mozambique, Ethiopia, Afghanistan,
UK, Algeria and Sri lanka. Ircon had
a net worth of Rs 2,300 crore at the
end of 2012-13.
The Buildings & Factories Business
of L&T Construction has won new
housing orders worth Rs 1,981 crore
in March 2014. A major residential
order has been bagged in Bengaluru
from one of South India’s leading
property developers which is also the
company’s biggest residential order
in this financial year.
The scope of work involves civil,
structural, MEP and finishing for 24
towers and 271 villas. The towers will
comprise two basements plus ground
floor with levels varying from 18 floors
to 29 floors. The project is scheduled
to be completed in 42 months.
Another order has been received
from an esteemed customer for
construction of residential township
in Gujarat.
The wait for South Korean giant
Posco to start its Rs 52,000 crore
Odisha steel project, involving the
largest-ever FDI in India, may get
longer as the state government is not
expected to transfer the required land
to it till after the Lok Sabha polls are
over in mid-May.
The steel maker secured
environment clearance in January for
its 12 million-ton (mt) plant, ending
eight years of wait for the project.
However, a source said, “There is
no progress on the project as the
state government has not transferred
remaining 1,000 acres to Posco.
During a review by the Steel Ministry
this month to know the fate of major
projects, Posco had expressed
inability to start work on the steel-
to-port project at Jagatsingpur in the
absence of adequate land. “
The steel giant had inked a pact
with the Odisha government in June
2005 to set up the integrated steel
plant and port project on 4,000 acre
in the coastal town of Jagatsinghpur.
It needs 2,700 acre to commence
work on the first phase, while the state
government has already transferred
1,700 acre to it.
Office space absorption is
likely to rise 7 per cent this year
to 29 million sq ft in India’s seven
major cities as corporates look at
expanding businesses, says global
real estate consultant DTZ. The
absorption was 27 million sq ft last
year in the seven cities -- Delhi-NCR,
Mumbai, Bengaluru, Chennai, Pune,
Hyderabad and Kolkata.
In its report on India office demand
& trends, DTZ also projected that
office rentals would remain stable in
The project involves turnkey
construction of 134 housing units. The
construction includes civil, structural,
MEP, finishes and other associated
works.
The Buildings & Factories Business
caters to design & build construction
of residential buildings, including
high-rise towers, airports, information
technology and institutional space,
holistic health care centres, hotels,
malls, cement plants, other factories
and other commercial structures in
domestic and international market.
“One of our key focus areas has
been the growing potential in the
residential sector and by winning
these prestigious orders we have
made significant inroads into this
space,” said S N Subrahmanyan,
The steel project had received
initial clearance from the Environment
Ministry in 2007, and final approval
was granted in 2011. The National
Green Tribunal (NGT), a quasi-judicial
body, suspended the permit in March
2012, citing environmental concerns.
However, in January it obtained
the clearance with a condition that
Posco must spend 5 per cent of its
total investment on “enterprise social
commitments”, which will push up
cost by $600 million (over Rs 3,600
crore).
A company official expressed
hope of a lease agreement with the
Odisha government soon so that the
work on initial 4 mt plant could start
after the general elections. As per
Posco, if everything goes as planned,
the phase-1 of the project might be
commissioned in 2018; phase-2
will be completed three years after
completion of phase-I, and phase-3
will be commissioned within three
years after phase-2. Last year, facing
inordinate delays in land acquisition
and local opposition, Posco scrapped
its proposed Rs 30,000-crore project
in Karnataka.
most markets in the first half of 2014
and rents would start rising from
the second half. “Most corporates
are expected to firm up plans for
expansion in the next few months
with the overall take-up forecast
to grow in 2014, especially in the
second half of the year,” said DTZ.
Highlighting the findings of the
survey-based report, DTZ India
Research Head Rohit Kumar said
that 41 per cent of the respondents
said they would add office space.
Member of the Board and Senior
Executive Vice President (Infrastructure
& Construction).
L&T Construction wins orders
worth `1,981 cr
DTZ office space demand to grow
by 7 pc in 2014
S N Subrahmanyan,
Senior Executive Vice President,
L&T (Infrastructure & Construction)
Demand would be led by the IT/
ITeS sector (40 per cent) followed by
manufacturing and BFSI sectors.
Bengaluru would continue to
be the largest contributor in office
space demand. On rent, the survey
said about half of the respondents
expect rents to remain stable in the
first half of 2014. “But the majority
of respondents agree that rents will
record a moderate increase over the
course of the next 12 months.”
The Faridabad-Noida-Ghaziabad
(FNG) Expressway project has finally
been put on the fast track. Along with
the residents of the three prominent
satellite cities of the national capital—
who will delight at the prospect of
getting better connectivity with the
rest of the region—the real estate
market along the stretch is also
expected to witness a lot of action.
As per reports, the area has
already seen price appreciation in
property rates by as much as 20 per
cent since 2010, and the demand
is only expected to rise further as
the expressway project becomes a
reality.
Realty players unanimously feel
the corridor will make the region more
accessible to the rest of the National
Capital Region (NCR), leading to
more demand for development.
Brijesh Bhanote, Director, sales and
marketing, 3C Company, says, “The
workontheFNGExpresswayhasbeen
speeding up in the past few months
and it will increase the demand,
leading to higher appreciation of
timely investments. It is expected that
the expressway will be functional in
the next year, connecting the satellite
towns of Delhi. As per reports, the
area has seen price appreciation
in property rates by 15-20 per cent
since 2010. Hence, it will be a good
decision for developers, as well as
property buyers, to invest in this
area.”
After over two decades, the project
has finally been revived. The FNG
Expressway is 43 km long and is set
to cost Rs 1,000 crore. Around 21
km of the expressway fall under the
purview of the Noida authority, which
has completed work on 16 km so
far. The rest of the expressway lies in
Faridabad and Ghaziabad.
The development of the FNG
Expressway is great news in terms of
traffic decongestion, along with real
estate development along the stretch.
However, as with any infrastructure-
related project, the benefits of the
FNG Expressway will take time to
reach the masses. As per industry
estimates, approximately Rs 13,500
crore have been invested in the
residential sector and about Rs 7,000-
8,000 crore in the commercial sector
along the FNG corridor.
FNG expressway puts
realty on fast track
Progress on `52,000-cr
Posco project likely
after polls

3. March 31 - April 06, 2014 3IN PERSON
Established in 1950, Ravin Group
is one of India’s fastest growing
business groups. It comprises
companies managing diverse
business interests in the power and
energy sector. It offers comprehensive
solutions across five verticals like
manufacturing, renewable energy,
EHV & accessories, trading, and EPC
services in the field of renewables,
cable laying, cable jointing and
termination, sub-stations, etc.
The group’s focused approach
towards project management enables
the creation of world-class projects
and innovative solutions.
What is the growth rate of the wire
& cable industry in India at present,
and is the demand for wires and
cables going further? Any emerging
areas of applications?
The growth rate of the wire
and cable industry in India has
considerably slowed down over the
past few years. Earlier, from a positive
growth rate of 10-12 per cent, we
have come to a negative growth
rate now.
Besides, there has been a vast
increase in installed capacity and the
fact that a huge payment crisis exists
in the market, which has added to the
woes of the industry.
The present government policies
are very short-sighted and rather than
encouraging growth, have actually
retarded the process. The spend on
infrastructure capital expenditure has
been very low and unless this is not
changed drastically, we will not see
any growth for this industry in coming
years. At the moment it seems that
only a change in government can
spur the prospects of growth for the
entire electrical segment.
There are lots of emerging areas
of applications, especially on the
renewable side. Solar applications
have become the need of the hour,
especially as even today the per
capita consumption of electricity in
India is a measly 960 kwh, and more
than 50 per cent of the population
does not have access to electricity.
Added to this fact is that utilities
find it very difficult to supply electricity
to small consumption areas, and it
is not just a question of supply of
electricity but subsequent month-on-
month billing, and the collection of
money for the same that is proving to
be a big deterrent in terms of costs.
Our analyses show that a state
like Maharashtra would lose about Rs
8,000 to Rs 9,000 crore per annum by
way of such costs, which are actually
paid for by other segments of users.
Hence, if such costs were reduced
by way of solar installations in these
areas, not only could we have
electricity available to a lot more of
the population , but it would also
reduce the costs paid for by other
users and could make the utilities
viable without subsidies.
In India, we have brought about
solar installations on single and dual
axis trackers which increase the
generation by up to 35 per cent with
a small increase in capital costs.
India’s T&D network has many
limitations and the electricity losses
too are very high. What measures
would you suggest?
The problem of T&D losses arises
not so much from the generation
point to the transmission point, but
from the distribution segment. Since
power distribution is mainly a state
subject, it depends mainly on policies
of the state governments.
‘Standardised, well-engineered
products give higher ROI’
“In today’s Indian cable industry, $100 million
capex for setting up a plant with a decent
technology would translate into revenue of $1
billion per year. Out of these $1 billion dollars, one
would easily be able to earn $100 million in the
first year itself. So a foreigner who is putting $100
million will take out that amount of money in the
first year, and then for the next 25 years he would
be taking Indian money out of the country,” says
Vijay P Karia, Chairman & Managing Director,
Ravin Group of Companies, in an interview with
Paresh Parmar. Excerpts:
So if they privatize distribution
network, there will definitely be a big
boost not only to demand for the
industry, but also to savings in the
power sector.
