Construction Review Issue 35-2nd anniversary special-2013

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September 02-08, 2013

An MMR, Braj Binani Group Publication

VOLUME 2

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Issue No. 35

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September 02 - 08, 2013

small and medium business, this
area will now become the focus for
growth.
Further, its report titled Mega
Tr e n d s e n v i s a g e s s i g n i f i c a n t
opportunities in Menasa across
key sectors such as infrastructure
development, power and water, real
estate, oil and gas, manufacturing
and healthcare by 2022-23.
Samita Khawar, Head of Growth
Implementation Solutions, Frost
& Sullivan, Menasa, says, “The
combination of numerous countries
and lack of availability of relevant

information can leave companies with
a daunting task of how to approach
their expansion plans. While ‘how’ is
the biggest question that is generally
asked, a better starting point is
‘where’. The specificities of regions,
countries, and even markets within
countries mean that the entry strategy
generally needs to be customized to
the strategic needs of the client.”
Frost & Sullivan endorses a
structured and insights-based
evaluation of growth and expansion
options, as the right approach
for leveraging Menasa’s yet
untapped, $10 trillion cross-industry
opportunity.
The Middle East, North Africa
and South Asia has been one of the
world’s booming regions in the past
couple of years. Menasa recorded
a combined GDP of $8.3 trillion in
2012, achieving a growth rate of
more than 3.5 per cent over the
previous year. With sustained long
term growth plans and anticipated

2

p e ci al

Asia), this new emergence has
become one of the world’s booming
regions in the past couple of years.
As per a report by Frost & Sullivan,
Menasa recorded a combined GDP
of $8.3 trillion in 2012, achieving a
growth rate of more than 3.5 per
cent over the previous year. With
sustained long term growth plans
and anticipated revival of the global
economy in the next two to three
years, the combined GDP of Menasa
is expected to reach $12.3 to $12.8
trillion by 2022-23.
Largely unknown to the regular

A n n i ver s

yS

Amidst the U-, V- and W- shaped
recovery and the doom predicted
in leading economies, some lesser
talked-about markets are quietly
mending their ways out of the woods
and are likely to exhibit exponential
growth in days to come. With world
shrunk into blocs like Brazil, Russia,
India, China and South Africa (Brics),
the European Union (EU), the Gulf
Cooperation Council (GCC), there is
now a new entrant waiting to script
its success stories.
Commonly referred to as Menasa
(Middle East, North Africa and South

Price : Rs. 100

ar

$10 trillion opportunity
awaits Menasa

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revival of the global economy in the
next two to three years, the combined
GDP of Menasa is expected to reach
$12.3 to 12.8 trillion by 2022-23.
With economic supremacy
orienting towards east in this postcredit crisis period, Construction
Industry Review, in its Second
Anniversary special, unlocks the
potential holding regions like Menasa,
China, and India.
(Contd. on pg. 2)

COVER STORY
India markets present an
interesting opportunity for investment,
as it can absorb liquidity inflows on
infrastructure projects which will
have a meaningful GDP growth.
Moreover, South-East Asian countries
have a natural pool of both skilled
and unskilled labour that can form
the basis of investment interaction
between capital-endowed nations in
the Gulf and population-rich South
Asia.
Common sense would suggest
that a higher infrastructure growth in
these countries will eventually have a
positive impact on the GDP growth.

India -- reforms aiding growth

The Indian economy has been
marred by several domestic and
global factors plunging GDP growth to
5 per cent in 2012-13 fiscal, which was
a decade low. Low growth, coupled
with high inflation, global economic
slowdown and high fiscal deficit,
has significantly impacted domestic
industrial production, foreign inflow
and overall market sentiment.
To c o u n t e r t h e s l o w d o w n ,
government recently introduced
several key reforms, such as permitting
FDI in retail, aviation, insurance and
broadcasting. The Reserve Bank of
India (RBI) is also trying to improve
liquidity in the economy by cautiously
reviewing the key rates.
A new study by Global Construction
Perspectives (GCP) and Oxford
Economics finds that, going further,
India will become the world’s third
largest construction market by 2025,
adding 11.5 million homes a year to
become a $1 trillion a year market.
The GCP study also predicts that
while India’s infrastructure market is
expected to grow at around 8 per


cent, the fastest among its sector,
India is unlikely to achieve its plan
target of $1 trillion investment in
infrastructure, given the shortage of
financing. However, while factors like
high commodity prices, inflation and
currency volatility affect its short term
growth prospects, the writers feel
that in the medium to long term, once
global financial volatility passes, India
is poised for a construction boom.
The construction industry is a major
contributor to the country’s GDP (8 per
cent in FY12) and one of the largest
employment generators currently
employing around 33 million people.
While the Indian economy grew by 5
per cent in FY13 as compared to 6.2
per cent in FY12, the construction
industry grew by 5.9 per cent in FY13
against 5.6 per cent in FY12.
According to a PwC report
prepared for the organizers of The
Big 5 Construct India exhibition, India
is expected to emerge as the world’s
third largest construction market by
2020.
In the past decade, “the country
has witnessed a tremendous housing
boom over the span of five years,
from 2012 to 2016, the real estate
sector is expected to account for 43
per cent of the construction spend
in India. This segment is forecast
to achieve a CAGR of 13.6 per cent
during this period. The PwC report
estimates that the market for the real
estate construction segment in India
is likely to aggregate to approximately
$380 billion over the five-year period,
2012 to 2016,” states Dushyant Singh,
Associate Director-Strategy, PwC.

Funding mechanism

The construction sector, including
the residential & non-residential

Flow of Bank Credit to Construction Sector (in Rs crore)
2006-07

2007-08

2008-09

2009-10

2010-11

w1801240

2204801

2601825

3040007

3667354

19997

27945

38505

44219

50135

1.1.

Gross Bank Non-Food Credit

1.3

1.5

1.5

1.4

Bank Credit to Construction Industry
Percentage share ( per cent)

Source: Annual Reports, RBI

Flow of FDI in Construction Activities (including roads & highways)
Cumulative
(April 2000 – Aug 2011)

2007-08
In Rs crore
In USD million

2008-09

2009-10

2010-11

6989

8792

13469

4979

42,072

1103

9417 (6 per cent of
total FDI inflows)

1743

2028

2852

Source: DIPP MoC&I
,

Indian construction industry estimates (Rs billion)
2012/13f
Construction Industry value
Infrastructure industry value as
per cent of total construction
Infrastructure industry value

2013/14f

2014/15f

2015/16f

2016/17f

Total

7,668

8,875

10,316

11,860

13,590

52,309

49

50

50

51

52

-

3,723

4,413

5,204

6,059

7,017

26,417

Residential and non-residential
building industry value as per
cent of total construction

52

50

50

49

48

-

Residential and non-residential
building industry value

3,945

4,461

5,112

5,800

6,574

25,893

Sources: BMI forecasts, Census and Statistics Department / ILO

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prices in December 2012.
Sold Gross Floor Area (GFA)
of residential properties totalled
985 million square metres in China
throughout 2012, up by approximately
2 per cent from 2011. Developers,
nevertheless, remained cautious, with
new construction and land purchase
data still registering a fairly significant
year-on-year decrease.
New office completions slowed
in most cities in 3Q but rebounded
slightly in 4Q12, and supply in
key cities in the north and south
remained limited. Demand in key
markets generally weakened amid the
unfavourable economic environment.
However, demand for retail space
remained robust, with international
luxury brands and fast-fashion retailers
actively seeking quality space in prime
locations.
Retailers remain positive about
long-term growth in domestic
consumption and are focusing their
expansion efforts on the central and
western regions of the country.
In the residential sector, most cities
saw prices stabilise and transaction

buildings and infrastructure sector, is
attracting both domestic (government
funding, institutional funding) as well
as foreign direct investment. Before
the year 2000, the deployment of
gross bank credit in the construction
sector was declining, e.g. from 2.13
per cent in 1990 to 1.37 per cent
in 2000. In order to increase the
flow of institutional credit to the
construction sector, it was declared
as an industrial concern under the
Industrial Development Bank of India
Act in March 2000.
In the year 2010-11, around Rs
50,135 were lent by banks to the
construction industry which was 1.4
per cent of the gross bank non-food
credit disbursed during the year. While
this step was in the right direction, it
is necessary now to encourage banks
and lending institutions to develop
lending norms and special funding
instruments that could address both
the requirements of the construction
industry as well as the concerns of
the bankers.

China -- demand to grow
8.5 pc per year thru 2017

China’s expenditure on construction
is estimated to increase 8.5 per
cent per year in real terms through
2017. The ongoing industrialization
and urbanization, rising levels of
income, growing population, and the
government’s thrust to the expansion
and upgradation of the nation’s
infrastructure will support healthy
growth in construction spending.
However, growth is likely to
moderate further from the 16 per cent
annual gains witnessed during the
2007-2012 period, when gross fixed
capital formation was boosted by the
government’s stimulus programme to
counter the global financial crisis in 2009.
In terms of macro perspective,
although China’s domestic GDP
reduced further to 7.9 per cent yearon-year in the fourth quarter, several
key indicators improved during the last
quarter of 2012. The HSBC China PMI
for December 2012 stood at 51.5, the
year high. Both the new order index
and the new export index showed
improvement, reflecting increased
optimism among manufacturers.
Former premier Wen Jiabao recently
commented that economic growth in
China had stabilised and that there
was no need for excessive stimulus
measures. This was seen by many as
an indication that additional stimulus
measures are unlikely in the near future.
According the a recent report
by KPMG, China’s housing market
stabilised in third quarter but started to
rebound in November 2012, with most
cities included in the 70 Large-andMedium-Size Cities New Commodity
Housing Price Index showing higher

v o l u m e r e g i s t e r y- o - y g r o w t h .
Developers grew more optimistic
following the rebound in transaction
activity in the second quarter of 2013
onwards and opted to speed up the
launch of new projects and reduce
discounts.
Strong demand for quality logistics
facilities and rents increased in most
cities in China in 2012. Space in Tianjin,
Shenyang, Guangzhou, Chengdu and
Chongqing remained particularly tight
and rents in these markets recorded
stronger growth. A circular issued by
the government during the period to
promote foreign trade is anticipated to
create additional demand for quality
logistics facilities.
While as per a recent report by
the US-based RnRMarketResearch,
construction expenditures in China are
nearly equally split among residential
buildings, non-residential buildings,
and non-building structures. Each of
these segments accounted for around
one-third of the total construction
market in 2012.
Non-building construction will
see the fastest growth (in real terms)
through 2017. Increases will benefit
from state-led efforts to expand and
upgrade the country’s transportation
infrastructure, such as the “7918”
highways network, subway systems
in major cities, and several airports.
Utilities construction will also contribute
to non-building construction spending
gains, particularly in fast growing
urban areas, as the government
continues to expand and improve
access to such infrastructure as water
supply, sewage treatment, rubbish
disposal, and gas distribution. Further
efforts to increase the country’s power
generation capacity and improve
electricity transmission networks will
also drive spending on non-building
construction.

