Cir 34 final 2014

August 25-31, 2014 1
An MMR, Braj Binani Group Publication Volume 3 l Issue No 34 l August 25 - 31, 2014 l Price: Rs 100
`16 lakh cr yearly funds
needed to meet
‘housing for all by 2022’ target
Over Rs 16 lakh crore ($260 billion)
per annum need to be invested to
achieve the Central government’s
vision of ‘Housing for all by 2022’,
indicates a recent report.
According to the KPMG-National
Real Estate Development Council
report, about Rs 9.5 lakh crore (Rs 150
billion) is currently invested annually in
the real estate sector, of which about
80 per cent or Rs 7.5 lakh crore (Rs
130 billion) is invested in housing
development. Thus, investment in
housing needs to be doubled, which
can be achieved if investments are
steadily increased by 12 per cent to
13 per cent per annum.
With almost a fifth of urban and rural
households having limited access to
housing facilities, the country needs to
build 30,000-35,000 units per day for
the next eight years, the report said.
“Large-scale development of
affordable housing projects is still
a challenging proposition for many
private developers,” the report said.
The current housing shortage in
urban areas is estimated at 19 million
units. Of this, about 95.6 per cent is
estimated to be from economically
weaker sections (EWS) and low
income group (LIG) households who
cannot afford houses costing above
Rs 15 lakh.
“The government’s vision of
‘housing for all by 2022’ requires more
than $2 trillion to be spent in the next
eight years to build 9 crore houses.
The investment in the sector, which
has grown at less than 2 per cent per
annum in recent years, needs to grow
at about 12 per cent to 13 per cent
per annum (unadjusted for inflation),”
said Neeraj Bansal, partner and head
of real estate and construction, KPMG
India.
“Strong reforms targeting higher
flow from lending institutions (banks
and non-banking finance companies),
households, private savings and
foreign capital are the need of the hour,
which can be achieved by developing
long-term financial instruments for
the real estate sector, opening up
external commercial borrowings,
incentivising housing investment,
developing public private partnership
mechanism, streamlining approval
mechanism, and reforming the Rent
Control Act.” said Bansal.
Centre to invite
bids from cement
companies
Home loans for needy
set to get even cheaper
‘Ample scope for housing
prices to relax’: Mundra
In a first-of-its-kind step, the
government is inviting bids from
cement companies to arrive at a
cheapest possible price for procuring
the raw material. The move is seen
as an attempt to boost road and
highway development by lowering
the cost.
The highway ministry will soon
invite the public and private sector
cement companies to quote their
ex-factory prices to find the cheapest
rate available. Then the ministry will
inform private contractors about
cement companies which are ready
to offer the cheapest rate for a
particular period. The cheapest rate
will also be informed to developers
and contractors of other government
projects like residential housing.
Home loans for the underprivileged
are set to get even more affordable
with the government planning a new
interest subvention scheme which will
meet part of the home loan burden.
Speaking on the side lines of
a real estate event in Mumbai,
Finance Secretary GS Sandhu said
that the government would shortly
announce an enhanced subvention
for affordable home loans. He said
that under the scheme there would be
interest subvention up to 5 per cent
for loans up to Rs 5 lakh rupees.
Sandhu said that the new
government had big plans and vision
for affordable housing. “A blueprint
on affordable housing plan is being
prepared and the government is clear
“Since cement companies can
expect bulk orders, they can actually
offer cheaper rate. Once we arrive at
a base price, we will calculate the
cost of greenfield cement concrete
projects,” said a ministry official.
On August 19, Road Transport
Minister Nitin Gadkari told road
engineers that already six cement
companies have submitted their
letters to offer the raw material at
Rs 160 per bag of 50 kg against
the prevailing market price of Rs
300-350.
Sources said the heavy industry
ministry has also proposed that
cement produced by four public
sector companies may be procured
for road projects at lower rate.
that they want time-bound results,”
said Sandhu.