Moreover, the utilities should focus
on high consumption and higher
population areas which is cost viable
for them, and have solar installations
in thinly populated areas, even as
a part of CSR activities of large
corporates, which could give impetus
to both urban and rural segments.
In India price weighs over quality.
How do you plan to tackle this?
It is our responsibility to make
people understand the importance
of quality. People should know that a
standardized and a well-engineered
product will give higher returns on
investment as compared to a non-
standardized one.
Selecting quality wires is important
not only as the property and life-saver,
but also because it reduces electricity
consumption. Poor quality wiring can
cost 6-9 per cent more in terms of
consumption, but more importantly a
huge number of lives and property are
lost in the country by way of fires.
Two recent examples that come to
mind are the recent fire in a submarine
off Mumbai shore, which preliminary
news reports say emanated from
the cables on the submarine. This
was a very unfortunate loss. Another
one was the fire that broke out at
Mantralaya, Mumbai, a few years ago
which again was due to faulty wires
and cables.
It is not entirely in our hands to
prevent a price war, not in terms of
mere profitability, but in terms of
quality suffering due to a price war.
Most of the Indian companies are
currently engaged in a kind of price
war. But this doesn’t sustain; and, like
I said, one of our corporate pillars is
sustainability. So we do not indulge in
a price war. We believe in establishing
direct communication with customers;
we tell them what exactly drives us; for
we believe that they are our biggest
stakeholders.
In any company, customers are
the company’s biggest stakeholders.
So your customers should know
what you are doing. Communication
is something that we constantly try
to enhance. We keep the customer
posted on new products or services,
quality improvement, safety standards
and so on.
Any suggestions to the government
for changes in the policies in favour
of the industry?
I’d like to dwell on three industry-
related issues on which we all should
focus. wFirstly, the whole policy of
customs duty and taxation needs to
be properly examined, as there is no
provision for protection for the local
industry in our country.
The import duty on PVC and
finished cables at present is 7.5
per cent. The duty drawback on
aluminium conductor in percentile is
much more than what it is on cables.
All import duties on raw materials for
cables are 5 to 7.5 per cent. While
duty drawback on cables is 1.8 per
cent.
Now, how can we be competitive
in the international market? The
government’s policy is rather skewed
and short-sighted. We need to
improve the capital infrastructure if
we want to create demand – a kind
of demand that lasts for a decade or
two. Six-monthly policies or yearly
policies will just not work. Certainly,
the capital spent on infrastructure
needs to go up considerably.
Secondly, we need to protect the
local industry. Local industry means
the India’s local industry. I am not
referring to foreign multinationals that
have 100 per cent FDI. Multinational
companies do not need protection
because they have deep pockets.
If you want to open a company in
the Middle East, you have to have
a local with 51 per cent partnership.
You cannot open a company in China
without local partnership. Why does
India allow 100 per cent FDI in these
areas? In today’s Indian cable industry,
a $100 million capex for setting up a
plant with decent technology – top-of-
the-line technology – would translate
into revenue of $1 billion per year. Out
of these one billion dollars, one would
easily be able to earn $100 million in
the first year itself. So, the foreigner
who is putting $100 million will take
out that amount of money in the first
year, and then for the next 25 years
he would be taking Indian money out
of the country. Why don’t we support
the local people in setting up industry
and why don’t we give them access
to technology?
Thirdly, we need to give a boost
to research and development. In the
ongoing price war, R&D has taken
a backseat. Fortunately, Ravin has
invested a lot in R&D in new areas,
which is helping us grow by launching
new products. The will to launch new
products should be stronger in our
industry. We must not say that only
foreigners can design new products.
(Contd. on pg 11)

4. March 31 - April 06, 2014 4INFRASTRUCTURE
CII suggests widening of
national highways in Kerala
The Confederation of Indian
Industry has suggested widening
of national highways in Kerala. The
engineering standards and guidelines
provided in the Indian Road Congress
for widening of NH recommended that
a Right of Way (RoW) of a minimum
45 meters is essential, considering the
freight movement, current and future
growth of the project stretch, CII said
in its report on national highways in
Kerala.
The report also considered
Five road developers operating
eight highway projects between
themselves have approached the
National Highways Authority of India
(NHAI) to reschedule the premium
they owe government. The premium is
the amount that companies agree to
pay government in return for bagging
a road project.
It is usually calculated on the basis
of the estimated toll revenues. These
eight projects owe government in 20-
25 years Rs 25,000 crore, and as many
as 24 more road projects are now likely
to also opt for rescheduling.
According to the sector sources,
IRB Infra, Reliance Infra, Essel Infra,
Srei Infra and Larsen & Toubro have
all approached the NHAI so far, after
government announced the policy,
a day before the election code of
conduct came into effect.
Two projects of IRB Infra, three of
Reliance Infra, and one each of Essel,
L&T and Srei had sought premium
rescheduling until last week. The
government had awarded these eight
projects for a total cost of Rs 13,000
developing four-lane traffic with a
minimum RoW of 30 meters without
service roads. However, it came
to the conclusion that this would
considerably reduce the safety and
the capacity of the carriageway,
thereby hampering free movement of
the thorough traffic due to parking of
vehicles on the roadsides.
Highlighting the issues and
challenges in widening NH, the CII
cited barriers such as high density
of population, restricted availability
crore. Of the 24 projects that could
be rescheduled, the prominent ones
include two projects of IVRCL, three
of Ashoka Buildcon, three of Sadbhav
Engineering and one each of GVK,
L&T and GMR. “We have to study
their requests and review it before a
final decision is taken,” said a senior
official at the NHAI.
According to the proposal
suggested by a panel headed by C
Rangarajan, Chairman of the Prime
Minister’s Economic Advisory Council,
of RoW, environmental sensitivity
and ribbon developments along
roadsides.
It is pointed out that widening of the
highway at intervals of 10 to 15 years
is not possible on account of land
acquisition issues and environmental
factors. Since the land acquisition is
a lengthy and cumbersome process,
the industry body recommended
acquisition of the necessary land in
one go rather than doing it in bits and
pieces every 10 years or so.
road developers facing a severe
shortfall on the toll they expected could
avail of the scheme. The premium
would be rescheduled in cases where
developers were unable to service
their debt, operating expenditure
and the payment of premium. If the
projected toll revenue fell short of the
cost plus premium, the government
will consider the deferred amount as
a loan to the developer; it is expected
to charge annual interest of 10.75 to
11 per cent.
The highways sector could get
a boost with government planning
to roll out a new construction and
development model that will make
it cheaper to build and operate
projects, particularly those that are
unviable under present conditions.
This modified annuity-based
model is expected to help government
move from its current dependence on
cash contracts to build highways,
owing to lack of interest by the private
sector of late, towards a workable
public-private partnership, generally
regarded as being superior.
The Planning Commission, which
has held consultations with the
National Highways Authority of India
(NHAI), state governments and the
private sector, is in final stages of
developing new model concession
agreement (MCA) that it is expected
to be launched in next two weeks or
so, said officials.
Under this new model, 50 per cent
of the project cost will be paid to the
concessionaire in the construction
period. The remaining amount will be
paid as an annuity after commercial
Even as the economic slowdown
continues to impact the otherwise
resilient operational road projects,
infrastructure debt funds are gathering
momentum given the potential of
investment in the sector, say experts.
“There is a huge potential for
investment in infrastructure projects
and we have seen interests from
both global as well as domestic
investors. Though there is a slowdown
currently, the market will pick up in
coming months,” said IL&FS Financial
Services MD & CEO Ramesh Bawa.
IL&FS has so far raised Rs 1,500
crore infrastructure debt fund and
plans to increase the total corpus to
$5 billion in the next two years.
“Many firms have already entered
the market for providing funds to
operations begin. To neutralize
inflation, interest will be based on
the applicable bank rate plus 2 per
cent. The government will also lend
some operations & maintenance
(O&M) support and the developer
could also collect a toll.
A c c o r d i n g t o t h e s e c t o r
experts, government will now pass
on critical project risks such as
design, construction, operation and
maintenance to the private sector,
but retain the financial risk in contrast
with current EPC or engineering,
procurement & construction
contracts.
This will also reduce long-term
off balance sheet commitments, as
in the case of pure annuity projects,
and enhance project viability in cases
that are otherwise not viable on
toll,” said Abhaya Agarwal, partner,
infrastructure and PPP (public-private
partnerships). “For the private sector,
it enhances bankability of the project.
It will also channelize liquidity as
50 per cent of the project cost is
recovered within the construction
period.”
infrastructure projects, primarily
road projects as we are seeing
huge investor interest not only from
domestic but also from global players
like overseas pension funds as well as
provident funds,” said India Ratings
Associate Director (infra and project
finance) Chintan Lakhani.
As per the RBI mandate,
infrastructure debt funds can invest
in roads projects only after one year
of commencement of operations.
The delay in execution of projects or
the economic slowdown is unlikely
to impact the investor sentiment
as they invest one year after the
commencement of commercial
operations of the road project,”
said Icra Assistant Vice President
Shubham Jain.
New model for road
projects on cards
Road sector to get
leg-up as infra debt funds
gain traction
Supreme Infra gets `618-cr
construction orders
5 road developers to reschedule
highway projects
Supreme Infrastructure has
secured three orders cumulatively
worth Rs 617.7 crore for various
construction works. The highest is
from the National Highways Authority
of India (NHAI) -- Rs 337-crore project
for two-laning of Chhapra-Rewaghar-
Muzaffarpur section of NH-102 in
Bihar.