Non-residential buildings
to exhibit annual gains

Inflation-adjusted non-residential
building construction expenditures are
forecast to post the best annual gains
through 2017. Growth will be led by
strong advances in industrial building
construction. Spending on residential

COVER STORY

buildings will be slightly less through
2017, with market gains primarily
driven by continuing population
migration from rural to urban areas
and supported by rising personal
income levels. Despite strong gains
in housing construction over the last
decade, living conditions remain poor
for some residents due to uneven
distribution of housing ownership in
urban areas in China.

Central-East to remain largest
regional market

The Central-East region, home
to about one-third of the country’s
total population and economic
output, supports the largest regional
construction market and will account
for the majority of total construction
spending in China in 2017.


Construction expenditures in the
Northwest region are expected to
enjoy the fastest growth, benefiting
from the governm en t ’ s “ G r ea t
Western Development” strategy
and rising personal incomes, which
will result in relatively stronger
increases in construction spending
on infrastructure and manufacturing
facilities and housing.

Indonesia -- higher infra
spend to spur growth

Against a backdrop of weaker
global economic growth, the
Indonesia’s economy in 2012 grew
strongly by 6.2 per cent, buoyed
mainly by domestic demand. Over
the past eight years, the Indonesia’s
economy has continued to grow
solidly, averaging in excess of 6 per

cent, making Indonesia one of only
a very few countries in the world to
combine rapid economic growth with
maintained stability.
This sustainable economic growth
was underpinned by a favourable
macroeconomic environment and
stable financial system. Economic
expansion in 2012 was boosted by
the growing contribution of domestic
demand, amid slower exports
performance due to weaker external
demand. From the production side,
national economic growth was
still driven by three main sectors,
namely the manufacturing sector, the
trade, hotels and restaurants sector
as well as the transportation and
communication sector.
The agricultural sector, along
with the construction sector, also
experienced surging growth in line
with persistently strong domestic
demand. Nevertheless, the mining
and quarrying sector continued to
report relatively marginal expansion
as a consequence of slower global
economic expansion.
In addition, past structural factors
and policy responses as well as
future policy directions will also
affect the dynamics of the Indonesian
economy going forward. Under these
conditions, Indonesia’s economy in
2013 is expected to remain strong
and grow within the range of 6.3 per
cent - 6.8 per cent, as per a 2012
economic report by the Bank of
Indonesia.
The Residential Property Price
Index rallied 2.19 per cent in the
second quarter of 2013 or 12.11
per cent year-on-year during the
reporting period. The public demand
for houses has led to an 18.08
per cent (qtq) surge in residential
property sales volume during the
second quarter of 2013 for all types
of houses.
Medium and small houses
experienced the most dramatic
upsurge in sales volume at 23.47 per

cent and 23.43 per cent respectively.
The performance of the property
market is reflected by a significant
increase in the allocation of mortgage
loans and other property credit in the
reporting quarter.
Favorable performance is further
corroborated from the survey results
by the Real Sector Statistics Division
of the Indonesian government that
confirm mortgage loans are the most
dominant source of financing used
by the consumers while purchasing
property, with average rates between
9 per cent and 12 per cent.

Market outlook

Domestic demand is predicted to
remain as the main contributor to the
economic growth, being consumption
and investment are expected to record
higher growths. One particular factor
which is envisaged to contribute
positively to the domestic economy is
the activity following the preparation
and organization of the 2014 general
elections.
Investment in 2013 is expected to
post a strong growth in the range of
10.2 per cent-10.7 per cent, higher
than the previous year in line with
strengthening domestic household
consumption and the prospect of
stronger export performance.
In addition, this condition is further
supported by higher government
capital expenditure, improved investor
optimism and encouraging domestic
business climate. Thus, the ratio of
investment to GDP is expected to
continue its upward trend and exceed
that of the previous year.
In the 2013 state budget, the
government has budgeted capital
expenditure of Rp184.4 trillion, where
the highest allocation reserved for
infrastructure. This higher spending
allocation is intended to further
support de-bottlenecking efforts
as well as improve connectivity
between regions, food security,
energy security, and public welfare.

3

Provisions for infrastructure
development in the 2013 state budget
includes roads, ports, provision
for facilities and infrastructure
of river transport, lake transport
and crossings, construction
and rehabilitation of airports,
the construction of new railway
lines, construction of terminals,
road transport, the construction of
wharf crossing facilities, as well as
development of the construction
and management of fishing ports.
In addition, to further facilitate
infrastructure development, the
government also allocated funds to
increase power capacity and expand
the transmission network across the
regions.
Furthermore, the government
plans to increase highway capacity
across Sumatra, Java, Bali, Borneo,
Sulawesi, West Nusa Tenggara, East
Nusa Tenggara and Papua.
The government also initiated
a number of policies to accelerate
infrastructure development including
the issuance of procurement of
goods/services and the procedure
for land acquisition for development
and public interest.

Malaysia – 10th plan
to drive growth

Malaysian construction industry
is set for great development with the
ongoing implementation of the 10th
Malaysia Plan. Given the development
allocations and facilitation funds, the
industry is set to benefit from the
abundant opportunities that will arise
from the plan.
These opportunities including high
impact projects will create multiplier
effects that will enhance the demand
and domestic growth for the entire
economy especially the construction
sector. Niche sectors such as the
development of green townships
and sustainable living are also areas
which Malaysia is pursuing.
(Contd. on pg. 37)

INFRASTRUCTURE


Further, the length of the platforms
will also reduce which will again
result in lower capital costs. The
wider coaches will also mean
greater passenger convenience and
comfort.

‘Mega Metro, a model project
for India, not just Gujarat’

What is the vision behind the
Ahmedabad-Gandhinagar Metro?
When was the SPV MEGA floated
for the project?
The idea of initiating the Metro rail
project in Ahmedabad was adopted
in May 2009, which resulted in the
formation of a SPV –Metro Link Express
for Gandhinagar & Ahmedabad
(Mega) Company Ltd. in February
2010. However, the route was finally
approved by the state government in
September 2012.
The idea was born out of the vision
to provide safe, fast and eco-friendly
rail based mass transit services to
the public at affordable rates while
simultaneously catalysing dense and
orderly urban growth.
The project supports Gujarat
government’s vision of continuing the
journey as one of India’s fastest growing
states. This in turn will require urban
transportation infrastructure which can
cater to future population growth in the
Ahmedabad-Gandhinagar region.
What is the current status of the
project? Tell us about the progression
of work done so far in general
engineering consultancy and civil
works? Which companies were
awarded this contract and what is
the scope of work allotted to them?
Preliminary surveys such as
topographical survey, soil investigation

The Metro-Link Express for Gandhinagar &
Ahmedabad (Mega) is committed to deliver
world-class state-of-the-art technology
and most cost-efficient Metro within the
shortest time span possible in the country.
Sanjay Gupta, Executive Chairman,
Mega, expands upon project details in
this interaction with Remona Divekar.
Excerpts:

expected to grow rapidly and this will
need to be supported by a public and
modern transportation network.
The route has been planned in
such a way that it taps the majority of
the remaining five million populations.
The development of this project is
expected to lead to sharp increase
in the share of traffic for public
survey, detection of underground
utility completed. Traffic demand
assessment on the entire network has
been completed.
Monopile (bilateral direction and
vertical direction) test for finalizing load
for substructure has been conducted.
Preliminary design for civil (substructure/
superstructure), engineering alignment
design, preliminary train operation
plan, power load calculation, etc are
completed. Detailed design of depot
and protecting structure has also been
completed.
Utility shifting work on the full
alignment, development of casting
yard is in progress Core infrastructure
works will begin in fourth quarter of
year 2013. Appointment of general
consultant & project management
consultant is underway for which
RFP is issued and under finalization.
Apart from this Environment Impact
Assessment (EIA) study, sustainability
study, transit oriented development
and multi modal integration study are
underway.
What is the total investment in the
project and how will it be funded?
The total cost of the project is
estimated at Rs 22,000 crore. The
unique feature of the project funding is
a low debt equity ratio of 40:60 against
the conventional debt equity ratio of
70: 30. The Gujarat government will
contribute the equity of 60 % while
the balance 40 % would be raised
as debt.
The government of Gujarat has
already infused Rs 550 crore as equity
till March 31, 2013 in Mega and has
allotted a further Rs 550 crore for the
financial year 2013-14 in the state
Budget. Further allocations will be
made as and when required.