He added that at present most
of the burden falls on public sector
banks and going forward real estate
investment trusts could be a game
changer for the sector.
Interest subvention refers to the
subsidy that the borrower gets from
the government which makes good
the discount given by the lender. The
UPA government had introduced 1
per cent interest subvention in its
budget for 2009-10. The scheme
was introduced in the aftermath of
global financial crisis to revive the
economy. The UPA government had
also introduced 3 per cent interest
subvention on loans to farmers.
SS Mundra, the Reserve Bank of
India Deputy Governor, said there is
enough scope for housing prices to
come down from the current highs
because there is a huge pile-up of
inventory.
Pointing out that the cost of houses
is still very high, he said improving
affordability of houses is important
in a country where more than 60 per
cent of the population lives on less
than $2 a day.
Referring to the counter argument
that taxes account for 22 per cent of
the housing cost, Mundra said, “More
progressive construction technologies
and several other measures can make
it possible to make houses less costly
than what they are today.”
Mundra’s comments come in
the backdrop of the huge housing
shortage in urban India, estimated at
18.78 million in 2012 and expected to
rise to 30 million by 2022.
Of the total housing shortage
of 18.78 million in urban India, the
shortage in the economically weaker
sections and lower income group
categories stood at 10.55 million and
7.41 million, respectively, according
to the report of the government’s
technical group of urban housing
shortage.
Regarding demand from individuals
for second and third houses, Mundra
observed that at this stage of the
country’s economic development bank
credit is needed more for creation of
productive assets.
“We would not like to create a
situation whereby there is artificial
demand in the housing sector,” he
said at a conclave organised by the
National Real Estate Development
Council.
He said given the relatively better
asset quality in the housing and real
estate sectors, banks have a natural
incentive to keep on lending to these
segments.
SS Mundra, Deputy Governor,
Reserve Bank of India
On the common refrain that
commercial banks have stopped
lending to the housing and real estate
segments in the past four-five years,
the Deputy Governor said, “Our
review of the extent of loans to these
segments as a whole gives a little
contrary picture, indicating that the
loan growth in these segments has
been quite robust.”

INFRASTRUCTURE August 25-31, 2014 3
Bearing technologically strong fruit
Order intake increase
Order intake from continuing
operations came to €31.1 billion
in the first nine months, up 5 per
cent year-on-year despite negative
exchange rate effects (prior year
€29.6 billion). On a comparable
basis, that is, excluding currency
and portfolio effects, order intake
increased by 6 per cent. The third
quarter order intake was €10.2 billion,
up 8 per cent year-on-year (up 5 per
cent on a comparable basis).
Sales from continuing operations
at €30.1 billion in the first nine months
(prior year €28.6 billion) and €10.7
billion in the third quarter (prior year
€9.9 billion) were higher year-on-year
in all business areas except
Steel Europe, where sales fell due to
disposals. On a comparable basis,
sales increased year-on-year by 6
per cent in the first nine months and
5 per cent in the third quarter.
The Group’ s ne t f ina nc i a l
debt decreased compared with
September 30, 2013 from €5.0 billion
to €4.1 billion in the first nine months,
equity increased from €2.5 billion to
€3.2 billion, and gearing therefore
improved significantly by around
71 percentage points to 129.9 per
cent.
Positive areas
Componen t s t e c h n o l o g y
continued its good performance
in the third quarter, profiting from
sustained strong demand on the
car markets (above all in China and
the Nafta region) and increasing
demand for wind turbine components
in China.
In the first 9 months, order intake
and sales both increased year-on-year
by 9 per cent to €4.6 billion
(prior year both €4.2 billion). On a
comparable basis the increases
were 13 and 12 per cent respectively.
Adjusted EBIT in the first nine months
came to €208 million, up €25 million
from the comparable prior-year
period (prior year €183 million). The
strong performance was mainly
due to higher sales and efficiency
gains under performance programs
initiated in the prior year.