The company has also received
Rs 237-crore order from the
Brihanmumbai Municipal Corporation
for improvement of various roads in
flexible pavements in Mumbai and its
eastern suburbs. Another Rs 43.7-
crore order has been secured from
the City & Industrial Development
Corporation (Cidco) of Maharashtra
for construction of a road-over-bridge
on Nerul-Uran railway line.
Railway’s research arm RDSO
is likely to issue ‘speed certificate’
soon to the much-awaited Mumbai
Metro. This will now pave the way for
the operator Reliance Infra obtaining
safety certificate from the Railways,
they said.
“The process of issuing speed
certificate for the Mumbai Metro is
almost over. The trial report is nearly
ready and we may give the clearance
to the operator of Mumbai Metro One
soon,” said sources at the Research,
Design & Standards Organization
(RDSO).
Chief minister Prithviraj Chavan
and the operator Reliance Infra have
been saying that the Metro services
will be thrown open to the public
this month-end. Mumbai Metro One
Pvt Ltd (MMOPL) is a joint venture
between Reliance Infrastructure,
French firm Veolia Transport and
the Mumbai Metropolitan Region
Development Authority (MMRDA).
After carrying out the oscillation
and emergency braking distance trials
under the monitoring of the RDSO, the
MMRDA is now undertaking proper
trial runs on the entire first phase of
the 11.4-km long Versova-Andheri-
GhatkoparsectionoftheMumbaiMetro.
Mumbai Metro may get
speed certificate soon

5. March 31 - April 06, 2014 5construction
World of Concrete India will
return to India in November 2014
at the HITEX Exhibitions Center in
Hyderabad, and is an extension of
the world famous World of Concrete
exhibition, owned and produced by
Hanley Wood Exhibitions in Dallas,
Texas, and held in Las Vegas annually.
The Indian edition is being jointly
organized by Hanley Wood, USA
and Inter Ads Exhibitions, India,
supported by the Indian Concrete
Institute (ICI). The events aim to
address new developments in
concrete and construction, especially
in the infrastructural sphere.
Concrete Show India will be held
from May 7- 9, 2015 in Mumbai at
the Bombay Convention & Exhibition
Centre. The event will showcase the
best and newest technologies in
machinery, equipment, commercial
concrete products, services and
systems from industry suppliers.
India’s Planning Commission
has projected an investment of $1
trillion for the infrastructure sector
during the 12th Five-Year Plan, with
40 per cent of the funds coming
from the private sector. It is one
of the major sectors that propel
World of Concrete India 2014
will welcome suppliers from
the commercial concrete and
construction industry in India. The
exhibition will serve as an excellent
platform for industry suppliers to
showcase innovative products, state-
of the-art technologies, latest tools
and equipment used in the industry.
I n d i a i s m o d e r n i z i n g i t s
infrastructure at a fast pace and
concrete is an essential requirement
of infrastructural development; thus
it is imperative to have such an
event which addresses the needs
of this fast expanding industry.
overall development of the Indian
economy.
In the modern infrastructural
methods, precast technology is the
most safer and durable option for
building technology than some of the
traditional methods. Pioneering use
of precast technology can change the
face of Indian economy by speeding
up the course of action across varied
proposed infrastructure projects.
Expansion of Metro and Mono railway
routes across various tier-1 cities is
one such example of implementation
of this process.
World of Concrete 2014
coming to India
Concrete Show India 2015
At present, foam
concrete is widely used
around the world for a
variety of applications
Use of foam concrete
The Holcim Awards jury North
America recognizes the broad
approach toward the seemingly
only pragmatic and business-related
question of material science in
general and the concrete production
in particular.
In a clear manner the project
extends into a number of parameters
beyond its own discipline to explain
the wide impact of the issue – the
social, financial and environmental
dimension. Even though the
concept of magnetic formwork was
questioned, the research on the
application proves a high degree of
transferability and the potential for
an effect on aesthetics in the built
environment.
Project description
At present, widely used around
the world for a variety of applications,
foam concrete’s use in North
America is negligible, particularly
in architectural applications. The
lessons and experiences descending
from the practical approach taken
in my thesis begin to answer
some common questions such as,
“what’s the matter with concrete?”
as well as hint at certain possible
solutions. Therefore, I have made it
my focus herein to extrapolate from
my exploratory findings in an effort
to progressively reconstitute the
notions of concrete.
The approach taken has been
two-fold in that my efforts explore
this material directly through a
collaborative process with engineers
to modernize its long standing
notions. Meanwhile, the latter
approach pursues its technical
implementation into an architectural
formless, and unloved. Although we
can understand the failure of utopia
in hindsight, we need to extend
the life of the material forward by
continuously transforming it such as
in the case of this thesis.
Resource efficiency
The production of cement = the
production of carbon dioxide. The
major difference between foamed
and normal concrete is that the use
Mix design samples of foamed concrete produced for the purposes of challenging the long standing
notions regarding its potential applications within the field of architecture
Edward
Schwarz
General Manager,
Holcim Foundation
for Sustainable
Construction
of aggregates in foamed concrete
is mostly eliminated and replaced
by air voids.
Since those aggregates are no
longer there neither is its weight
and all the processes related
to its production, storage and
transportation. The reduction of
cement content to 40% via the use
of slag and fly ash serves to further
benefit t this planet.
Economic performance
In trading the costs associated
with aggregates for the cost of a
foam generator and foam agent, we
notice large financial savings. The
cement content reduction within any
mix design, while maintaining the
same outcome standards is another
economic value. The two forming
ideas suggested herein focus on the
reuse of fabric as a forming material
for economic, environmental and
operational benefits.
Aesthetic impact
The magnetic concept relies
on expanding the function of the
rebar mesh or cage to more than
just mere reinforcement. Here the
reinforcement also acts as the
framework for the form itself. This
method would introduce precise
points of contact or a point cloud
for the desired shape within the
framework for the fabric.
Minimal assembly components
remain in the concrete since the
connecting surface for the magnets,
removable frame with the clamps
and fabric materials are recovered
for later reuse.
application by means of a design
through making process which is
continuously informed by the lessons
of this material.
Ultimately two main forming ideas
are explored whereby the main
constraints include producing two-
sided panels while not piercing the
fabric which sustains them during
their liquid state.
New processes offer elevation of
the art of architecture: more control,
higher quality, and improved features.
To do so, we must look deeper into
what lies beyond mere appearances
to see how we do things, not merely
what they look like.
Gravity and hierarchy no longer
dictate all processes. We must forge
general and project-based relations
with those whom architecture has in
the past avoided, not only contractors,
but also product engineers and
materials scientists.
Innovation and
transferability
Working with academic and
industry engineers I was able to
achieve a mix design (750kg/m3)
composed of 2 parts cement, 1
slag, 1 fl y ash and 1sand. This
mix design takes the content of
cement down from 100 per cent
to 40 per cent and surpassing its
predecessor’s compressive strength
while maintaining the durability,
fire/frost resistance, as well as,
thermal and acoustic insulation.
The engineering department at
the University of Toronto has since
undertaken this research with the
help of industry partners.
Social equity
Mass consumption of concrete
possesses the power to encourage
social progress on a global scale.
This utopian vision was embodied
in the modernist buildings formed
in concrete during the 20th century.
The failure of that has left many with
an image of concrete as cold, hard,

6. March 31 - April 06, 2014 6PROJECTS UPDATE
Cidco might start fresh land
acquisition process
for new intl airport
The state-run City & Industrial
Development Corporation (Cidco),
nodal agency for the Navi Mumbai
international airport, will have to start
afresh the land acquisition process
for 271 hectares under the Right to
Fair Compensation & Transparency
in Land Acquisition, Rehabilitation
& Resettlement Act, 2014, if the
villagers opposing the acquisition fail
to come on board.
This is necessary as the validity of
the notices served in phases under
the Land Acquisition Act, 1894, to
the project affected persons (PAPs)
in 2012 would be over in July.
Cidco would have to serve new
notices for the acquisition of 271
hectares of private land from six of
the 17 villages under the Right to
Fair Compensation & Transparency
in Land Acquisition, Rehabilitation &
Resettlement Act, 2014.
PAPs from these villages are
opposed to land acquisition and
they have refused to accept the state
government’s compensation package
announced in November last year.
According to the provisions of the
new act, land acquisition would be
possible only after seeking approval
from 70 per cent of the PAPs.
Besides, under the new act,
the compensation to PAPs would
be four times of the prevailing
market rate. Of the total area of
2,268 hectares proposed for the
aeronautical and non-aeronautical
works, 1,572 hectares is already in
Cidco’s possession.
Of the 2,268 hectares, the core
airport area would be 1,160 hectares.
Despite several rounds of negotiations
with villagers, Cidco is yet to acquire
271 hectares required for the core
airport area.
PAPs last week held marathon
meeting with the Cidco management
reiterating their opposition for land
acquisition and the compensation
package. Cidco on February 5 has
floated request for qualification and
the bidders will have to submit it till
June 18 this year.
Cidco Vice Chairman & Managing
Director Sanjay Bhatia said, ‘’Our
efforts are on to convince the PAPs
that the compensation offered by
the state government is quite higher
than what they will get as per the
provisions of new act. As per the
government package, PAPs will get
22.5 per cent of developed land for
every hectare of land acquired. They
will be provided one floor space index
(FSI) for 12.5 per cent of developed
land and 2.5 FSI for another 10
per cent. Further, the PAPs would
get three times more land to the
current residential plot they occupy.’’
Bhatia reiterated that government’s
compensation is at a higher side.
However, he clarified that PAPs have
an option to go for compensation
under the new act.