Give us the phase wise design and
structural elements planned for the
metro? What state of art technology
will be used here? Also, phase
wise what is the estimated time of
completion?
The project is being executed on an
EPC basis with Mega itself functioning
as the EPC contractor and going
forward it will be the operations and
maintenance contractor too. Also,
most of the project design, planning
and concept has been developed
in–house.
The company has been recently
awarded the ISO-9001:2008
certification for its efforts by Stancert
Assessors (P) LTD. Mega is now
planning to leverage this certificate and
its expertise by bidding for consultancy
services for metro rail projects across
the globe. This will also open a fresh
revenue stream for the company
enabling it to break even faster.
The project is being scheduled
in two phases with the first phase
comprising 56.32 km with elevated
corridor and underground section.
Line 2 being commissioned by
October 2018 while the second
phase of comprising 31.71 kilometers
with elevated corridor and being
commissioned by October 2024.
How will the project benefit the
people of Ahmedbad-Gandhinagar?
In what way will metro rail project
promote integration with AMTS,
BRTS, Railways and other modes
of public transit system?
At present, public transport
accounts for only a small part of
the transport used by the people
in the region. Only one million in
a population of six million people
use public transport. This region is

Give us an estimated cost, project
parameters and alignment details,
keeping in view the safety aspects,
access to all, easy circulation
area, automatic fare and parking
facilities?
The total estimated cost of the
project is Rs 22,000 crore. The
project has been undertaken as
one single project. It is only for
construction convenience and
efficient management that the project
would be taken up in phases.
Mega has a clear vision – to
provide safe, fast and eco-friendly
rail based mass transit services to the
public for connecting important points
in Ahmedabad and Gandhinagar .The
project will be of 88 km connecting all
the important points of Ahmedabad
like Kalupur Railway station, Gita
Mandir Bus station, Civil hospital,
Paldi, University, Airport and reaching
to Gandhinagar for connecting GIFT
city, Sachivalaya and Akshardam.
The project is being designed with
the state of the art technology like
CBTC for signaling, 3rd Rail 1500 V
DC for traction, wider body coach
and broad gauge to carry maximum
passengers.
Typical Metro station

transport. The metro expects to
carry 2.16 million people by 2021
and five million people by 2041 on a
daily basis.
Thanks to the latest technology
and design passengers are expected
to have a very comfortable and
convenient journey. The project is
also expected to generate several
revenue opportunities for the project
itself and state government which
in turn will pave the way for further
development.
Over a period of time, the metro
will integrate seamlessly with AMTS
and BRTS with a single ticket being
issued. Mega will provide high speed
Wi-Fi internet services on the go and
thus enable commuters to connect
with the world on the go.
Rolling stock is one of the longest
lead time items. What is the USP
of this material and in which major
construction work for metro project
would it be used?
Our coaches are a distinctive
feature of the Metro project. These
will be wide bodied coaches of 3.6
m width and will run on broad gauge
1,676mm. The wide sized coaches
will result in lower overall capital
costs as fewer coaches can carry
more people.
Mahatma Mandir

The Metro rail network of
approximately 87.26 km has been
approved by the Gujarat government.
Predominantly the network is planned
on an elevated corridor running in the
central median of the RoW.
Out of total network length,
approximately 27 km of the section
is an underground section serving
the old city area of Ahmedabad. The
network will serve at least 5.7 million
daily ridership by the year 2041 when
the population of the region will cross
more than 12 million. The corridor
traversing within Ahmedabad city has
been proposed as phase-1, while the
corridor connecting to Gandhinagar
will be developed under phase-2.
Phase-1 of Metro alignment
consists of three lines with total
length of 55.8 km and 38 stations.
From total length, approximate 48
per cent stretch is underground. This
phase provides connectivity in the
Ahmedabad region. It connects West
and East areas of the city as well as
North and South area.
Phase–2 consists of 4 lines
admeasuring 31.48 km length with
18 stations. All lines proposed under
phase–2 are elevated. This line
connects state capital Gandhinagar
with Ahmedabad city. This line connects
to major hubs in the Gandhinagar like
Akshardham, Indroda Nature Park,
Sachivalaya, major administrative
buildings etc.

4

The project is being scheduled
in two phases with the first phase
comprising 56.32 km with elevated
corridor and underground section
while the second phase of comprising
31.71 km with elevated corridor.
For the safety of the passengers,
Mega will install safety glass panels
on the platform (platform screen door/
gates). This will prevent accidental
falls off the platform onto the track
area because of restricted access to
the tracks and tunnels area.
Platform screen door will improve
climate control within the station and
also improve the sound quality of the
platform announcements.
How do you view this metro project
in comparison to the other metros
that are constructed, planned
in different cities of India? What
striking difference do you have in
this project? Do sustainable ecofriendly factors play a key role? If
yes what are they?
We have drawn several key
learnings from our observation of
other metro rail projects. The first
key learning is that no two metros are
similar. It is all about customization.
So, one cannot look at readymade
models. The project should clearly
evolve based on the principle of
customer centricity.
The Mega Metro rail project would
be a pioneering project of its kind in
India due to the adoption of latest
technology. Apart from driverless
trains another, wide coaches and
the adoption of broad gauge a key
feature of this project is the use of
monopile structures predominantly.
Another important feature is 1500
V DC Third Rail traction system. Also
the project is eco-friendly as there
will be no emissions and thus the
company can earn carbon credits.
Also the project is eco-friendly as
there will be no emissions and
thus the company can earn carbon
credits.

power


5

Chinese investments play large role
in SE Asia hydroelectric growth
China has emerged as a key player
in both financing and building the
hydroelectric power infrastructure in
Southeast Asia. China invested more
than $6.1 billion between 2006 and
2011 in financing 2,729 megawatts
(mw) of capacity additions.
Between 2006 and 2011, Chinese
investors—such as the state-owned
enterprises Export Import Bank
of China and China Development
Bank—financed 46 per cent of all
hydroelectricity capacity additions
in Cambodia, Laos, and Myanmar
and developed previously untapped
hydroelectric resources in countries
bordering the Mekong and Irrawaddy
river basins.
This investment represented 6 per
cent of the total global hydroelectric
power capacity currently under
construction and 10 per cent of the
planned capacity additions outside of
Brazil, Russia, India, and China.

Hydroelectric resources

Southeast Asia has one of the
world’s fastest-growing regional
economies and is also home to
some of the world’s largest untapped
hydroelectric resources. Through
2018, the International Monetary Fund
expects the relatively small economies
of Cambodia, Laos, and Myanmar will
see rapid economic growth within the
region and will meet the increased
energy demand with electricity from
the new hydroelectric capacity.

Added capacity has turned Laos
into a major regional exporter of
electricity, much of which goes to
China. In 2011, Laos exported almost
678 million kWh, or nearly 32 per cent
of its total generation, and electricity
exports accounted for about one third
of its total exports.

Myanmar

The combined percentage of
hydroelectric generation relative
to total generation in these three
countries is expected to rise to 96
per cent in 2030 from 80 per cent
currently, according to data from
the Association of Southeast Asian
Nations (Asean).
Much of the future electricity
generated from the Chinese-financed
and -constructed hydroelectric
facilities in neighbouring Myanmar
and Laos is expected to be exported
to China’s rapidly growing southern
regions. Cambodia does not share a
border with China.
Details on hydroelectric projects
and funding in each of the three
countries follow:

Cambodia

According to Asean, hydroelectric
power is expected to account for
77 per cent of Cambodia’s total
electric generating capacity by 2030.
By contrast, hydroelectric power
accounted for less than 4 per cent
of Cambodia’s 386 mw of electric
generating capacity in 2007.
Much of Cambodia’s hydroelectric
power expansion to date was
financed by China. In December
2010, Sinohydro—a Chinese stateowned hydropower engineering and
construction firm—completed the
construction of the 184 mw Kamchay
Dam project at a cost of $280 million
with financing from the Export Import
Bank of China.

Separately, at a cost of $1 billion,
China is sponsoring construction
of Cambodia’s Stung Tatay and
Stung Russey dams, which upon
completion will be among Cambodia’s
largest hydroelectric power projects.
Cambodia plans to build 10 dams
between 2010 and 2019, adding 2,045
mw of capacity. Chinese entities are
providing financing for six of these
dams.

Laos

Almost all of Laos’s 731 mw of
electric generating capacity was
water-based as of 2007, and all future
capacity additions are expected to
be hydroelectric. China’s investment
capital is expected to add more than
2,000 mw of capacity to the Laotian grid.

About 98 per cent of Myanmar’s
electricity needs are expected to be
generated by hydroelectric plants in
2030; in 2007 this figure was about
50 per cent. A centre piece of China’s
investment in Myanmar’s hydroelectric
generating capacity is the 6,000 mw
Myistone facility.
Estimated to cost $3.6 billion,
Myistone was to be one of the largest
hydroelectric plants ever built. Even
though the Myistone Dam project
remains on hold, construction has
begun on 13,200 mw of future
hydroelectricity capacity in Myanmar’s
Irrawaddy River basin, financed by
both Chinese and Thai investors. The
electricity produced by these dams
is intended for export to China and
Thailand.
EIA recently released its
International Energy Outlook (IEO)
2013, which includes projections of
electricity generation and capacity
worldwide through the year 2035.
(Source: The Association of
Southeast Asian Nations)

CONSTRUCTION CHEMICALS


Silica fume for
high performance concrete
Silica fume can be
defined as ultra-fine
particles of amorphous
silicon dioxide
Silica fume has been used as
a mineral admixture to improve
concrete properties since the 1950s.
Commercial development of the
material began in the 1970s with
Elkem Microsilica being a registered
trademark belonging to Elkem Silicon
Materials of Norway.
The term ‘microsilica’ is commonly
used in many countries to describe
silica fume. Silica fume imparts
a range of important benefits to
concrete. It is extensively used in
construction, such that it is now
estimated that more than 10 million
cubic metres of high performance
silica fume concrete are produced
worldwide every year.
International Standards for
silica fume include ASTM C 1240
published by ASTM International and
EN 13263 published by European
Committee for Standardization and
in India it is IS 15388:200

Production of silica fume

Microsilica is an industrial byproduct, produced during the
manufacture of metallurgical silicon.
Around 350-500kg of silica fume
arises for every ton of metallurgical
silicon produced.
Silica fume can be defined as ultrafine particles of amorphous silicon
dioxide. Each particle is spherical,

6

Current uses of
silica fume concrete

Protection from corrosion for steel
reinforcement
Concrete structures requiring
strength and durability in a high
chloride environment, such as
harbours and marine bridges, are
a major application for silica fume.