Elevator Technology continued to
perform positively and increased its
order intake in the first 9 months by 3
per cent to €5.1 billion (prior year €4.9
billion), mainly thanks to pleasing new
installations business in China, the
USA and South Korea.
On a comparable basis the
increase was 7 per cent. Sales at
€4.6 billion were also 3 per cent
higher year-on-year (prior year €4.5
billion); on a comparable basis the
gain was 8 per cent. The positive
performance was also reflected in
improved adjusted EBIT, which in the
ThyssenKrupp third
quarter operating
targets achieved or
slightly exceeded full-year
forecast where net
income now expected
at break-even to slightly
positive
T h e t r a n s f o r m a t i o n a t
ThyssenKrupp is bearing fruit. After
a strong third quarter, the Executive
Board of the Essen-based industrial
group is optimistic for the full year
2013-2014. Order intake, sales and
adjusted EBIT increased as expected
in both the first nine months and the
third quarter.
In the first nine months the
Group achieved net income (after
minority interest, full Group) of €243
million (prior year net loss of €527
million), to which the third quarter
contributed €39 million (prior year €
395 million).
Achieve break-even
The main drivers of the good
performance were as expected the
efficiency gains, the profitable growth
of the capital goods businesses,
and the significant improvement at
Steel Americas. On this basis the
Executive Board has again raised
its forecast slightly for the current
fiscal year. Full-year adjusted EBIT is
now expected to double (prior year
€586 million). For the first time in
three years, ThyssenKrupp expects
to achieve break-even to slightly
positive net income.
“We are making good progress
on our path to becoming a new,
integrated and more performance-focused
ThyssenKrupp. For seven
quarters we have continuously
increased our earnings through
our own efforts,” says Dr Heinrich
Hiesinger, CEO of ThyssenKrupp
AG.
“We are moving in the right
direction, our strategy is working,
and our operating measures are
clearly taking effect,” he added.
Adjusted EBIT from continuing
operations increased to €953 million
in the first nine months, up 120 per
cent from the prior year (prior year
€433 million).
Adjusted EBIT in the third quarter
came to €398 million, almost three
times higher than the corresponding
prior-year figure (prior year €136
million). In the first nine months,
five of the six business areas
improved their margins. In the third
quarter all business areas including
Steel Americas generated positive
contributions.
first 9 months rose by 9 per cent to
€531 million (prior year €487 million)
despite negative exchange rate
effects.
With adjusted EBIT of €193
million in the third quarter, elevator
technology not only achieved new
record earnings but also increased
its margin year-on-year for the third
quarter in succession to now 12 per
cent.
Long planning certainty
At Industrial Solutions, order intake
in the first nine months was up by a
further 3 per cent year-on-year at €4.5
billion; on a comparable basis the
increase was 7 per cent (prior year
€4.4 billion). The high order backlog
of €14.6 billion at June 30, 2014
provides long-term planning certainty
and capacity utilization for the next
two to three years.
Sales in the first nine months rose
was 13 per cent higher at almost €10
billion (prior year €8.8 billion), on a
comparable basis the increase was
4 per cent. Sales rose by 12 per cent
to €9.8 billion (prior year €8.8 billion);
on a comparable basis – particularly
excluding VDM and AST – sales
were level with the prior year. As a
result of intensive sales initiatives
and performance programs, adjusted
EBIT in the first nine months was
flat at €148 million (prior year €160
million).
Decrease in business
Steel Europe reported a decrease
in business volume in the first nine
months due to disposals and prices.
Shipments decreased in total by 2
per cent, but on a comparable basis
increased by 1 per cent. In the third
quarter shipments were 8 per cent
down from the prior quarter mainly
because of a drop in production due
cent respectively year-on-year. On
a comparable basis, orders were
up by 15 per cent and sales by 14
per cent.
This was due to higher volumes and
prices. Adjusted EBIT in the first nine
months improved by more than €300
million to € 27 million. Key reasons
for this significant improvement
included higher and more efficient
capacity utilization, lower costs, and
the positive impact of market prices in
the USA. In the third quarter adjusted
EBIT came to €16 million.