Bhatia said that Cidco is currently
engaged in the joint surveys of the
villages and hoped that it will be in
a position to acquire 271 hectare by
end of July.
Mahendra Patil, sarpanch of
Pargaon, one of the villages from
where the land acquisition is yet to be
done, indicated that the villagers are
not in a mood to relent, but continue
their opposition to the Navi Mumbai
international airport. He informed
that retired judges PB Sawant and
BG Kolse Patil have extended their
support to their cause.
Fresh bids likely for
cancelled road projects of 2,500 km
Projects to build 2,500 km of
highways – a large part of which
were awarded in the third year of
the UPA-II regime — have been
cancelled. The National Highways
Authority of India (NHAI) awarded
most these projects in 2011-12. In
the subsequent years -- 2012-13 and
2013-14 -- because of the economic
slowdown, firms did not respond
to many bids that were floated by
the NHAI.
The projects that have been
cancelled include Jabalpur-
Lakhanadon (originally bagged
by Ganone Dunkerley), Vadodara-
Surat including Narmada bridge
(HCC), Lucknow-Sultanpur (Essar-
Atlanta), Hospet-Bellary (PNC-Betul),
Karnataka-Kerala border–Kannur
(Transtroy), Angul-Sambalpur
(Abhijeet), Jabalpur-Katni-Rewa
(Soma Tollways) and Raipur-Bilaspur
(IVRCL Assets).
“Some 23 projects — most of
which were awarded in 2011-12 —
have been cancelled, foreclosed or
terminated because of developers
not paying performance guarantees
or due to delays in land acquisition
or environmental clearances. Two of
the cancelled projects have been re-
awarded,” said an NHAI official.
Fresh bids for such projects
can be invited only after an inter-
ministerial body — the public-private
partnership appraisal committee
— revises the costs upwards taking
into account the inflation since the
time the project was awarded. The
list of cancelled projects is likely to
get longer, say the NHAI and industry
sources.
This is because many road
developers who have not yet started
working on projects awarded two-
three years ago are yet to take a
clear stance on whether they will
continue or surrender the projects
after evaluating the premium re-
scheduling proposal. But the
proposal, which was approved
recently, does not have enough to
turn these projects viable.
IL&FS Financial Services expects
to close $1 billion of its targeted $5
billion infrastructure debt fund by
September, a top company official
has said.
IL&FS Infra Asset Management,
which manages the infrastructure
debt fund, has targeted an initial
corpus of around $1 billion and hopes
to increase the overall corpus to $5
billion under management in the
medium-term.
“There is an adequate interest
from both domestic as well as global
investors for investing in infrastructure
projects in India. We are confident of
completing the raising of $1 billion in
the next 6 months,” said company’s
Managing Director & CEO Ramesh
Bawa.
The company has so far raised Rs
750 crore and expects to raise another
Rs 750 crore by March 31.
“By March 31, we would have
raised nearly Rs 1,500 crore, which is
from the domestic investors. However,
in the next six months, we are confident
of meeting our $1 billion target and we
expect good response from global
investors as well,” he said.
The firm has pooled in funding
from at least five PSU insurance
companies, including General
Insurance Corporation of India, Oriental
Insurance, United India Insurance,
New India Assurance and National
Insurance, which will together pick 2
per cent stake each in the company.
IL&FS has also tied up with public
sector lenders like Allahabad Bank,
Bank of India, Canara Bank, Central
Bank of India, Indian Bank, Indian
Overseas Bank, Oriental Bank of
Commerce and UCO Bank for picking
up stake in the firm.
“This move will provide confidence
to overseas investors, especially
foreign pension funds and insurance
companies, which can participate
in the fund. We are already in talks
with Japanese, Australian, Chinese
and Canadian firms for investment,”
he said.
Bawa said the company is likely to
formalize partnership with Japanese
and Chinese firms post elections.
The $1 billion would be used for
funding projects in power, ports,
road, healthcare, education and other
sectors.
IL&FS to raise $1 b for
infra debt fund by Sept
Centre may seek funds
to develop 2 major ports
in WB, AP
CCEA okays `224-cr support
for dredging project
at VOCPT
The Shipping Ministry may seek
funding support for two major ports
to attract more developers and is
likely to approach the Cabinet on
the issue. The government has
finalized Sagar (West Bengal) and
Dugarajapatnam (Andhra Pradesh)
as two sites for setting up of the
ports.
“At the Sagar port there is also a
proposal to build a rail bridge which
means that the rate of return for that
port will be about 8 per cent. So
without VGF (viability gap funding),
participation of bidders is an issue,”
said a Shipping Ministry official.
“Also, at the Dugarajapatnam Port
the rate of return is 18 per cent without
the cost of land and therefore we are
exploring the option of VGF,” said the
official, adding that we will go to the
Cabinet soon with the proposal.
VGF is a form of government
support which is extended to those
projects that are economically justified
but fall short of financial viability due
to their longer gestation periods or
other factors.
Last month, Shipping Minister G
K Vasan had said that the initial bids
for the Sagar Port will be invited in a
couple of months, whereas land for
the Dugarajapatnam Port has been
identified.
The government in 2013-14 fiscal
(till January) had awarded as many as
30 port development projects under
the PPP (public private partnership)
mode, entailing total investment of Rs
2,07,089 crore.
The total capacity of these projects
is 217.57 million tons per annum. In
the past four years, government had
approved 88 new projects, entailing
investment of Rs 42,953 crore and a
capacity addition of 558 million tons
per annum.
A port with two or more berths and
facilities and equipment, capable of
discharging 1,00,000 tons of cargo
per month from ocean-going ships,
is defined as major port.
The Cabinet Committee on
Economic Affairs (CCEA) has
approved a budgetary support of
Rs 224 crore for dredging purpose
at V O Chidambaranar Port Tuticorin
(VOCPT) in Tamil Nadu.
The CCEA has approved the
grant of budgetary support of Rs
224 crore for the project “dredging in
front of North Cargo Berth-II and two
numbers of shallow draught berths
at V O Chidambaranar Port,” said a
government source.
The total cost of the project is
estimated at Rs 448 crore, inclusive
of dredging cost, mobilization and
de-mobilization charges, service
tax and contingencies. The project
duration is nine months from the
date of award of work. The source
said the CCEA has approved only 50
per cent of the total project cost.
The project is part of government
initiative to boost cargo handling
capacity at major ports in India. Last
year, VOCPT handled cargo capacity
of 28.26 million tons, as against its
total capacity 33.34 million tons. The
port is projected to handle about
41 million tons during 2014-15 and
59 million tons by 2020, the source
added.
The V O Chidambaranar Port
Tuticorin (VOCPT) is one of the
12 major ports in the country. It
is situated on the south-eastern
coast in Tamil Nadu. Other major
ports include -- Mumbai, Jawaharlal
Nehru Port Trust, Kolkata (with
Haldia), Chennai, Visakhapatanam,
Cochin, Paradip, New Mangalore,
Marmagao, Ennore and Kandla.

7. March 31 - April 06, 2014 7INFRASTRUCTURE
Strategic projects to spur infra investment
Nations across the
world represent
the full spectrum of
national ambitions
and strategies for
dealing with expensive
infrastructure
requirements necessary
to facilitate future
economic growth
(Part 6 Final)
Russia
Russia is focusing on readying $50
billion in facilities and public works for
the 2014 Sochi Olympics, including
airport and railroad terminals, and
hundreds of miles of new roads. But
officials vacillate on moving ahead
with desired high-speed rail projects,
lacking the money.
President Vladimir Putin would like
to redirect $3.3 billion in overseas
investments from the country’s
sovereign wealth fund into bonds
that would back domestic projects
building roads, bridges and ports,
as much of Russia’s transport
infrastructure dates from the Soviet
era and badly requires overhauling.
Turkey
Turkey is increasingly taking
advantage of its strategic crossroads
position in energy markets between
European consumers and Middle
Eastern/Russian gas producers,
which helps boost the economy.
The country is undertaking a
host of major projects to deal with
road congestion, including a high-
speed rail link between Istanbul and
Ankara, completion of a third Istanbul
airport, a new tunnel under and a
third bridge over the Bosporus Strait,
and numerous port and power plant
initiatives.
The government is looking to
attract private capital through PPP
structures focusing on privatizing
ports and airports, including
greenfield projects.
Africa
Across Africa, substandard
infrastructure constricts growth by
as much as 2 per cent annually.
Estimates peg the continent’s
annual infrastructure funding gap
at anywhere from $30 billion to $90
billion. The lack of safe drinking water
and a huge power deficit continue to
hamper economic development.
But investors may be lured
by favourable demographics,
improvements in some nations’
political and regulatory environments,
and the promise of the continent’s rich
natural resources.
Although the global financial
crisis recently dampened offshore
interest, China is continuing to partner
opportunistically with mineral-rich
countrieslikeNigeria,AngolaandKenya.
The Asian powerhouse is using its
own contractors to build new roads,
rails and port facilities, with the goal
of speeding shipments of various
precious metals and commodities
destined for manufacturing centres
back in China.
Angola, Nigeria and Ghana have
established sovereign wealth funds
to finance projects, while Namibia
and Cameroon make infrastructure
funding high priorities in long-term
planning.
In 2012, South Africa launched
a $430 billion (R4 trillion), 15-year
national infrastructure plan with 18
specific integrated strategic projects
for transport, energy, water and
sanitation. Since the government
has limited capacity to support
these projects, many will depend on
uncertain foreign financing.