sub-micron in size and with SiO
content in the range 85-99 per cent
(Figure 1). The ultra-fine particles
improve particle packing and produce
a highly pozzolanic reaction in the
concrete mixture, leading to:
Reduced permeability, therefore
reduced ingress of chloride & other
harmful agents and resulting in
greater protection for reinforcing
steel, especially in critical
infrastructure e.g. marine structures;
Higher strength; Higher abrasion &
erosion resistance.
The benefits of silica fume in
high performance concrete are
summarised in Table 1.
Table 1 Features and benefits of silica fume
Features of
silica fume

Reaction in
concrete

Figure 1 Silica fume particles are
spherical and sub-micron sized
Key concrete
benefits

Commercial
possibilities

Extremely efficient pozzolanic
reaction (increased CSH and
reduced Ca(OH)2), improved
transition zone between
aggregate and paste

Optimal high
compressive and
flexural strength

Reduce size and mass
of elements with higher
strength concrete

Reduced corrosion of
steel reinforcement

Longer service life for
marine structures

Glassy (amorphous)
spherical shape

Lubricating,
ball-bearing effect

Greater abrasion and
chemical resistance

Longer service life for
industrial floors

Ultra-small particle
size (less than 1
micron)

Maximum particle packing,
reduced voids and
permeability

Reduced segregation
and bleed

Easier pumping for tall
buildings

Reduced sprayed
concrete rebound

Economical sprayed
concrete

High SiO2 content
(>85%)

Handling and
mixing silica fume

During production, silica fume
initially takes the form of an ultra-fine
(average particle size 0.15 micron)
dry powder and has very low bulk
density. To aid handling, the silica

fume powder is usually subjected
to a ‘densification’ process, thereby
increasing the bulk density from
around 300 to 600kg/m.
In this densified form, the ultra-fine
silica fume particles are agglomerated
loosely together. The product can

then be delivered in bulk or bags to
the concrete plant. During mixing
at the concrete plant, it is important
to ensure the densified silica fume
agglomerates are broken down,
reverting to their primary, ultrafine condition with full dispersion
throughout the concrete mixture.
This is achieved through correct
batching sequence, efficient mixing
plant and adequate mixing time. Due
to its high surface area (typically ca.
20,000m/kg), silica fume concrete
requires the use of superplasticiser
to achieve appropriate water/binder
ratio.
Silica fume tends to reduce or
eliminate bleed water; it is imperative
that a suitable curing regime must
always be enforced at the construction
site.

For example, Bandra-Worli Sea
Link Bridge in Mumbai used high
performance silica fume concrete.
The required strength and marine
durability were achieved using M50
grade (with 10 per cent silica fume)
for the piles and M60 silica fume
concrete for the pile caps, piers and
precast segments.
Severe chloride environments,
such as marine structures and
projects in the Middle East, utilise
silica fume for maximum service life.
In the Middle East, it is common for
a maximum chloride permeability
of 1,000 coulombs to be specified
(ASTM C1202-09 method).
Typical silica fume concrete
mixtures supplied to these projects
achieve around 500 coulomb or
less.

Shotcrete and tunnels

Silica fume is also specified for
tunnelling projects, both for sprayed
concrete and precast segments.
For sprayed concrete, silica fume
improves both the fresh rheology and
the long-term durability of the concrete.
In precast, it is used to increase both
strength and durability.


The structure is a column-in-column
design, with a reinforced concrete core
tube and an exterior frame of concrete
filled steel columns. Some 70,000
m of high strength concrete was
supplied, including C90 pumped
to 168m height and C80 pumped
to 410m. Details of the C80 concrete
mixture are shown in Table 4.

Table 2: Mix Design and Results, Tehri Dam Laboratory Trials
M30

M50

M60

M70

317

340

365

380

Silica fume, kg/m3

0

10%

10%

10%

Cement, kg/m3

Aggregates, kg/m3

1900

1934

1909

1890

Water, kg/m3

143

142

140

130

w/b ratio

0.45

0.38

0.35

0.31

Strength 3 days

20.89

29.33

43.29

51.16

Strength 7 days

28.13

43.82

56.49

60.85

Strength 28 days

35.73

56.18

68.23

75.4

% abrasion loss, 72 hrs

6.26

3.06

2.88

2.75

Abrasion resistance

Applications requiring exceptionally
high abrasion resistance, such as
heavy duty industrial floors, coastal
sea defences and military pavements
specify high performance silica fume
concrete. For example, a number
of hydroelectric dam structures in
India, e.g. Chamera, Salal, and Tehri,
have utilised high performance silica
fume concrete to reduce erosion and
abrasion damage in the spillways and
stilling basins.
Silica fume will increase the
abrasion resistance of concrete
through increased strength of the
matrix and the improved bond
between matrix and aggregates.
Tehri dam, constructed on the
Bhagirathi river in North India, is a
2000 mw hydroelectric power plant
with an earth and rock fill dam and
several chute and shaft spillways.
The water velocity in the spillways
has been recorded up to 45-50m/s
with circular motion especially at
the junction of the vertical and
horizontal shafts of the shaft spillway,
creating high risk of having severe
cavitation damage along the lining
of the spillway.
A large amount of fine sand and
silt is carried in the river, posing
a high risk for abrasion-erosion
damage to the hydraulic structure.
Fo r t h e Te h r i d a m p r o j e c t ,
laboratory trials were conducted
using various concrete grades, with
and without silica fume. The abrasionresistance test method used was
ASTM C 1138.
This method uses steel balls in
water stirred by paddles at 1200
rpm to simulate the abrasive action
of waterborne particles such as silt,
sand, gravel, and boulders. The
results of the laboratory trials are
shown in Table 2.
A high performance M70 concrete
mix with 10 per cent silica fume
showed least abrasion loss and was
selected for use in the construction
project.

High-rise buildings
and pumping

Silica fume is routinely used
in the construction of the world’s
tallest buildings. Classic examples
include the Burj Khalifa in Dubai and
the Petronas Twin Towers in Kuala
Lumpur.
This type of structure requires a
high performance concrete, which
is typically based on a ternary blend
of binder. The aim of a ‘triple blend’
is to economically optimise strength,
durability and placement.
For example, the Guangzhou
International Finance Center,
designed by Wilkinson Eyre and
completed in 2010 is 432 m tall with
103 floors and for this project a
ternary blend silica fume concrete
mix was used to improve pumpability
and achieve high strength.

Table 4 C80 mix design, Guangzhou International Finance Center
P11 42.5 R
(GB175- 2007
‘Common
Portland
Cement’)
420kg/m3

GGBS

142kg/m3

Silica fume Superplasticiser

20kg/m3

Ultra-high strength concrete

Ultra-high strength concrete
(UHSC) technology has been
extensively researched by the
academic community. There is
growing awareness of the commercial
value of these higher performance
concretes.
A typical UHSC mixture could have
a water/binder ratio around 0.15-0.20
and a 20 per cent silica fume dosage
(of total binder mass). The silica fume
contributes towards the high strength
through (a) highly efficient pozzolanic
reaction and (b) optimized particle
packing.
To help design a UHSC mixture
with optimal particle packing,
computer software such as those

PCE

Water/
binder
ratio

Consistence

0.26

220-260mm

based on the Andreassen model can
be used. Recent research in Norway
has demonstrated that UHSC can
successfully be made using locally
available, common materials.
Understanding the synergy between
silica fume and super plasticizer in the
UHSC is critical to achieve the very low
water/binder ratio required by UHSC.
This is an area of research now being
progressed by Elkem.

Self-compacting concrete

Self-compacting concrete (SCC)
mixes can be sensitive to fluctuations
in material properties and batching
accuracy, potentially leading to
issues of segregation or variations
in consistence. This can make largescale supply of SCC from ready-

7

mixed plants more difficult and
onerous.
To overcome this issue and improve
the robustness of self-compacting
concrete, a relatively low dose of silica
fume (for example, 5 per cent silica
fume by weight of total cementitious
content) is effective.

Versatile, reliable

Since first becoming commercially
available in 1970s, silica fume has
steadily established itself as a versatile
and reliable material. It is being
used to produce high performance
concrete in a wide range of projects
around the world.
Higher performance concrete
can play an increasingly significant
role in improving the sustainability of
concrete construction, by improving
the durability and service life of
infrastructure and by enabling
structural design improvements such
as reduced column sizes.
Surendra Sharma

Dy-General Manager (Construction), Elkem
South Asia Pvt Ltd.


New trends in protective coating
Eco-friendly and
efficient innovative
technologies promise
cleaner, safer and
durable coating systems
and advancements
in protection of
structural steel
The usage of steel in the
construction industry has been
facing headwinds especially in light

of corrosion issues associated with
its adoption. However, as technology
progresses, the loss of assets
attributed to corrosion is on the
decline.
Of course, with steel comes
corrosion and with corrosion comes
coating systems. Coatings (also
read paint) companies have been
researching to develop better and
economical molecules to deliver
a long performance experiences
to the end user. Following are
some of the commercially available,
recent developments in the coating
space:


8

Thin film intumescent fire
protection coatings:

Many, if not most, renowned
iconic buildings have utilized high
strength steel to provide the structural
frame and a good foundation to the
structure.
The usage of steel provides
an architect or interior designer
an opportunity to express design
creativity and to provide enhanced
functional utilities for the developer.
Both internal and external steel
can feature in the expression of
structural form, and can provide an
optimized building layout, where the
developer can maximize return on
the investment in terms of increased
usable floor space.
In addition, speed of construction
and reduced frame weight make steel
a very attractive proposition to all the
stakeholders. Finally, steel offers the
opportunity to meet the challenges
of sustainable development as it is
100 per cent recyclable and thus
the steel framed buildings can be
regarded as ‘carbon friendly’.
In order to enable the structural
response to realize the various
benefits of the structural steel
frame; it is necessary to ensure
that it will remain stable in the event
of fire. It is also often necessary
to provide additional passive fire
protection (PFP) to some, or all, of
the individual members that make
up the steel frame. Unfortunately,
unprotected steel can perform poorly
in fully developed-post flashover
compartment fires, which can lead
to full or partial collapse.
The devastating effects of the
failure of structural steel frames have
been all too evident in the recent
years, like in the case of collapse of
the serious fire in the Torre Windsor
Tower in Madrid. There is a clear
focus on fire safety design in tall
buildings, and reports published by
the National Institute of Standards
and Technology (NIST) and the
Federal Emergency Management
Agency (FEMA) on the disaster has
revealed the following:
Improved structural integrity;
development of new tools for fire
resistant design; enhanced and
improved spray applied structural
fire protection systems; improved
active fire protection improved
building evacuation and emergency
response.
Thin film intumescent fire
protection coatings are applied to
parts of a building that are covered in
structural steel. This coating ensures
maximum protection (usually up
to 2 hours) and enables a high
quality finish to be achieved, akin
to conventional decorative paint
systems.
They also provide high corrosion
protection as well as enhance
aesthetics and sometimes, ensure
increased life of the building. The
protective function of the coating
gets activated during a fire breakout,
hence the protection is latent and
always present.
These coatings are tested and
certified by leading agencies in the
fire protection space to ensure safety
in operation. Airports and metro rails
have already commenced using
this technology and the results are
conspicuous.