Centre modifying allocation
method for highway projects
In a bid to fast-track award of
highway projects, and thereby
construction, the government is
redesigning the way projects are
allocated based on assessment of
their viability. According to sources,
projects would now be bid out in three
ways: in cases where no viability gap
funding (VGF) is seen to be required,
the build-operate-transfer (BoT) toll
model will be adopted.
As regards projects which are
likely to be viable with the support of
VGF of up to 20 per cent, the NHAI will
formulate both the BoT (toll) and the
EPC models and leave it to the Road
Ministry to take a final call on which
way to go. In the third category of
projects which are not going to work
on the BoT (toll) model with VGF up
to 20 per cent, the EPC model would
straightway be followed.
While the focus has largely shifted
to the EPC model due to lukewarm
response to PPP projects, the NHAI
has so far this year awarded seven
highway projects with total length of
798 km. The authority is in the process
of inviting bids for another 394 km of
projects.
Of 13 projects for which bids were
invited earlier for 1,115 km, the larger
chunk of 841 km was on EPC mode
and 273 km on BoT. In addition, 11
proposals are being evaluated by the
inter-ministerial PPP-appraisal panel
involving construction of 1098 km
of highways, of which 1,010 km is in
EPC mode.
Sources said the new strategy has
been adopted after a detailed talk
between NHAI Chairman RP Singh
and Road Transport Highways
Secretary Vijay Chhibber, in line with
Highway Minister Nitin Gadkari’s
plan to fast-track the process of fresh
awards.
“Such a strategy will bring clarity
for the government to assess how
receptive investors are to the highway
sector and launch bids in conformity
with market realities so that the
projects awarded don’t fail at a later
stage,” said an official from the Road
Ministry.
11 per cent to €4.5 billion (prior year
€4.0 billion); on a comparable basis
sales were 15 per cent higher. They
benefited from the recognition of
revenues from a number of major
contracts, particularly at process
technologies.
Adjusted EBIT in the first nine
months increased by €86 million, or
18 per cent, to €562 million (prior year
€476 million) as a result of the order
billings at process technologies and
efficiency gains in all business units.
In a difficult price and competitive
environment, material services
performed well in the reporting
period, thanks to higher volumes.
The inclusion of VDM and AST as
of March 1, 2014 affected sales and
order intake to the tune of €1 billion
each and adjusted earnings in the
amount of € (5) million.
Order intake in the first nine months
to operational issues and disruptions
to production and shipping logistics
due to storm Ela.
In the first nine months order intake
was 6 per cent lower at €6.9 billion
and sales were 9 per cent lower at
€6.7 billion (prior year order intake
and sales both €7.3 billion); on a
comparable basis order intake was
largely stable, sales decreased by 2
per cent. The measures implemented
under the ‘Best-in-Class Reloaded’
programme already had a significant
positive impact on earnings. Adjusted
EBIT in the first nine months came to
€184 million, an improvement of €83
million on the prior-year period (prior
year €101 million).
At Steel Americas, order intake at
€1.6 billion (prior year €1.6 billion)
and sales at €1.5 billion (prior year
€1.5 billion) in the first nine months
increased by 2 per cent and 4 per

INFRASTRUCTURE August 25-31, 2014 4
Modi lays foundation
stone for `4,000 cr road
project in Haryana
India, US working on easing
investment in infra
Reliance Cements to open
two units in K’taka
Prime Minister Narendra Modi laid
the foundation stone for widening of
a road project in Haryana that entails
Rs 4,000 crore investment. The Prime
Minister launched four-laning of over
160 km national highway from Kaithal
to the border of Haryana-Rajasthan
at a function at Kaithal in Haryana last
week. The investment includes civil
and construction cost, and would be
implemented under public-private-partnership
(PPP) mode, said an
The US and India are working
on a bilateral mechanism that will
help ease flow of investments
from American companies into
infrastructure projects in India. The
proposal, which has been made by
the US Department of Commerce,
will establish a platform to assist US
investors in infrastructure navigate
through regulatory and procedural
hurdles in the country, said an official
in the Department of Industrial Policy
Promotion (DIPP). A Memorandum of
Understanding (MoU) on ‘cooperation
in infrastructure investments’ is to be
With availability of limestone
in sizeable quantity across North
Karnataka districts, there has been
a heightened activity in terms of
greenfield cement manufacturing and
packaging companies in the State.