The Arab Spring likely will deter
foreign investment temporarily in
other countries on the northern edge
of Africa, like Egypt and Libya, until
political stability returns.
Middle East
Led by oil-rich Saudi Arabia and the
United Arab Emirates (UAE), countries
that make up the Gulf Cooperation
Council (GCC) are spending rapidly
on infrastructure to modernize and
help diversify their heavily dependent,
hydrocarbon-based economies and
deal with parched desert climates.
Other GCC members include
Qatar, Oman, Bahrain and Kuwait.
In this part of the world, money and
private financing requirements simply
do not present the same hurdles as
elsewhere. Priorities concentrate on
building desalinization plants and
delivery of water supplies, developing
the potential for solar power to support
growing populations, and connecting
primary cities with modern roads and
rail systems.
A $25 billion GCC pan-Gulf rail
network should be completed by
2017, extending nearly 1,300 miles
through six countries. Other efforts in
the UAE work to drive up tourism and
gain revenues from conferences and
other events.
Americas
From north to south, the
Americas represent the full spectrum
of national ambitions, struggles,
strategies and approaches for dealing
with challenging and expensive
infrastructure requirements necessary
to facilitate future economic growth.
Canada is successfully deepening
its use of public/private partnerships
to help finance and build a range
of transportation, water-sewage
treatment, and social infrastructure
projects, offering a body of experience
that the United States could adapt to
its own financial, jurisdictional, and
political setting.
Both Canada and the United States
need to retool aging road networks
and advance mass transit projects.
United States
Budget constraints and a lack of
consensus regarding the federal role
in key infrastructure sectors “present
an [ongoing] challenge” in trying to
water treatment plans need upgrading
or replacement.
With Build Canada expiring in
2014 and the country’s fiscal outlook
tempering, leaders and infrastructure
players are focusing on next-phase
actions to maintain momentum in
addressing pressing civil infrastructure
needs, which total well over $167 billion
(C$170 billion) by some estimates.
PPP Leadership
Canada’s high standing as
an exemplar of best practices for
executing PPPs stems from “a
certainty of process.” Governments
have developed a “sophisticated
understanding about how and when
to use the tool and whether or not to
employ user fees.”
They drive very competitive
procurement bidding, giving
private operators confidence about
“schedules for what will come to
market.”
The federal government’s PPP
Canada—a crown corporation
established in 2009—also has gained
a foothold, “really starting to exert
authority” by providing expertise
to help smaller provinces and
municipalities gain traction on PPP
procurement and leverage federal
dollars to best advantage, especially
on smaller projects like water and
wastewater facilities.
Priorities
Major projects are advancing from
coast to coast, including a new bridge
linking Canada to the United States.
Canada is footing the $3.8 billion
bill for a much-needed new six-lane
international bridge with expanded
capacity between Ontario and Detroit,
Patrick Phillips
CEO, Urban Land
Institute,Washington
Howard Roth
Global Real Estate
Leader, Ernst & Young
plan for public investment. Some
progress came with the passing of a
federal transportation reauthorization
bill, but the legislation’s two-year time
horizon means that thinking about the
next one will need to start right away.
With federal infrastructure
contributions holding steady and
with declines generally expected,
especially as the sequester takes hold,
most state and local governments are
moving into a “a self-help” mode—they
must rely more heavily on alternative
funding sources and postpone some
desired projects.
“It’s hard to scrape together new
infrastructure money” at a critical time
when many systems are reaching the
end of their lifecycles. Infrastructure
spending as a percentage of GDP has
shrunk to about 2.4 per cent from its
peak of more than 3 per cent during
the 1960s.
States and local governments
account for about 75 per cent
of all infrastructure spending,
including capital and operations
and maintenance, with the federal
government contributing the remaining
quarter of infrastructure spending.
In 2012, Congress enacted
new authorizing legislation for
transportation. The new bill, Moving
Ahead for Progress in the 21st Century,
requires performance measures,
consolidates numerous highway and
mass transit programs, allocates $1
billion for projects of national and
regional significance, and expands the
popular Transportation Infrastructure
Finance & Innovation Act (Tifia)
credit-support programme. The Tifia
programme has a lending capacity of
$750 million in FY 2013 and $1 billion
in FY 2014, representing about $17
billion in lending capacity, but funding
has been slow to go out the door.
Canada
Over the past decade, Canada has
made shoring up aging infrastructure
systems a top priority. The country’s
$32.5 billion (C$33 billion) federal
Build Canada Plan and highly
effective implementation of PPPs at
the provincial level have been hallmark
efforts.
A recent report card from the
Canadian Construction Association,
however, points to significant
remaining needs, noting that half
the nation’s municipal roads require
substantial repairs and a quarter of
GCC Railway Network, Gulf Lagos, Nigeria
the primary road-crossing for trade
into the United States. Construction
could start in 2016.
(Concluded)
(Courtesy: Ernst & Young)
AnkaraAirport,Turkey
Peace Bridge, Canada Highways, USA Winter Olympics 2014, Sochi, Russia

8. March 31 - April 06, 2014 8
Oberoi settles Tata Steel plot
for `1,155 cr
Oberoi Realty has emerged the
highest bidder for Tata Steel plot in
Mumbai at Rs 1,155 crore, beating
the second highest bidder by Rs
5 crore. Although some sources
claimed the second-highest bidder
could be Kalpataru or Lodha Group,
it could not be confirmed. Among
others in the race were Tata Housing
and Peninsula Land.
Tata Steel stated, “The committee
of independent directors appointed
for the oversight and governance of
the sale process by the Tata Steel
board declared Oberoi Realty as
the highest bidder of the auction
on the basis of their final bid of Rs
1,155 crore, after several rounds of
bidding.”
The reserve price was fixed at Rs
750 crore for the e-auction which
began at 11 am and concluded at
7 pm on March 25, sources said.
The auction was managed by global
property consultant Knight Frank.
At a floor space index (FSI) of 4.7
million sq ft, it works out to Rs 2,455
a sq ft. However, the deal will be Rs
4,000 per sq ft, including the payouts
to government, according to a realty
consultant. FSI refers to permissible
construction on a given plot.
Late last year, Dilipkumar Lakhi,
a diamond merchant and the city’s
highest individual taxpayer until a
couple of years ago, bought Cadbury
House, the India headquarters of
Mondelez, for Rs 350 crore. The
REAL ESTATE
Brand loyalty is certainly
not missing in realty.
This is amply evidenced
by the fact that certain
brands command
instant attention
PuneVille will be
PCMC’s most
outstanding statement
from the perspective
of environmental
sustainability
It is often assumed that property
buyers are more focused on budget
than brand value. This is a glaring
miscomprehension of the ground
realities -- in fact, few consumer
classes are as attuned to the value of
a brand than Indian homebuyers.
PuneVille, an ultra-exclusive luxury
residential township by Pharande
Spaces at Punavale, is the latest real
estate investment hotspot in Pune’s
burgeoning Pimpri-Chinchwad
Municipal Corporation. The project
will be constructed on a generous
40-acre plot and will offer every
luxury and convenience of modern
life to its residents. The project has
been conceived to stand head and
shoulders above the rest.
This unique luxury project has
been conceived by Aedas, the global
award-winning architects who have
master-minded Venetian style hotels
in Las Vegas and Macau, as well as
the Financial Centre in Shanghai and
Marina Bay Sands in Singapore.
Aedas ranks second among the
world’s top architectural firms and
of change will always be the media.
Unfortunately, the media has made
it its business to portray the entire
real estate domain in a negative and
mercenary light.
Force to reckon with
The real estate industry is
becoming a force that even global
players are beginning to take very
seriously. This change will become
more pronounced as more and more
serious players come to the fore-
front of the sector.
We are already witnessing a
process of consolidation wherein
smaller players are merging with or
selling their stakes to bigger names,
since these banners of repute are
able to sustain their businesses as
a result of their larger market share,
higher credibility quotients and their
superior funding options.
Not surprisingly, many people
continue choosing real estate as
a career because the business is
based on the strongest possible
fundamentals. With the rapidly
improving transparency norms and
considerable success of reputed
developers despite the challenging
economic environment, it makes
a lot of sense for qualified people
to choose top-rate real estate
companies as their career partners
and be part of the great real estate
movement.
Moreover, developers have been
responding to this trend by making
best practices in their offerings as
well as business operations as an
integral part of their manifesto.
In most of our cities, reputed
developers have maintained
consistency in these aspects and
are even raising the bar on best
practices in construction design,
quality and business transparency.
This focus is a natural consequence
of the need to remain relevant in a
highly competitive market.
Even in smaller cities such
as Pune, quality developers are
will bring its full expertise to bear on
PuneVille. It is a leading international
design firm which specializes in
blending architecture, interior design,
landscaping and overall project
concepts into cohesive and stunningly
compelling masterpieces.
PuneVille is not only a marvel of
modern architectural and lifestyle -- it
is actually based on the firm’s deep
study of the location’s geographic,
climatic and environmental profile.
This has given rise to a luxury living
community which is not only the
ultimate statement in modern living,
but also completely in harmony with
its surroundings in every respect.
Luxury resort theme
The first phase consists of 16
towers, each with 23 storeys of
exclusive and uniquely crafted
living spaces. The entire project
has been designed with a luxury
resort theme. Every unit is uniquely
crafted, provided with the highest-
quality imported fittings, fixtures and
marble flooring as well the top Indian
brands.
PuneVille will incorporate an
international school, a state-of-the-
known for the higher grade of
their deliverables on the market.