Polysiloxane technology:

Another common method of
protecting steel structures against
corrosion, in the recent years,
has traditionally been a three-coat
system comprised of a zinc-rich
primer, an epoxy mid-coat, and an
acrylic polyurethane topcoat.
The zinc-rich primer provides
corrosion resistance; the epoxy
enhances the corrosion resistance
and provides chemical resistance;
the polyurethane protects the
UV-sensitive epoxy and provides

protection against harsh weather
conditions.
Although this approach has
worked well for decades, however,
several factors can shift the criteria for
selection of the right coating system
for projects. These factors include:
Commoditization (or reduction in the
quality) of polyurethane technology,
increased labor costs, greater
emphasis on environmental (VOCs)
and health (isocyanate exposure)
concerns.
Competitive pressure tends to
squeeze value from established
technologies and in a bid to secure
increased market share, vendors
resort to reducing price. In an effort
to reduce the cost of polyurethanes,
formulators have engineered
coatings, which some feel has
sacrificed performance in terms of
color and gloss retention.
While these commercial grade
polyurethanes exhibit good initial
results, but the performance drops
off quickly. In the strictest sense,
polysiloxanes (commonly known as
silicones) are polymer comprised of
alternating silicon and oxygen bonds
with organic substituents attached
directly to the silicon atom.
Polysiloxane Coatings are much
more resistant to the degradation
mechanisms due to the high
performance nature or attributes
of the Polysiloxane backbone. The
SI—O bond is stronger (452 KJ
mol-1) than the C—C bond (350 KJ
mol-1) in Organic Coatings making
it more heat and UV resistant. As it
is already oxidized; Polysiloxanes
are resistant to atmospheric oxygen
and most oxidizing chemicals.
Consequently, Polysiloxane Coatings
are more durable (resistant to weather
c o n d i t i o n s ) t h a n Po l y u r e t h a n e
Coatings and will retain gloss and
color for a much longer period of
time.
While cost per litre of polysiloxanehybrids may be higher than that of a
traditional urethane, the performance
of polysiloxanes reduces the overall
project cost by allowing formulators
to recommend their use as twocoat systems (zinc-rich primer and
polysiloxane topcoat), rather than
the traditional three-coat systems.
Not only does the potential exist
to reduce labor costs by a third, but
less paint is applied to the surface
thereby reducing material usage.
Beyond cost reduction, the ability to
use less paint has the added benefit
of decreasing solvent emissions
and overspray into the environment.
Regardless of scale, ownership, and
profile, all painting projects need
now be considered beyond the
immediacy of the task.
The coating finish is not only
decorative but also protects the
substrate against corrosion and
chemical attack. This maintains the
utility and safety of the investment for
years to come. Less durable coatings
tend to deteriorate, therefore they
must be removed after a certain
period of time and the substrate
must be repainted.
This incurs not only labor and
material costs, but also the disposal
costs for the old paint coating. And
with each repainting, resources are
expended, chemicals are released
into the environment, and workers
are exposed to substances, including
isocyanates.
While most applicators of
polyurethane coatings take the
necessary precautions to ensure
against exposure to isocyanates,
concerns continue to arise. Health
effects of isocyanate exposure
include irritation of skin and mucous
membranes, chest tightness, and
difficulty in breathing.
Isocyanates include compounds
classified as potential human
carcinogens and are also known to
cause cancer in animals. The main


9

effects of hazardous exposures are
occupational asthma and other lung
problems, as well as irritation of the
eyes, nose, throat, and skin. The
use of polysiloxane-hybrid coatings
eliminates these concerns.
The current business challenges
will only lead to more eco-friendly
and efficient innovative technologies
promising cleaner, safer and durable
coating systems in future.

Premraj Nair

Market Manager,
Protective Coatings,
Akzo Nobel India



10

Construction chemical market
vis-à-vis CCMA to drive growth
Today is the age of fast track
construction in India. Many major
construction works have been
conceived of and built over the last
few years in India and the use of
construction chemicals has been a
vital part of these projects.
The construction of both residential/
commercial and infrastructural
projects has seen an immense
growth spurt. Keeping this growth
in perspective, much more quality,
speed, economy and durability is
demanded of construction. These
qualities can only be achieved
by efficient use of construction
chemicals.
Even though the economy
does seem like it is slowing down,
construction continues on. This keeps
the construction chemical industry
growth drive in a positive perspective.
The key objectives for our association
will be to promote the growth of the
construction chemicals industry,
by raising awareness and quality
standards and to be a representative
body for communicating with
government, chambers of commerce
regulatory bodies and other forums,
local and international.

and protecting its durability and
also rehabilitating concrete, when
it is distressed. So all in all, as
far as concrete construction goes,
construction chemicals will always
have a key role to play.
The growth in the construction
i n d u s t r y, c o m b i n e d w i t h t h e
increasing demand for faster and
safer construction, will propel the
growth for our construction chemicals
industry.

Sharp rise in revenue

With the holistic approach the
Construction Chemical Manufacturer’s
Association (CCMA) is planning, the
industry is confident of growing
from present revenue of about Rs
2000 crore to Rs 5000 crore in
next few years. This is absolutely
possible considering the large gap
in demand and supply. With the focus
on durability, sustainability, green
practices and mitigating life cycle
cost of buildings and infrastructure
Construction chemicals can play

an important role in
overall development of
construction.
Essentially
construction
chemicals are the
link between the
chemical industry
and the construction
industry. By applying
chemistry, we facilitate
solutions for the construction
industry. We play a vital role in
improving the concrete, waterproofing

CCMA objectives

The long-term objective of CCMA in
general is to increase the awareness
in the end users about the correct
usage of construction chemicals.
We believe this will help us increase
the treatment ratio of construction
chemicals in concrete construction.
Another objective of CCMA is to
create trust in end users by creating
standardization and transparency.
It is with this view that the industry
has come together to spread the
awareness. From humble beginnings
of CCMA, today we have over 40
members who have an interest
in creating a larger awareness of
the industry, our technology and
application potential. We are firmly on
track to take this initiative to the next
level, training programs would be held
all over India for Applicators because
Application is a very important aspect
of the very success of waterproofing
and repair systems.
Lastly we plan to establish
just and equitable standards and
principles in construction chemicals
manufacture, trade and commerce
and to regulate the conduct and
practice of construction chemicals
trade and manufacture.

Road ahead

With our brand of C3 seminars
(held in Mumbai and New Delhi), we
focused on the cause of technical
awareness. The participants were
end users, specifiers, government
decision makers, etc.
These seminars also focus on
problems faced by decision makers
to specify and use these products
with confidence. International
speakers were invited who could
instill confidence in our local civil
engineering fraternity about benefits
of usage of construction chemicals.
With this development, CCMA
is set to become the voice of the
construction chemicals industry.
The success of our seminar series
is a good indication that the interest
in correct usage of construction
chemicals is fast gaining ground due
to the benefits in speed, durability and
life-cycle costs it provides

Handbook planned

Furthering the cause for technical
development, a handbook is planned
on the correct usage of construction

chemicals in collaboration with the
Indian Concrete Institute. Attempts
are already on way to introduce
technical topics in the academic
syllabi.
Training programmes are in
advance stages of design. These
roving seminars will be taken to rural
areas as well as engineering colleges.
Another initiative is to open up local
chapters all over India. A seminar was
planned in Ahmedabad in June 2012.
Two more seminars are in advanced
state of planning, one involving Drymix Mortars and the other involving the
stakeholders in the construction
chemicals industry. A further
idea was to get a marking on
construction chemicals to
increase the confidence of
the end-user.
Flagging off the initiative
to bring this awareness
to smaller cities, CCMA
flagged off its first regional
seminar titled C3R at the
Grand Bhagwati Seasons
Hotel, Rajkot, Gujarat on August
9, 2013. The theme of the seminar
was ‘Methods and Practices on the
use of Construction Chemicals.’ This
initiative will be furthered to other
cities such as Nagpur, Jaipur, etc. in
coming months.
In a very short amount of time
BIS has agreed that CCMA will be
on key IS Code committees to take
view point of expert CCMA members
in the formulation of codes. With
this holistic approach, the industry
and awareness about is confident
of growing.

Creating awareness

The focus and knowledge
dissemination planned is all round
and not limited to infra-projects alone.
Finally as awareness increases our
industry as a whole would grow. So
all in all with creating awareness as
base function, all possible regions
across India and all segments of
construction are being explored in
our bid to increase durability, improve
construction, speed up construction
as well as grow our industry.
The construction chemicals
industry has come up to age in our
country. Overall in the organized sector
the quality of construction chemicals
is quite at par with international
counterparts. All system like QA/QC,
ISO 9000, etc are in place.
The entry of multinationals in this
field with direct access to international
technology has raised the bar of
quality. This is to be met by local
manufacturers. Be it imports or locally
produced materials, the focus of
purchasing or specifying construction
chemicals should be solely on basis
of performance.
If we can get a better performing
material manufactured in India, it will
be a big benefit to the Indian Industry
as a whole. This benefit will also
depend on government accepting
construction chemicals as recognized
industry; back us with incentives and
rationalization of government taxes,
duties and levies.
So all in all our CCMA team
effort and the effect it had in raising
awareness about our industry does
make us happy. It is the first successful
step to a better future.