One such major company which
intends to set up shop in Karnataka
is Reliance Cements. Reliance will set
up two units, one manufacturing and
a quarrying unit in Sedam taluk of
Gulbarga district and another grinding
unit in Gowribidanur taluk.
As per the pre-feasibility Report
for the Sedam project, submitted to
the Union Ministry of Environment
Forests (MoEF), Reliance has said
that it will be setting up an integrated
official. This road passes through
Kalayat, Narwana, Barwala, Hisar
and Siwani towns and will benefit
people of four districts in terms
of improving the living standard,
safe connectivity and economic
prosperity.
Twe n t y - t h r e e u nde rpa s s e s
and over 20 km service roads are
proposed in the project near villages
which will ensure the safety of the
pedestrian and people residing in
signed by both countries during
Narendra Modi’s visit to the US next
month.
“We have sent back a communication
to the US Department of Commerce
indicating our willingness to go ahead
with their proposal and have also
given some inputs from our side. We
will start work on a Cabinet Note for
the same as soon as the US reverts,”
said the official.
India needs investments worth
$1 trillion in the infrastructure sector,
which offers huge opportunities to
foreign investors. Foreign funds
5.5 mtpa cement plant with a 3.6 mtpa
clinker and 75 mw power plant.
It is also setting up a 5 mtpa
limestone mine in Tilkur and Hebal
villages located in the same vicinity.
Reliance is expected to complete the
project in 24 months, once approved
by the Karnataka government.
The project cost is estimated to be
Rs 2,600 crore for the Sedam cement
plant. For mining activity, Reliance has
placed the initial cost at Rs 319 crore.
According to the company report,
Reliance received a Letter of Intent
(LoI) from the Department of Mines
Geology in Karnataka to mine on
929.12 hectares at Tilkur-Hebal village
in Sedam.
the vicinity of the road.
It will further attract investments
in various sectors like industries,
educat ional ins t i tut ions , and
agriculture etc. Haryana governor
Kaptan Singh Solanki, Minister
for Road Transport, Highways
Shipping Nitin Gadkari, Minister of
State for Road Transport Highways
Krishanpal Gurjar and senior leaders
of the state participated in the
foundation laying ceremony.
can flow into the ambitious road
sector projects carried out by the
National Highways Development
Programme, the industrial corridors
being developed by the railways
where foreign investment rules have
recently been liberalized, and power
sector projects.
“American companies want to
bid for project contracts and also
supply more equipment. They want
to explore the PPP (public-private-partnership)
model. But they also
want some hand-holding,” the official
added.
Mid-size infra firms line
up for IPOs
Large infrastructure companies
such as GMR Infrastructure Ltd and
Jaiprakash Associates Ltd have been
quick to raise several thousands of
crore rupees by selling shares to
savvy financial investors, known as
qualified institutional investors, in the
past three months.
Now, several mid-size infrastructure
companies are looking to raise money
through initial public offerings, or
IPOs, in the next six to 12 months.
At least 10 such companies will raise
around Rs 6,000 crore, according to
several investment bankers.
Among the companies looking
to sell shares are Simhapuri Energy
Ltd, a subsidiary of Hyderabad-based
Madhucon Projects Ltd; the solar
unit of Hindustan Powerprojects Pvt
Ltd (HPPPL), a power generating
firm backed by private equity firm
Blackstone Group; Agra-based
engineering firm PNC Infratech
Ltd; Bhopal -based diversi f ied
infrastructure firm Dilip Buildcon Ltd;
Soma Enterprise Ltd; Power Mech
Projects Ltd; and the cold storage
chain unit of logistics company
Gateway Distriparks Ltd.