This explains why certain brands
command a greater degree of trust
among consumers than others.
Necessary need
The fact is that real estate as
a business, from construction to
marketing of the end product, is
one of the strongest contributors
to the country’s GDP. Real estate
fulfils a very necessary need, as
is evidenced by the unrelenting
demand for homes all across the
country.
art hospital and well as high-end
commercial office spaces. This
township is going to be among the
best in the country and incorporate
every conceivable luxury feature,
including a Olympic-size lagoon
shape swimming pool, club house,
restaurant, landscape garden, tennis/
multi-use court, lush lawns, joggers
track, children’s’ play area, serene
and spacious water bodies, and
a walkway at a height of 22 feet,
connecting all the residential towers
to the central common amenities.
Perfect location
The town of Punavale is the
perfect location for such a unique
luxury offering. It is in the very heart
of the Pimpri-Chinchwad Municipal
Brand loyalty is certainly not
missing in realty. This is amply
evidenced by the fact that certain
brands command instant attention
while others do not even register on
buyers’ radars unless questionable
marketing ploys such as marked-
down rates in exchange for inferior
quality and location come into play.
Home buyers are very aware of
the fact that some developers can be
expected to deliver on their promises,
while others represent a potentially
costly gamble. This is also why the
more reputed developers have no
problems with obtaining domestic
as well as international institutional
financing for their projects.
Nevertheless, the image that has
been created about the real estate
sector in general is a persistent one.
When it comes to changing public
perception, the primary instrument
The value of brand
Pune’s hotspot township
Corporation, and just 1 km from
Wakad. Punavale provides easy
access to Aundh, Baner, the University
Circle and Hinjewadi, home to Pune’s
largest and most vibrant IT park, as
well as to Lonavala and Mumbai via
the expressway.
In fact, PuneVille is a mere
five minutes’ drive to the Pune-
Mumbai Expressway via a specially
constructed 700 meters access road.
Likewise, Hinjewadi will be brought
even closer via the proposed road
which adjoins the project. Immediate
access to the proposed 6-lane road
to Baner will bring the Queen of the
Suburbs, along with all its shopping
complexes, hospitals and leisure
outlets within easy reach.
On a macro level, the PCMC
region is poised for a quantum
upgrade in its economic profile, with
in excess of 6,000 new white collar
jobs to be created over the next few
years, 36 new educational institutes
coming up and major hospitality
giants such as Taj Gateway, JW
Marriot, Smart Inn, Le Royale, Lemon
Tree, St. Laurn and Sayaji delivering
the final vitalizing boost.
Environment appeal
PuneVille will also be PCMC’s
most outstanding statement from
the perspective of environmental
sustainability. The project has
already been awarded a 4-star
pre-certification from Griha -- one
of the leading sustainability rating
agencies in the country. With the
rapidly increasing interest for ‘green
living’ among Pune’s most discerning
home buyers, we could do no less
than ensure that PuneVille takes a
leadership position on this front.
one-acre property, with 90,000 sq ft
of saleable area, is on Peddar Road
in south Mumbai.
Recently, the National Centre
for Performing Arts, the cultural
organization set up by JRD Tata and
Jamshed Bhabha, had put the iconic
Bhabha Bungalow in the city on the
blockforareservepriceofRs257crore.
The US-based banking major
Citibank plans to sell Citi Centre, its
erstwhile headquarters in the tony
Bandra-Kurla Complex (BKC). The
eight-storey building, with about
90,000 sq ft of space, is expected
to fetch about Rs 300 crore, as
BKC commanded a price of about
Rs 30,000 per sq ft, according to
consultants.
Arvind Jain
Managing Director,
Pride Group
Anil
Pharande
Pharande Spaces,
Pune

9. March 31 - April 06, 2014 9
Terex Washing Systems (TWS)
hosted a USA premiere of the Terex
Aggresand wash plant in North
Carolina, USA, following the huge
success with the Ireland launch
last year. The event took place
at the Carolina Sunrock facility in
Kittrell, North Carolina, where TWS
worked with Mid-Atlantic distributor,
Powerscreen Mid-Atlantic, to stage
the 3-day event.
Sean Loughran, Director of
TWS, commented, “This is the
first machine of its kind in this
market and the interest has been
phenomenal. The event has proved
to be a real success and we are
already witnessing increased activity
in this marketplace.”
The Aggresand concept, the
newest modular aggregate and sand
washing plant, was introduced to the
world of aggregate washing late last
year. The Aggresand plant showcased
at Kittrell, NC, featured a 200tph twin
sand plant compared to the first
Aggresand plant launched in Ireland,
which had 120tph twin sand plants.
TWS can offer two sand plant options,
120tph or 200tph, dependent on the
customer’s application and the sand
to stone ratio. The modular wash plant
brings together aggregate and sand
washing on one modular chassis,
producing three aggregates and two
types of sand on one machine.
Sunrock Quarries willingness to try
innovative products and processes,
coupled with TWS distributor,
Powerscreen Mid-Atlantic, afforded
TWS the opportunity to host the
event. The local geology of Sunrock
Kittrell Quarry is granite, which made
the demonstration more significant,
since high wear issues are more
prevalent in this situation. Poly
screens were opted for in place of
the typical woven wire screen mesh
and the Aggresand™ wash plant was
more than capable of dealing with
this raw material.
More than 45 TWS distributors
and more than 150 customers from
throughout America attended this
exclusive event, where they saw for
the first time ever a live demonstration
of the Aggresand wash plant. Elaine
Donaghy, Marketing Manager
of TWS, commented, “The USA
premiere of the Aggresand wash
plant proved to be another successful
showcase. Reaction to the new plant
was exceptional and we received
immediate orders as a result. The
Aggresand wash plant is proving to
set TWS apart from other providers
in the market and is revolutionizing
the wash plant market by introducing
innovative solutions and continuing
to serve our customers’ needs and
demands around the world.”
This system sets itself apart
from the competition by combining
aggregate washing and screening
with sand processing on a modular
chassis. Garry Stewart, Applications
Engineer with TWS, commented,
“The market is really embracing the
Aggesand concept with extensive
orders following the show. Feedback
from customers suggests that
acquiring planning for these modular
set-ups is easier compared to large
static installations. The rapid set up
time, high levels of serviceability
and the advanced control system
are also proving major hits with our
customers.”
Mark Keenan, Sales Manager,
P o w e r s c r e e n M i d - A t l a n t i c ,
commented, “We at Powerscreen
Mid- Atlantic Inc, were happy to
be able to showcase the new Terex
Aggresand™ wash plant here in
North Carolina and we appreciate
all the assistance our good customer
Carolina Sunrock provided to help
realize the event. I believe the
Aggresand™ plant will be a very
popular machine in the U.S. market.
The ease of setup and installation,
due to its modular design, enables
us to provide the customer with a
complete turnkey solution, which
can be moved from one site to
another in a short space of time.
EQUIPMENT
Silvennoinen to head Metso’s
Services business line
in mining, construction
as of March 26, 2014. Juha has
made a long career in ABB where he
has held several executive positions
in various businesses. In his last
position at ABB he was responsible
for motors and generators business
unit, which employs some 16,000
people globally.
In addition to his role as President,
Juha will also be responsible for
development of Metso’s overall
services business and strengthening
synergies and realizing business
opportunities within Metso’s services
businesses.
“Metso is the leading services
provider for the global mining and
construction industries. Services
business counts for more than 50
per cent of our net sales and we
want to further develop and grow
the business through stronger co-
operation across our businesses.
Juha will have a key role in this
development”, says Matti Kähkönen,
President & CEO, Metso.
“ W e u t i l i z e o u r d e e p
technological and process know-
how to deliver intelligent services
solutions designed to make a real
and sustainable difference to our
customers’ businesses over the
life cycle of their equipment and
processes”, he adds.
TWS introduces Aggresand
System for US market
Juha Silvennoinen has been
appointed President, Services
business line in Mining & Construction
Metso presents
redesigned Nordberg
CVB screen
Metso presented a renewed
Nordberg CVB inclined circular motion
screen, the latest development in
cost-efficient screening technology.
The name of the acclaimed screening
range remains the same, but the
design has been changed to include
more features and generate even
more benefits to our customers who
are always aiming for maximum plant
availability, lower operational cost, and
more flexibility to better follow market
trends.
Safer, faster maintenance: Safe
working environment is a priority to
Metso. Therefore, an industry-leading
safety level is a standard feature in
Metso equipment. That’s why the
new Nordberg CVB screen offers the
most comfortable space between
the decks in the category of inclined
circular motion screens. A large space
lowers the risk for injuries and makes
the replacement of screening panels
quicker.
To increase safety even further, the
Nordberg CVB screen is also equipped
with coil spring covers to minimize the
risk of pinching accidents, and rubber
stabilizers, high-safety belt guards and
one centralized, conveniently located
greasing manifold.
In addition, the wear protection
liners are bolted on, which makes them
safe, easy and fast to replace unlike
the glued rubber liners found in similar
screens on the market.
Less downtime: The vibrator,
structural design and wear protection
of a screen are the three areas most
likely to cause serious trouble.
MV vibrators: The Nordberg CVB
screen is fitted with the renowned
Metso MV Modular Vibrator, which
features the most advanced, dust-
proof cartridge design ever seen in a
vibrator. Because of their dual bearings,
the MV vibrators are very durable.
Structural design: The weld-
free side plates of Nordberg CVB
ensure optimal durability and a high
stress tolerance. The screen also
includes weld-free cross members that
drastically increase its lifetime under
fatigue and allow for more tonnage.