Samir Surlaker
President,
Construction
Chemical
Manufacturer’s
Association



How to waterproof bathroom
Waterproofing issues
on wet areas, especially
bathrooms

Today in modern buildings,
bathrooms are not just the spaces for
freshening up, but are more visualized
as personal spaces to get refreshed
and also rejuvenated and as a matter
of fact, a substantial amount of time
and investment is put in to make-over
or build bathrooms as per individual’s
choice.
But the whole visualization gets
disturbed when such bathrooms look
damp and get frequently exposed
to water penetration through walls,
window joints, floors etc. Failure
to waterproof bathroom not only
hampers the look of your flat but also it
could lead to major problems. Though
wet areas occupy less than 10 per
cent of the gross floor area, the annual
maintenance cost for such bathrooms
area can range from 35 percent to 50
per cent of the total maintenance cost
depending on the type of facility.

Important parameter

Normally the materials and
components used in bathroom to
make its floor, wall, architectural
finishes etc. including service pipes
and sanitary fittings are susceptible to
natural movement and as a result, the
materials made of clay and tiles could
increase in size affecting the joints and
causing the tiles to shift.
This results into the leakages
and dampness on the walls. So,
waterproofing of the bathroom is
one of the most important parameter
and we have to ensure that the
waterproofing systems are applied
correctly and carefully. Wrong
selection and incorrect application
causes the premature failure against
leakage and rectification becomes
much costly and time-consuming and
annoying too.
The main purpose of the
waterproofing treatment is to stop
the movement of water through the
floor bed or moisture penetration
through the walls and by drainage of
the water providing proper slope to
the drain points.

Generally common defects
occur in bathrooms and toilets:

Seepage through structural joint
because of use of poor quality material
or insufficient water tightness due to
poor application and main water
source remains undetected and
unattended.
Leakage through porous concrete
because of poor design and
inadequate mixing concrete retains
water and remains damp for long
time.
Cracks in tiles because if the tiles
are not soaked properly and if tiles
are not tapped in place, they lose
their water tightness with time and get
damaged by subsequent construction
activities.
Tile de-bonding because of
inadequate provision or wrong
detailing joints or excessive shrinkage
of the substrate due to improper
mixing and insufficient curing.
Rust staining because of moisture

migration and leaching of the surface
and unattended algae and fungus
growth on the surface due to prolonged
dampness and poor ventilation.
Leakage at pipe penetration and
joints: Unplanned plumbing work
creates gaps left at the junction and
also when no proper protection is
taken around the concealed and
embedded pipes, water can seep
through causing severe damage.
Leakage through floor traps:
Because of improper laying of floor
trap along the slope and insufficient
protection at the corner rounds or poor
application of membrane around pipes,
water can seep through the joints.

Waterproofing membrane

The complete floor with 300 mm
height along the periphery wall should
be covered with suitable brush applied
polymer modified cementitious base
waterproofing membrane. Such
waterproofing is termed as ‘tanking’
and the slope is to be maintained to
effectively direct all water to a drainage
outlet. Before applying waterproofing
membrane, ensure that no loose dust
particles or oil is there on the surface
as these may debond the entire film.
The waterproofing membrane
should be taken 150 mm along the
floor upto adjacent floor area and a
concrete kerb is to be provided at the

doorway so that no water can escape
out of that doorway.
Corners between floors and walls
are to be rounded with water tight
polymer mixed cement sand systems
and then a thick cement sand mortar
is to be laid over the waterproofing
membrane before laying of embedded
pipes.
Pipe joints are to be well protected
with waterproofing tape wrapped
around them and floor bed is made.
Any pipe insertion and floor traps
should be sealed at joint and encased
with waterproofing tape.
Waterproofing membrane is then
applied on the walls up to a height

11

of minimum 1800 mm and width of
1500 mm at shower areas before. The
membrane must be elastic enough
so that it should accommodate the
movements.
Before putting tiles on the floor, a
water penetration test is to be carried
out to ensure water tightness.
Tiles are to be placed using
polymeric tile adhesives and the joints
are to be filled with tile joint filers so that
no water can seep through them.
Ensure to follow the technical
instructions and product manuals
properly to achieve water tightness.

Sanjay
Bahadur

Global CEO,
Construction
Chemicals, Pidilite
Industries

EQUIPMENT


12

‘We expect India CE market
to grow faster than any other in the world’
eco-cycle and is testimony to Volvo’s
commitment towards a greener
environment.

How do you find the global market
for construction equipment industry
and its repercussions on India?
In 2011-12, we were around 3-4
per cent of the global equipment
market but this has changed quickly
because of the huge drop down in the
China market by 30-35 per cent last
year. There was a drop down in the
European market and in the American
market as well.
We can expect more investment
and the India market to grow faster
than any other market in the world,
about 15-20 per cent. More and
more mechanization and second city
development will make the CE market
grow further.
Could you elaborate on role of
transformation in CE market with
more and more technological
advances to remain cost-efficient?
Mechanization is finally beginning
to have a firm grip on the Indian
construction equipment sector
and the time duration to finish
projects is also reducing. But there
has to be a constant upgrade of
technologies along with introducing
new technologies.
Increasingly machines are being
designed to give better efficiency
in terms of fuel consumption and
productivity. At Volvo we add value
to customers by offering them
lowest cost of operation. To create
fuel efficiency we are constantly
innovating to make equipment that
are fuel efficient while reducing
emissions and environmental impact
– OptiShift is a prime example of
this.
Volvo’s unique OptiShift
technology consists of two important
features – a torque converter with
lock-up and free wheel stator and
Volvo’s patented Reverse By Braking
(RBB) function. The combination
of this technology has reduced
fuel consumption by up to 15 per
cent as well as increased machine
performance and productivity.
We are also moving towards
connectivity of our products through
G P S s y s t e m . Vo l v o C E i s t h e
first manufacturer to introduce a
telematics system called CareTrack
-- a telematics system that allows
remote monitoring and machine
diagnostics by using exclusive
Machine Tracking Information System
(Matris).
C a r e Tr a c k c o m b i n e s t w o
independent systems; GPS and
the mobile phone network, or data
via satellite. These systems are
coordinated in CareTrack and only
two items need to be installed in the
machine: a small computer with an
integrated GPS receiver and modem
plus an antenna.
It allows customers to monitor a
machine through GSM connection
and provide suitable maintenance
suggestions. With CareTrack the
customer gets the knowledge and
information he needs to make the
right decisions about his machine
and thereby increase profitability. The
customer can access the information
he needs by entering into a password
protected website, which gives
him detailed information about his
machine.
How do you see India’s provision
of $1 trillion towards infrastructural
project thrust in five year plan
could enhance the demand for CE
in India?
We have been waiting for this kind
of opportunity. We have been around

Volvo Construction Equipment is one
of the most dynamic companies in the
global construction equipment market.
A. M. Muralidharan, President,
Volvo Construction Equipment (CE) India,
shared his expert views with Pramod Shinde
on current downturn in the construction
equipment market, role of transformation
in CE, India’s infrastructural spending to
boost CE, Volvo CE initiative towards energy
efficiency and importance of Volvo’s design
thinking for construction equipment, etc.
Excerpts:

5-6 per cent of the GDP for many
years; the government recognises
that and now we are moving towards
9-10 per cent of the GDP to be
invested in infrastructure.
I think apart from government
investment lot of private investment is
needed as well. Also, there has to be
a business model for the contractors
to execute and complete projects
faster and hand it over back to the
government. As the government is
investing more, private players are
also investing more in infrastructure;
it’s a good sign for equipment
manufacturers like us.
H o w d o y o u p r o j e c t Vo v l o ’ s
Electronic Paver Management
(EPM) technology which has a great
potential in India?
The EPM technology is used for
laying new roads and maintaining
old ones. We expect the growth
possibility when Mumbai decides
to relay all their roads from current
concrete to asphalt roads.
The latest Electronic Pavers
Management II system (EPM II)
within the cab of a Volvo machine
helps the operator monitor all working
functions, and engine data and fuel
consumption are displayed on a
colour screen.

The EPM II contains a service
interval as well as a settings manager,
which saves information and
settings for later times when similar
conditions are present – saving time
and increasing productivity and
consistency. The EPM II console,
screed control panel and auxiliary
control panel can be removed and
locked away when not in use for
added security.
Tell us more about Volvo’s initiative
towards fuel efficiency, which is a
top priority among all construction
equipment owners?
Volvo has been one of the earliest
pioneers in driving higher fuelefficiency, and one of the earliest in
recognizing the environmental issue.
We understand that fuel has two
adverse attributes to it – one, it costs
money and the more an equipment
uses, the more expensive it gets; two,
fuel consumption creates pollution,
and hence the need to make engines
even more judicious.
The Volvo diesel engine is at
the heart of the company’s range
of products. Based on well-proven,
robust technology, the Volvo V-ACT
engine range meets the needs
of Indian customers by providing
increased machine performance

along with reduced emissions –
emissions that are ahead of the
increasingly strict regulations on
exhaust pollutants.
Along with environmental
improvements, the V-ACT engine
also represents new achievements
in combustion efficiency and overall
engine performance. With new fuel
injection, air management technology
and advanced electronics, the
inherent potential of the V-ACT engine
is then tailored by Volvo engineers
to meet the specific performance
criteria required by differing machine
types and applications.
Fuel efficiency is often one of
the demands of our customers.
Hence we are constantly innovating
to make equipment that are fuelefficient while reducing emissions
and environmental impact – OptiShift
is a prime example of this.
Volvo’s unique OptiShift technology
consists of two important features – A
torque converter with lock-up and free
wheel stator and Volvo’s patented
Reverse By Braking (RBB) function.
The combination of this technology
has reduced fuel consumption by up
to 15 per cent as well as increased
machine performance in wheel
loaders.
We r e c e n t l y i n t r o d u c e d o u r
Remanufactured (REMAN) Program
to encourage users to keep their Volvo
machines genuinely ‘a Volvo’. It allows
users of Volvo CE to have their used
components renovated to the same
condition as new, thus eliminating
the scope of environmental damage.
This programme aims at creating an