Most infrastructure firms are
looking to tap the capital markets
for raising funds. Several of them
will be looking to file documents with
the Securities Exchange Board of
India in September or in the next three
to four months as the fund raising
window still remains open,” said
Subahoo Chordia, head, infrastructure
and investment banking, at Edelweiss
Financial Services Ltd.
Over the past decade, and
especially over the past three to five
years, infrastructure companies have
seen their books swell with debt that
they have been unable to service—
largely on account of delays in land
acquisition, environmental clearances
or securing fuel supplies (in the case
of power plants).
Foreign investors see land acquisition
as major irritant
Adani Group set to expand
Dhamra Port’s capacity to 100 mt
Problems in land acquisition and
delayed clearances from all relevant
departments, including Environment
Forests, are seen as major irritants
by foreign investors.
Earlier this year, Nisha Biswal, US
Assistant Secretary of State for South
Central Asia, openly criticised India
for ranking 134 out of 189 countries
Gujarat-based Adani Group said
it was all set to expand the Dhamra
Port’s capacity to 100 mt per annum
in Odisha’s Bhadrak district. “We are
going to start work on expansion of
the Dhamra port. Orders have been
placed for the purpose. Our vision is
to build the Dhamra port on the scale
of the Mundra port,”said Adani Group
chief Gautam Adani, after meeting
Chief Minister Naveen Patnaik and
Chief Secretary G C Pati.
The company, which acquired the
Dhamra Port from LT and the Tatas
by paying about Rs 5,500 crore,
targets to enhance the port’s capacity
from 25 mt to 100 mt. Dhamara Port
Company Ltd (DPCL) Chief Executive
Officer Santosh K Mohapatra said,
“DPCL had sought 700 acres of land
for the expansion project which was
sanctioned by the state government.
We will begin work on expanding the
port capacity soon.”
in a survey on best countries to do
business with.
She said despite India targeting
$1 trillion in infrastructure investment,
its policies still inhibited foreign
investment. The bilateral mechanism
would provide a platform where
American companies can not only
discuss opportunities with Indian
An equal joint venture between
LT Infrastructure Development
Projects (IDPL) and Tata Steel,
Dhamra Port Company Ltd (DPCL)
was commissioned in May 2011 with
an 18-km approach channel and a
dedicated 62.7 km rail link to Bhadrak.
In May, it had executed a pact with
both the companies to acquire the
Port for about Rs 5,500 crore.
officials and businesses, but also
discuss problems and how to get
around them,” said the official. The
US was India’s top export market last
year. FDI flow from the country was
to the tune of $806 million during the
year, which was just 6 per cent of the
total FDI.

August 25-31, 2014 5
CONSTRUCTION
Challenges in ‘going Green’
The industry faces increasing pressure
on their response to waste, resource
use, carbon and energy management
and their supply chain.
Construction has been accused
of causing environmental problems
ranging from excessive consumption
of global resources both in terms of
construction and building operation
to the pollution of the surrounding
environment.
However, relying on the design
of a project to achieve the goal
of sustainable development, or to
minimise impacts through appropriate
management on site, is not sufficient
to handle the current problem.
Design stage
The aim for sus tainabi l i t y
assessment goes even further than
at the design stage of a project to
consider its importance at an early
stage, before any detailed design or
even before a commitment is made to
go ahead with a development.
However, little or no concern
has been given to the importance
of selecting more environmentally
The construction
industry is trying to
compete in an ever
‘greener’ market while
tackling challenging
economic, regulatory
and environmental
issues
Today, businesses across all
sectors a r e confronted with
innumerable challenges with the
issue of sustainability consistently
appearing at or near the top of both
public and private sector agendas.