Maintenance-friendly wear
protection: The feedbox and discharge
spouts of the screen are protected with
Metso’s Trellex(TM) modular wear and
impact resistance rubber linings. Easy
maintenance and quick replacement
of screening media, wear liners and
spare parts let you maximize uptime
and improve the profitability of your
production.
Volvo Safety Award creates
safer quarries in Malaysia
Volvo Construction Equipment
(Volvo CE) has, in cooperation with
the Malaysia Quarries Association
(MQA), initiated the industry’s first-
ever safety award in order to improve
safety awareness among employees
in Malaysian quarries.
Mining and quarrying are potentially
dangerous working environments and
safety should always be an integrated
part of the daily work schedule.
Unfortunately this is not always the
case. Many quarry workers are injured
– or even killed – in work-related
accidents every year. Volvo CE –
global manufacturer of construction
equipment for the quarrying industry
around the world – is dedicated to
improving the safety of its users by
promoting best practices.
This year, Volvo CE in Malaysia has
launched the country’s first-ever safety
awards program – the Volvo Safety
Award – to recognize companies
in the Malaysian quarrying industry
that have made a strong contribution
towards improving the safety of their
employees and work practices.
“Each accident is a tragedy and it
is extremely frustrating to know that
these accidents could be prevented
with a more structured workplace and
a different mind-set,” says Brandon
Ross, Business Director at Volvo CE
in Malaysia. Ross wanted to utilize
Volvo CE´s strong safety reputation
(L-R): Dato’ Sri, QC, President of the Malaysian Quarry Association; Dr James Dawos Mamit, Dy Minister of Natural Resources & Environment;
Brandon Ross, Business Director Volvo CE in Malaysia; and Srinivasan Kathiresan, Quarry Manager at Lafarge Aggregates and winner of the
inaugural Volvo Safety Award
in order to increase safety awareness
within Malaysia.
The inaugural Volvo Safety Award
ceremony took place during the
MQA’s annual dinner in Kuala Lumpur
with more than 400 guests, including
customers, operators, quarry owners
and other industry representatives as
well as the Malaysian Deputy Minister
ofNaturalResourcesandEnvironment,
Dr James Dawos Mamit.
Winner of the first prize at the 2014
Volvo Safety Awards was Lafarge
Aggregates, a company that has
demonstrated how a remote greasing
functionality on its crushers, mixers
and conveyers has helped to eliminate
dangerouselementsindailyoperations.
We feel like Terex Washing Systems
has really set themselves apart from
the competition with the modular
concept and quality design. We look
forward to installing their products
with many of our customers.”

10. March 31 - April 06, 2014 10REAL ESTATE
The concept of luxury
has definitely changed
dramatically over the
years, and this holds
true for luxury homes
as well
Changing panorama
of luxury homes
Tata Housing to invest `700 cr
in Chennai housing
Mumbai property sale registrations up 0.06 pc in Feb
For a country which was in the past
largely referred to in context with high
poverty levels, India has come a long
way by emerging as a resilient market
for luxury housing. Of course, this is
not a uniform phenomenon, and the
demand for luxury housing in India
varies according to cities. Even the
definition of ‘luxury’ changes as we
look into various parts of the country.
For example, a two-bedroom
apartment in a central location in
Mumbai, Pune, Bengaluru or Gurgaon
is often sold and bought as a luxury
unit simply because of the profile of the
location. As such, inherently valuable
locations such as Cuffe Parade, Worli
and Lower Parel in Mumbai and
Sahakar Nagar, Bund Garden Road,
Boat Club Road, Kalyani Nagar and
Koregaon Park in Pune are seen as
luxury locations. This has some merit,
but is by no means all that there is to
luxury housing in India.
Realty major Tata Housing will
invest over Rs 700 crore to develop
a housing project in Chennai. The
company would develop 1,600 flats,
spread over 15 acres. The company
said in a statement that its subsidiary
Tata Value Homes would develop the
affordable housing project under the
brand ‘New Haven’.
“Tata Value Homes launches
New Haven at Mambakkam with an
investment of over 700 crore,” added
the company. Tata Housing had
formed Tata Value Homes in 2010 to
build value and affordable housing.
“With the ever-growing appetite for
affordable residences with premium
facilities in India, the launch of New
Haven in Chennai is in line with our
expansion plans of this pan-Indian
brand across top 8 cities in India,”
said Tata Housing Managing Director
& CEO Brotin Banerjee.
This is the fourth project under this
brand. The other three are at Boisar,
Bengaluru and Ahmedabad. Tata
Property sales registrations in
Mumbai remained at 4,858, up a
mere 0.06 per cent year-on-year
in February 2014. On a month-on-
month basis, the registrations have
suffered a decline of about 11.4 per
cent in February, but numbers are
still holding strong compared to
2012 and 2011, suggesting buyer
sentiment towards Mumbai property
market is stabilizing. There seems
to be a slight upswing in property
buying sentiment in Mumbai in the
last two months, as the registration
numbers have shown improvement.
January numbers at 5,483
were much higher compared to
While there is still a focus on
spacious living, there is an
increased accent on ‘smart home’
accoutrements, high-end common
amenities and technologically evolved
security. These were certainly not
factors which went into the definition of
luxury living a couple of decades ago.
Value Homes has introduced two pan-
India brands -- Shubh Griha (value
homes) and New Haven (affordable
homes). Tata Housing is a subsidiary
of Tata Sons Ltd which holds 99.86
per cent stake in the realty firm.
The company is developing 70
million sq ft of area and an additional
19 million sq ft is in the pipeline. It is
offering products ranging from Rs 5
registrations seen in January of 2012
and 2011. For the full calendar year
2013, property sales registrations
were up 3.5 per cent to 64,087 on a
year-on-year basis.
Developers have been saying that
the property registration numbers
have been comforting, as there
is no major fall in the figures. In
December 2013, 6,916 property
sales registrations were made,
highest compared with the same
period for the last three years.
Traditionally, the December
registration numbers are higher,
as customers rush to register their
properties before the ready reckoner
Opulent living
A more precise definition of luxury
housing in India is housing which
offers opulent living spaces and ultra-
modern luxurious amenities. Such
projects may or may not be centrally
located. In fact, such luxury projects
can offer a more evolved luxury
experience, since developers do not
have to invest in cost-intensive land
and can concentrate on supplying
luxurious experience to buyers.
The most responsive markets for
luxury housing in India are Mumbai,
Pune, Bengaluru, Delhi, Gurgaon
and to a certain extent Chennai.
This is because these cities see a
lot of wealth creation, thanks to their
economic fundamentals.
However, it is not only the wealth
creation in these cities which is
driving the luxury homes market in
India. The evolving mind sets of the
buyers emanating from these cities
are also changing the shape and
specifications that define the term
‘luxury homes’.
The concept of luxury has definitely
changed dramatically over the years,
and this holds true for luxury homes
as well. Previously, the demand for
large, well-appointed homes came
with various luxurious amenities.
Such homes existed in these families
for decades, and rarely reflected the
changing times.
Rich, young clientele
Today, the ranks of HNIs in India
do not include only such families.
The country’s IT and manufacturing
boom has brought wealth generated
by high-paid jobs and new business
enterprises into the picture, as well.
The average age of luxury home
buyers is now between 35-42, and
the requirements that such individuals
have in terms of luxury housing have
also changed.
Kishor Pate
CMD, Amit Enterprises
Housing Ltd
Realty developer Godrej Properties
has entered into a joint venture
to develop a residential project at
Keshavnagar in Pune. The project
will be spread over 43 acres and offer
around 2.8 million sq ft of saleable
area, said the company.
As part of the agreement, Godrej
Properties will receive 35 per cent
of the profits from the project. The
real estate development arm of the
Godrej Group will be developing
the project as a premium residential
development.
“This (project) fits well with our
strategy of entering partnerships
for residential developments in the
best locations within India’s largest
real estate markets. Over the years,
Godrej Properties has built a number
of landmark properties in Pune and
this project is our eighth in Pune,”
said Pirojsha Godrej, MD & CEO,
Godrej Properties.
Godrej Properties’ JV for
Pune housing project
lakh to Rs 14 crore.
Tata Housing has presence in
Mumbai, Pune, Ahmedabad, Goa,
Gurgaon, Chandigarh, Bengaluru,
Chennai, Kolkata and Bhubaneswar.
The company has ventured into
foreign markets such as Maldives
and is actively exploring other markets
such as Sri Lanka and other South
Asian countries.
(RR) rates are revised on January
1 every year, and also pending
registrations are done by customers.
However, in 2013, some element
of aggressive pricing by realty
developers, and more new launches
also aided in higher sales.
Property prices in Mumbai have
historically been high, however, the
capital prices in the Mumbai region
have stabilized in the past year, the
latest findings of property portal
99acres.com show. Key localities in
Mumbai like Worli, Breach Candy,
and Mahim (west) have seen an
increase of only 2 per cent during
this period.
Today’s buyers of luxury homes
are highly aspirational and, more
importantly, tech-savvy. This means
that they are able to put to use
their knowledge of IT technology
to increase their families’ lifestyle
quotients.
primarily from ‘old money’ -- that is,
families which have had amassed
wealth over several generations,
either through business operations,
investments or inheritances.
The configuration of choice for
such families was bungalows built on
family-owned land and embellished

11. March 31 - April 06, 2014 11INTERNATIONAL
And we need to realize that these
foreigners are only interested in
making money in India. They are not
here for the love of the land. In fact,
most of the foreigners I have met find
India to be a very difficult country to
work in.