How Volvo construction equipment
ensure to remain the best
manufacturer of construction
equipment among all the global
players?
Volvo construction equipment is
one of the most dynamic companies
in the industry. Not only have we
grown rapidly over the last decade —
we have done so without sacrificing
the quality of our products, the
innovation of our thinking — or our
close relationships with our growing
family of customers.
We are proud to be a brand
that has brought in technological
innovations to the CE market in India.
For example, we have drastically
reduced service requirements on
Articulated Haulers; introduced
torque parallel linkage and the Volvo
Care Cab with advanced features like
RoPS (Roll Over Protection System)
that allow operators to feel safe, be
comfortable and in control.
Volvo CE is the first manufacturer
to introduce a telematics system
called CareTrack – the telematics
system allows remote monitoring
and machine diagnostics by
using exclusive Machine Tracking
Information System (Mirtis). All of
these have given Volvo CE a distinct
competitive advantage.
Volvo has been one of the earliest
pioneers in driving higher fuelefficiency, and one of the earliest in
recognizing the environmental issue.
We understand that fuel has two
adverse attributes to it – one, it costs
money and the more an equipment
uses, the more expensive it gets; two,
fuel consumption creates pollution,
and hence the need to make engines
even more judicious. Volvo CE
takes a holistic approach to fuel
efficiency. We deliver fuel efficiency
across all elements of our machines
via engines, systems, operator
behaviour and future technologies
while increasing the productivity for
our customers.
Volvo believes in skill development.
We have been actively investing
in training and competence
development to ensure there are
trained labour and operators to
operate advanced machinery. We
have a operator training centre with
all the latest machineries and also
with simulators. Volvo has partnered
with GMR Varalakshmi Foundation
(GMRVF), the Corporate Social
Responsibility arm of GMR Group, to
offer an Operators Training Course,
which will provide free training to
under-privileged youth in India to
operate construction machinery.
We have always focused on
improving and increasing the ways
we add value to our customers.
In spite of the uncertainties of the
market, we have maintained a steady
growth in the market introducing new
products, tapping new geographical
locations and adding to our customer
base. We have achieved this without
sacrificing the quality of our existing
products. The mantra behind this
success is our innovative way of
thinking and our close relationships
with our growing family of customers
and employees.
Could you highlight the importance
of Volvo’s design, for construction
equipment is ever changing?
The trend is towards managing
various components through

EQUIPMENT
electronics that also allows equipment
to connect through web based
portals.
Volvo CE is the first manufacturer
to introduce a telematics system
called CareTrack -- a telematics
system that allows remote monitoring
and machine diagnostics by
using exclusive Machine Tracking
Information System (Matris).
It allows customers to monitor a
machine through GSM connection
and provide suitable maintenance
suggestions. CareTrack combines
two independent systems; GPS and
the mobile phone network, or data
via satellite.
These systems are coordinated in
CareTrack and only two items need to
be installed in the machine: a small
computer with an integrated GPS
receiver and modem plus an antenna.
With CareTrack a customer gets the
knowledge and information he needs
to make the right decisions about
his machine and thereby increase
profitability.
The customer can access the
information he needs by entering into
a password protected website, which
gives him detailed information about
his machine.
How about Volvo construction
equipment commitment towards
advance training for skilled
development?
Volvo believes in skill development.
We have been actively investing
in training and competence
development to ensure there are
trained labour and operators to
operate advanced machinery.
We have an operator training
centre with all the latest machineries
and also with simulators. Volvo has
partnered with GMR Varalakshmi
Foundation (GMRVF), the Corporate
Social Responsibility arm of GMR
Group, to offer an Operators Training
Course, which will provide free training
to under-privileged youth in India to
operate construction machinery.
How do you find the market for
used equipment in India and
Volvo’s market share in the existing
market?
Second hand machinery are used
extensively in India and with the
global downturn customers are more
likely to focus on using their existing
machines for longer period of time
than buying new ones.
All manufacturers including
Volvo focus on providing excellent
aftermarket service to customers to
ensure their machines have longer
run time. We also have enough
capacity and knowledge to repair old
machines and therefore import is not
high on our list.
Could you provide your customer
experience while relying on Volvo
CE, which provides complete
solution to its customers?
We have focused on improving
and increasing the ways we add
value to our customers. In spite of
the uncertainties of the market, we
have maintained a steady growth in
the market introducing new products,
tapping new geographical locations
and adding to our customer base.
We have achieved this without
sacrificing the quality of our existing
products. The mantra behind this
success is our innovative way of
thinking and our close relationships
with our growing family of customers
and employees.
Last year Volvo launched the
Customer Contact Center ‘V Care’
which will help customers achieve
higher productivity by minimizing
their machine downtime. The centre
will record and process all customer
issues centrally and in real-time,
giving Volvo CE the ability to monitor
dealership customer serviceability
and enable them to resolve customer
issues quickly and efficiently.


The new centre is an integral
part of Volvo CE’s objective to offer
customers total lifecycle care – from
providing equipment to support and
partnership – and ensure customer
complete satisfaction.

Would you mind sharing with us
the total business transacted in the
last three years and which are key
equipment that were in demand?
Also, the future projection for the
Indian market?

The key equipment that were
i n d e m a n d w e r e Pa v e r s , S o i l
Compactors and Motor Graders.
The future of the market is very
positive. Though 2012 was better
than 2011, we hope 2013 will be

13

a turning point. There is lot of
work to be done in this country
and for the next 10-15 years. I feel
there will be good opportunities
for manufacturers like us. I don’t
see any concern at this point in
terms of capacity or equipment
utilisation.
Any plans to export your
equipment elsewhere in Asia?
Volvo construction equipment
has global presence and investment
has been made in different countries
to manufacture and supply products
to respective countries. We currently
export few models out of India. We
are working towards more exports
in the future.

EQUIPMENT


14

‘Upturn in demand for construction
equipment by 2014 H2’
Rajesh Nath , Managing Director,
VDMA shared his views with Pramod Shinde
about present slowdown in construction
equipment which would remain uncertain this
year, but he expects slight upward swing in
the second half of 2014.
He emphasized the importance of using
tower cranes, concrete pumps and man
hoist systems especially for high-rise
buildings which will help India in improving
construction quality and also prevent overrun
of construction cost. The Indian construction
industry’s output is expected to record a
CAGR of 15.45 per cent over the next fiveyear period, he further added. Excerpts:

The VDMA (Verband Deutscher
Maschinen-und Anlagenbau-the
German Engineering Federation) is
the largest engineering and equipment
industry network in Europe and supplies
machinery to the global market. Among
its global subsidiaries, VDMA India
maintains 14 sectors and has its liaison
office in Kolkata.
The German Engineering Federation
serves Indo-German economic relations
in different engineering sectors. VDMA
India promotes activities of the VDMA
member companies in India.
It is constantly maintaining close
relations with the Indian industry,
Indo-German companies, embassies,
consulates and various Indian industry
associations, especially with CII, Ficci,
EEPC, Assocham, Fieo, Capexil,
ICC, IGCC, etc. It also facilitates joint
ventures between German and Indian
companies for mutual benefit.
While commenting about global
market slowdown, German machinery
and tool association stated that its

technology, usage of hollow bricks,
tower cranes and man hoist systems
for high-rise buildings.
Usage of hollow bricks instead of
traditional bricks will help in energy
saving and economise construction
cost. Moreover, usage of tower
cranes, concrete pumps and man
hoist systems, especially for highrise buildings, will help in improving
construction quality and preventing
overrun of construction cost.
Can the Government of India’s
thrust on infrastructure spending
spur market for VDMA members for
construction and building material
machinery?
The Union Budget 2013-14 has
been a pragmatic one that emphasizes
the need to revive growth and
provide some measures to promote
investments. The 29 per cent growth
in plan expenditure, thrust on key
infrastructure sectors like road and
coal and emphasis on the need
to facilitate infrastructure financing

and Germany reached Euro 17.6
billion (Rs 123200 crore). In 2012
Germany exported approx Euro
10.38 billion (Rs 72660 crore) of
goods to India. Out of this the
machinery export was approx Euro
3.62 billion (Rs 25340 crore). Among
the machinery sectors, demand for
construction equipment and building
material machinery grew by 4.7
per cent.
Out of the machinery imported
by India, Germany has a share of
around 11 per cent in construction
equipment, ranking 5 globally and
a share of 14 cent cent in building
material machinery, ranking third
globally.
In 2012, the German construction
equipment and building material
machinery industry generated Euro
12.5 billion in turnover. Construction
equipment constituted Euro 7.9 billion
of this value, while Euro 4.6 billion
were made with building material,
glass and ceramic machinery.

overall orders fell short 5 per cent in real
terms of last year’s result. Domestic
business slumped by 4 per cent,
international business by 6 per cent,
reported the German Engineering
Federation in June this year.
Once again, incoming orders for
machinery from Eurozone partners were
disappointing. Given the double-digit
decline (minus 19 per cent), it remains
difficult for capital goods manufacturers
to speak about economic stabilization
in Eurozone.
How do you analyse global demand
and supply for construction
equipment and its repercussion on
the Indian market?
The construction equipment
business cycle, which showed a
remarkable growth in years 2010 and
2011, has shown a modest decline last
year. In 2012, the building construction
equipment orders, globally, were up
by around 5 per cent and sales figures
grew by around 15 per cent.
But due to a low demand in the
earthmoving and road equipment
market, the overall growth in the
construction equipment industry
decreased by 2 per cent. The global
demand for construction equipments
remains uncertain this year.
Emerging markets like India, Russia
and China are expected to be the
driving force. After the downturn in
2012 and continuing decline in 2013,
a slight upward swing is expected in
the second half of 2014.
Tell us about the VDMA construction
equipment industry initiatives
towards reducing carbon
emission.
For the past 10 years the European
construction equipment industry has
a proven track record of increased
product process and energy
efficiency, consequent reduction in fuel
consumption and engine emissions.
The European construction equipment
industry is strongly committed to CO2
to NOx and to particulate reduction,
but with a realistic and sector specific
approach.
Would you like to share your
thoughts towards India’s needs to
absorb building material technology
for high-rise building in order to
mitigate labour shortage and cost
escalation?
India needs to adopt various
building material technologies like
the mass concrete construction

through innovative instruments are
positive measures.
Some revival in capital expenditure
cycle is expected with the proposed
investment allowance of 15 per cent for
companies investing more than Rs 1
billion in plant and machinery over the
next two financial years.
Furthermore, continued focus on
increasing the availability of long-term
funding sources for infrastructure
projects is positive, considering the
significant planned investments on
infrastructure in the 12th Five-Year Plan.
Factors including the stimulus given
by the government for infrastructure
development, and continual articulation
of the government about the thrust given
to infrastructure development are giving
big boost to the growth of the Indian
infrastructure and the construction
equipment industry. However, to fully
realize the potential, there should be
concerted and well-coordinated efforts
by the industry and the government.
The increased allocation for
infrastructure sector can pave the
way for Indian construction companies
to utilise energy efficient and robust
technology offered by the German
construction equipment and building
machinery suppliers.
Would you like to share export trends
from Germany to India towards
construction and building material
machinery in the past five years?
In 2012, the trade between India