The Indian construction industry forms
an integral part of the economy and
a conduit for a substantial part of its
development investment, is poised for
growth on account of industrialization,
urbanization, economic development
and people’s rising expectations for
improved quality of living. Construction
constitutes 40 per cent to 50 per cent
of India’s capital expenditure on
projects in various sectors such as
highways, roads, railways, energy,
airports, irrigation, etc and is the
second largest industry in India after
agriculture. It accounts for about 11
per cent of India’s GDP.
Key priority
In the current economic climate the
construction and demolition industry
is under ever increasing pressure
from government, clients and the
public to be seen as an industry where
sustainability is a key priority.
The construction industry is trying
to compete in an ever ‘greener’ market
while tackling challenging economic,
regulatory and environmental issues.
friendly designs during the project
appraisal stage; the stage when
environmental matters are best
incorporated.
The construction sector has
enormous environmental impact.
From a climate perspective alone,
buildings’ greenhouse gas emissions
are significant and growing fast.
Furthermore, construction materials
are responsible for tremendous
damage through mining, deforestation
and other impacts resulting from their
production and supply.
Wi thout ma j o r changes i n
practices, at some point this century
we will simply run out of some of
the key resources (such as certain
metals) required to keep up with the
explosive growth in building demand.
We are simply exploiting resources at
a much greater rate than the planet
can sustain.
While most current efforts in
sustainable construction projects
are put into energy efficiency,
sustainability is not limited to this
aspect. Another apparent trend is
that still too often thoughts on how
to make new buildings Green are
only addressed in the final stages
of construction (retrofitting). While
this practice is relevant to existing
buildings, it is the wrong approach
for new buildings. The vast majority
of successful sustainability elements
in a construction project go into the
initial design.
Pressure to reduce carbon
impact
In recent years the industry has
faced ever increasing pressure
to reduce the carbon impact of
materials and water use in the built
environment by embedding resource
efficiency principles in the design
and construction of new buildings,
infrastructure and refurbishment
projects.
Efficient and innovative design
and construction not only paves
the way towards a future of
sustainable construction, but also
reduces construction and facilities
management costs while providing
a competitive edge.
The move to a more sustainable
construction industry will pose
questions, but also offers major
opportunities to organizations.
Buildings and infrastructure should
now interact with their environment
including smart grids and sustainable
transport infrastructure.
The Green Building Challenge
(GBC) is the first international
collaborative effort to develop
an international environmental
assessment method. The prime
objective of the GBC was to overcome
the shortcomings of the existing
environmental assessment tools to
allow for regional variations in the
evaluation.
The Green Building Tool (GBTool)
has been developed to embrace
the areas that have been either
ignored or poorly defined in existing
environmental building assessment
methods for evaluating buildings
throughout the world.
Sustainable construction concerns
more than just the fabric of buildings.
Construction, maintaining and
occupying buildings accounts for
almost 50 per cent of the UK’s carbon
dioxide emissions. New innovative
and unique developments provide an
excellent opportunity to build homes
and offices that are better not only for
the environment, but have cheaper
construction and operation costs.
Funding constraints
The transition to becoming a
sustainable business is probably the
biggest change since the introduction
of IT. Companies and public sector
organisations are facing funding
and resource constraints while they
continue to wrestle with high energy
prices. They are also under pressure
from governments, regulators and
consumers to pay more attention to
environmental issues.
To comply with legislation and to
ensure competitiveness in future,
carbon and energy management
are key areas of focus for the
construction industry. The industry
faces increasing pressure to report
transparently on carbon emissions
and to implement energy efficiency
measures both in internal operations
and new builds.
Companies are going to need
the right expertise to deal with new
pressures and make the most of
new opportunities. We all have a
responsibility to build a sustainable
future and it’s important that the
construction industry meets these
challenges head-on.

PROJECTS UPDATE August 25-31, 2014 6
Centre okays single
platform for all projects
The Centre has launched a fresh
initiative to help companies get over
five dozen approvals to start a project
through a single online platform as
part of its attempt to make it easier to
do business.