There is a lot of talk of cartelisation
in the country. Cartelisation is
happening in most of the large
projects – even in the electrical
segment. This means that the country
will be paying more and more. So
encourage local people; encourage
local industry. Many Indians are ruling
the roost in many countries, but they
cannot do so in their own country. I
guess, it has to do with our mentality.
If a foreigner markets a product in
India, the product is well accepted,
but if an Indian markets a product,
the product is not accepted well. We
need to change this mindset.
What are the new technological
trends in the wire manufacturing
industry? Tell us about R&D at your
end.
Ravin Group now operates into five
clearverticals:manufacturingofenergy
cables up to 220 KV; EHV installations,
projects and services; solar energy
EPC projects, with emphasis on
tracker systems; specialised power
products like moisture removal
systems for transformers; and retail
energy products.
There is constant in-house R&D
in all these five verticals and many a
times we have seen that research in
oneverticaladdstothequalityquotient
of other products. For example, R&D
in EHV installations has enhanced our
quality in manufacturing of energy
cables, and R&D in moisture removal
systems for transformers has helped
us in all the verticals.
Our clear ideology is that we will
remain affixed into the areas that we
have developed expertise in, but at
the same time diversify into allied
areas. We have a full-fledged R&D
team at work in our group.
Your views on the challenges
confronting wires & cables sector.
Any practical approach for future
developments?
The wire and cables sector is
facing major challenges which start
with a lack of demand in the industry,
shortage of finances available - not
just to the industry but to entire sector
as a whole, multinationals coming
in with 100 per cent FDI, threat
of imports from various countries
around the world and also from the
lack of R&D that is carried out in the
industry.
All these factors combined paint a
dismal picture for the industry in the
coming year or two at least, unless
demand strategies are not set right
by the government. Energy costs
in India, especially in Maharashtra,
remain the highest in the world and
yet the utilities are not faring well.
This is a major threat to the
survival of at least the local players
in the industry, and the industry
would have to see off a bad phase
in the coming couple of years to take
advantage of a sustained demand
which would be inevitable after a
couple of years.
Sustainability is going to be one
of the keys and hence it would
be practical to conserve finances
and work towards newer and more
efficient products which could be the
driver for tomorrow.
Your outlook for the industry in the
year ahead.
I see a slightly turbulent period for
the industry in the coming year, and
the key would remain a stable and
growth oriented government at the
Centre, who would not be scared to
spur consumption and growth across
infrastructure segments.
What will be your business strategies
going further?
Our strategy as a group would
be to focus on 5 or 6 verticals that
we have built up and to look for
continuousresearchanddevelopment
in all areas, because we believe that
technology along with availability,
accessibility and affordability would
be pillars for growth for any industry
in India.
Any message to the industry?
I would urge the industry to engage
in new product development and
look into enhancing their quality and
service quotient rather than indulging
in unhealthy price wars.
We Indians can develop lots of
local products suitable for local market
conditions, and we are replete with
scientific manpower in our country to
do so. Let us all jointly work for a better
and productive tomorrow.
in person
(contd. from pg 3)
Large growth in infra investment from
unlisted funds likely in 2014
Unlisted infrastructure fund
managers are sitting on a record
$98 billion in dry powder; 71 per
cent expect to deploy more capital
in 2014 than last year. Preqin, one of
the leading source of information for
the alternative assets industry, in its
recent survey of unlisted infrastructure
fund managers worldwide reveals that
the vast majority (71 per cent) expect
to deploy more capital in 2014 than
in 2013.
With fund managers sitting on a
record $98 billion in dry powder and 44
per cent of fund managers planning to
invest significantly more capital in the
year ahead compared to 2013, there
is likely to be a substantial increase
in the amount of capital invested in
infrastructure assets in 2014.
However, infrastructure fund
managers are concerned about
sourcing suitable assets for
investment; 77 per cent believe
there is more competition for assets
than a year ago and 29 per cent
believe transaction sizes in 2014 will
likely increase as a result of market
conditions driving up prices.
The availability of debt financing
has been a key issue in recent years;
however, 47 per cent of infrastructure
fund managers believe the availability
of debt financing is better now than a
year ago, while only 3 per cent stated
it was worse.
Furthermore, there are signs that
traditional lenders are now returning
to the market; 77 per cent of fund
managers expect banks to be the
primary source of debt financing
for the infrastructure asset class in
2014.
Geographically, 54 per cent of
Europe-based fund managers feel
debt availability is better than 12
months ago, compared to 13 per
cent of US-based fund managers,
with European lenders having been
particularly cautious in the past few
years.
According to the report, 91 per cent
of fund managers believe transaction
sizes will be the same or larger in
2014 than in 2013, likely as a result
of increased competition for assets
driving up prices. The average deal
size in both 2012 and 2013 was $438
million, which is the highest figure in
the period since 2007.
Infrastructure fund managers view
energy as the most attractive sector,
followed by transport and renewable
energy.
In 2013, 689 infrastructure deals
were completed, with an estimated
aggregate value of $302 billion, up
from 684 deals in 2012 valued at an
estimated $300 billion. In 2013, 44%
of infrastructure deals were made
in European assets, while North
America-based assets accounted for
32 per cent of transactions.
Andrew Moylan, Head of Real
Assets Products, Preqin commented,
“With record levels of unlisted
infrastructure dry powder and fund
managers planning to put more
capital to work in 2014 compared to
2013, the outlook for the year ahead
is particularly positive.
“However, with many institutional
investors targeting direct investments
and improving debt market conditions,
it is not surprising that the majority fund
managers are now finding competition
for assets is growing.
“Most firms remain confident
there are attractive opportunities
in 2014, with energy and transport
sectors viewed most positively, but
there will also be concerns that this
increased demand may result in
assets becoming mispriced. While
new sources of debt are emerging,
with a growing number of debt funds
being formed and some institutional
investors providing financing for
infrastructure, banks are increasingly
prepared to lend on infrastructure
assets, and the vast majority of fund
managers expect traditional lenders
to remain the main source of debt in
the coming year.”
Global energy infra needs
investments of $36 trillion by 2050
Global investments into the energy
infrastructure space estimated at
$36 trillion representing 0.6 per cent
of the cumulative GDP over the next
few decades will provide a huge
opportunity for the private sector to
scaleupnewtechnologiesandmeetthe
emerging challenge of climate change.
The private sector will need to look
at the opportunities, Dr Ernest Moniz,
Secretary, US Department of Energy
said, “They need to focus on the
opportunities rather than the limits as
they explore initiatives in clean energy
transformation”.
He was speaking at a conference
on ‘Financing Renewable and Energy
Efficient Technologies’ organized by
the Confederation of Indian Industry
in partnership with Energy Cooperation
Programme (ECP) coinciding with the
Indo-US Energy Dialogue in New Delhi
on March 25.
Emphasising on the critical role of
financial support, Moniz said, “Clean
energy financing is being elevated
through multilateral agencies in the
US till private capital moves off the
sidelines.” This support is critical for
Clean Energy to gain momentum.
Echoing a similar train of thought,
MrMontek Singh Ahluwalia, Deputy
Chairman, the Planning Commission,
said, “Subsidies need to be explicit and
it is important to distinguish between
subsidy and finance. RE projects need
to have a revenue model that can be
financed and then we can bend over
backwards to ease the regulatory
restriction to address the externalities
in renewable energy financing.”
Highlighting two key trends in the
course of his address, Dr Moniz said,
“The notion that the Clean Technology
Revolution remains a distant goal
is changing as cost reductions in
clean technologies (photovoltaic,
LED and wind) continue to advance
at a rapid pace. A shift in the public
attitude towards the need for prudent
action to pursue the Clean Energy
Agenda is also being witnessed. This
is important to address the risks of
climate change.”
Andrew Moylan, Head of Real
Assets Products, Preqin
Speaking on the progress of the
role of renewable energy, Banmali
Agrawala, member, CII National
Council and CEO& President, GE
South Asia, said, “India as a country
has made substantial progress in the
area of renewable energy and energy
efficiency. Today installed renewable
energy capacity at 30 GW accounts for
13 per cent of the fuel mix and is about
5-6 per cent in energy terms. To further
strengthen the entire base of renewable
energy in the country, there is a need to
move from capacity addition to energy
and explore solutions in the area of
grid integration, energy storage and
energy efficiency on the demand side.
Funds also need to be provided to the
manufacturing sector to enable them
to innovate new technologies.”
Stressing the importance of
financing, he said, “Financing is
the core of renewable energy and
energy efficiency. While the market
has responded well to the commercial
interventions that have been put
in place, financial institutions in
the country need to respond more
aggressively and should be willing to
go that extra step.”
Lend Lease & Bouygues land
$2.65 b Sydney tunnel
A joint venture of Lend Lease &
Bouygues has been named preferred
bidder for AU$2.65 billion (£1.43
billion) tunneled motorway scheme
in Sydney, Australia. The contract
involves the design and construction
of the North Connex motorway.
The award of the contract to the
Lend Lease & Bouygues joint venture
is subject to planning approval and
finalization of contract terms. The work
involves construction of a 9 km twin
tunnel tolled link from the southern
end of the M1 Pacific Motorway at
Wahroonga to the Hills M2 Motorway
at its existing Pennant Hills Road
interchange.
The scheme is being developed
by Transurban, which approached the
New South Wales government in 2012
with an unsolicited proposal to design,
build, operate and finance the link.