Would rapid urbanisation of tier-2,
-3 and -4 cities enhance the scope
for VDMA construction and building
material machinery in India?
The Indian construction industry
increased in value at a CAGR of 15.10
per cent during the period 20082012. This growth was supported by
the country’s expanding economy,
increased government spending
on public infrastructure, high
urbanization and supportive foreign
direct investment (FDI) system.
The construction industry growth
is expected to remain strong over the
forecast period 2013-2017, as a result
of the government’s commitment to
improving the country’s infrastructure.
The Indian construction industry’s
output is expected to record a CAGR
of 15.45 per cent over the next five
year period.
The general outlook for
construction activity during the fiveyear forecast period is positive.
Construction activity in residential
market will be driven by demand side
factors, such as growth in nuclear
families and the rising urbanization
rate, as well as government support
and state investment in affordable
housing schemes.
As a result, the construction
equipment sector in India, which has
been witnessing robust demand in
recent years, stands to gain maximum
due to rapid rise in construction
activity in future.

ports


16

‘Energy sector will drive demand
across major, minor ports’
With 13 major ports and more
than 180 minor ports, India’s 7, 517
km long coastline plays a vital role in
maritime transport along with offering
huge international trade capabilities.
Being a focus area for development
and refurbishment, Indian ports are
increasingly becoming an attractive
investment option for investors scouting
for opportunities in Indian market.
The current port scenario in the
country offers a huge scope for
expansion of international maritime
transport; both for passengers and
cargo handling. India’s 12 big ports,
which account for about 58 per cent
of the total cargo shipped through the
country’s ports, handled 137 million
tons (mt) of goods in the first quarter
of FY14.
Container cargo volumes at these
12 ports stood at 1.87 million standard
containers during the reported quarter,
according to data compiled by the
Indian Ports Association (IPA) as per
research reports by IBEF.
Cargo growth at Indian ports was
estimated to be moderate in the past
two years, with the overall increase
in throughput at 4 pc y-o-y. What has
been the impact in cargo volumes
at major ports (1.6 pc y-o-y rise)
because of a significant reduction in
volumes of iron ore, a major cargo
category, following Karnataka’s
banning of iron ore exports since
August 2010?
The sharp decline in export and
import volumes being handled at
major ports is basically due to the
growth slowdown of the Indian
economy. The fiscal ending March
2013 saw cargo handled by the 12
major ports shrink by 2.5 per cent, to
545 million tons (mt), from 561mt in
2011-12. That makes it the lowest in
last four years. Major ports handled
about 60 per cent of cargo handled
across ports, according to 2011-12
data.
The primary reason for a drop in
the performance of major ports is
the drop in iron ore exports since
expected exports to China did not
take place. Further, Karnataka had
placed a ban on iron exports as well.
So this was double whammy.
We are aware that commerce
ministry as well as finance ministry is
grappling with this problem of poor
exports -- since this has been the
singular factor for our jump in current
account deficit to almost 5.7 per cent
of Gross Domestic Product (GDP).
A lift in our trade figures would
automatically translate to higher
business for our ports and other
ancillary services. We are keeping our
fingers crossed and are expecting
that India would perform better in
International trade in the current
fiscal.

The Dighi Special Economic Zone (Sez) is
a duty-free enclave, deemed to be a foreign
territory for the purpose of trade operations,
duties and tariffs. It is a multi-industry Sez,
with a land bank of over 2,000 acres as one of
the largest ports based Sez in Maharashtra.
The port is currently planning two river banks
which give a unique advantage of handling all
types of cargo where on completion will have
16 terminals. Vijay G. Kalantri, CMD,
Dighi Port Ltd delved into the port sector
in this interaction with Remona Divekar.
Excerpts:

How does the company deal with
the interest rate, regulatory risks
emanating from an evolving policy
environment; cargo concentration
risk particularly for entities having
a high exposure to iron-ore cargo
given the ongoing uncertainties in
iron ore mining activities in various
states?
Dighi Port is all-weather, direct
berthing, deep draft port which is
capable of handling dry bulk, breakbulk, liquid, LNG and Ro-Ro cargo. At
present only one berth is operational
and remaining four berths are under
construction.
The port is handling cargo such as
coal, bauxite and steel. All the berths
that are being constructed are being
developed as multipurpose and multi
cargo berths, which are capable of
handling all types of cargo.
Dighi Port is not dependent on a
single cargo type and is geared to
handle all types of cargo. Hence the
ban on iron ore mining and handling
iron ore will not impact on the port
in any way.
What is the possibility of temporary
capacity overhang in some cargo
segments and incremental risks
associated with expansion in scope
of business/inorganic growth?
There is definitely a high possibility
of capacity overhang in some cargo
segments and other incremental
risks such as project execution risks
given that many port companies are
in a moderate to large scale capital
expenditure mode, the hardening
interest rate, the environment and
regulatory risks emanating from
an evolving policy environment
and lastly cargo concentration risk
particularly for entities having a high
exposure to iron-ore cargo given the
ongoing uncertainties on iron ore
mining activities in various states.

India’s long coastline of over 7,500
km is home to the country’s 13
major ports1 and around 200 minor
ports located along the western and
eastern corridors. While the number
of non-major ports is large, only
about one-third of them undertake
regular commercial operations?
What business opportunities does
Dighi port explore?
A majority of the non-major ports
are mainly fishery and intermediate
ports. These ports carry out lighter
age operations which plays an
important role in keeping major ports
less congested. Most of the major
ports are getting choked due to
high demand hence cargo is getting
diverted to the nearest non-major
port.
Pipavav, Mundra and Dahej are
few ports in Gujarat which had
an advantage due to the lack of
infrastructure at major ports to cater
to the high demand and are currently
handling large volumes as compared
to other non-major ports.
Dighi Port is ideally located to cater
to the west and central India markets.
The port is located at a distance of
42NM from Mumbai Port and at a
distance of 170 km south of Mumbai
by road. Due to its favorable location
and proximity to Mumbai, Dighi Port
is being seen as the next port of
choice on the West Coast of India as
ports in Mumbai are operating above
capacity and are facing issues such
as congestion and slow turnaround
of vessels. Maharashtra is having
ample amount of customer base for
the upcoming port like us.
Further, as Dighi Port is being
developed on two banks of the
Rajpuri Creek as an all-weather, deep
draft, direct berthing, multipurpose
and multi cargo port capable of

handling dry bulk, break-bulk, liquid
and LNG cargo, it has the capability
to handle all types of cargo with the
advantage of segregating dirty and
clean cargo to a particular bank.
The port offers a large land bank
in excess of 1,500 acres and close to
5 km of waterfront for development
of additional berthing facilities for
cargo types which require dedicated
infrastructure.
Dighi Port is also the only port
in Maharashtra that is developing a
port-based Sez and FTWZ. Last but
not the least, Dighi Port is the last
node of the Delhi Mumbai Industrial
Corridor (DMIC) and has also been

included as one of seven mega
National Investment & Manufacturing
Zones (NIMZ) under the Government
of India’s new manufacturing policy.
Hence the opportunities galore
for Dighi Port which is geared up
for handling these opportunities
efficiently and effectively.

Since the last decade, the Indian
port sector has been witnessing
certain structural changes, with
state monopoly (viz. the major ports)
gradually giving way to greater
private sector participation in port
investment activity. What is your
take including the large investments
required to scale up port capacity,
besides the need to improve service
levels and efficiency?
There are some critical key issues
hindering growth of the Indian
Port Sector as compared to the
international ports. Investments need
to be made in the following areas in
order to improve the infrastructure
and to scale up existing capacity at
Indian ports.
Increase capacity: As per the
latest statistics around 8 of the
13 major ports are operating at
more than optimum range of 70-75
per cent utilization. Further, four
of these, namely, Vizag, Tuticorin,
Mormugao, and Mumbai ports are
experiencing more than 100 per
cent utilization. Correspondingly,
the average capacity utilization at
non-major ports was ~ 77 per cent
in 2009-10.
Capacity at existing ports needs
to be increased so that they can
cater to the demand of the Exim
trade in an efficient and effective
manner. Capacity constraints at major
ports are resulting in slower vessel
turnaround times, thus increasing
congestion at these ports resulting
in higher cost to the trade.
Inefficient cargo handling &
low productivity: Cargo handling
equipment and services primarily at
most Indian ports are inefficient. Most

berths do not have dedicated cargo
handling facilities necessary for the
quick handling of cargo.
As per the study carried out in
2010 by the Controller and Auditor
General of India (Cag), it was
observed that around 55 per cent of
the equipment available at all ports,
except at the Jawaharlal Nehru Port
Trust (JNPT), were running beyond
their rated economic lives, resulting
in low utilization. Apart from that, wide
variations were observed in efficiency
levels among the 13 major ports.

Construction Review Issue 35-2nd anniversary special-2013

Construction Review Issue 35-2nd anniversary special-2013

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Construction Review Issue 35-2nd anniversary special-2013