The Project Monitoring Group
(PMG) in the cabinet secretariat
had initially identified two dozen
approvals that are required from the
Central government, while another 35
clearances needed from the states
but the first round of discussions
has shown that the number of online
approval is set to rise significantly.
Therefore clearances from the
Sebi, the Employees Provident Fund
Organization, the Reserve Bank of India
as well as from states, including those
related to the land acquisition law,
town and country planning department
or the Electricity Act will be available
through one platform, e-biz.
The idea is to digitize the processes
and then get on e-biz, which was
conceived five years ago by the
department of industrial policy and
promotion but has failed to take off
as other government agencies have
refused to cooperate.
As a result, investors can only
get two clearances — an Industrial
Entrepreneur Memorandum and
an Industrial Licence via e-biz. In
several cases, such as the EPFO
or the Employee State Insurance
Corporation (ESIC) registration, or
forest clearances, a facility to get the
approvals online is available, but not
through e-biz, the site meant to get
approvals in one place. Over the next
few months, environmental clearances
will go online, but again will not be on
e-biz. There are several areas such as
railways, where there has been little
effort on putting together an electronic
clearance mechanism.
At the same time work has started
on reengineering the clearance
mechanism and stakeholders,
including industry representatives
have been contacted, to simplify the
system. In several cases, such as the
Companies Act, where the process of
digitization has been cleared, several
clearances have to be routed via the
e-biz platform, which will go beyond
registering companies and getting
a director’s identification number
(DIN).
In a lot of cases, officers said, the
problem lies with the software. For
instance, the Directorate General of
Foreign Trade was trying to link its
electronic bank realization certificate
(e-BRC) set up with the RBI and
customs platforms but had run into
software glitches as the vendors were
different.
In the 24-odd central laws or
notifications that are being studied by
PMG, Infosys and the government’s
National Informatics Centre (NIC) are
the software developers, while other
companies have been roped in by
government agencies.
Although states such as Andhra
Pradesh and Delhi had shown interest
in joining the e-biz project, the Centre
has failed to get them on board and
PMG is now working to move to a
single platform as well.
Panel formed to clear
green hurdles to
road, rail projects
To ease bureaucratic hurdles
To reduce dependence on roads
for cargo movement and to reduce
the costs, JNPT, country’s largest
container port, will be setting up
satellite ports at Wardha, Aurangabad
and Surat, Shipping Minister Nitin
Gadkari said recently.
Wardha and Aurangabad (both in
Maharashtra) will have dry ports from
where the cargo will be moved by
railway, while at Surat there will be a
water port, Gadkari said.
He was speaking at a function at
the Jawaharlal Nehru Port Trust (JNPT)
in the presence of Prime Minister
Narendra Modi who laid foundation
stone for an SEZ.
hampering infrastructural growth, the
PM-appointed ministerial committee
on infrastructure has decided to
clear outstanding issues involving
railways and green clearances for road
projects. According to sources, there
are about 150 road projects worth over
Rs 50,000 crore which are stuck due to
pending clearances from both railways
and the environment ministry.
The first meeting of the committee
took place recently.
It is understood that all the three
ministers – environment minister
Prakash Javadekar , road and highway
minister Nitin Gadkari and railways
minister Sadananda Gowda – decided
that the environment ministry would
soon delegate powers directly to the
states and regional offices to give a
green nod to linear projects involving
forest land up to 40 hectares. Once
this is done then the move is expected
to ease almost 70-80% of `not-so-big’
but strategic projects, at the state level
itself without any interference from the
centre.
The MoEF also decided to consider
proposals to allow state governments
to give permission for mining of earth
such as sand up to 20 hectares as
against the existing norm of 5 hectares.
This relaxation will eliminate one level
of bureaucratic clearance and have
a spiralling effect on saving time and
increasing availability of this crucial
raw material for road construction.
Government officials said the road
ministry would soon put a formal
proposal to MoEF to take sand out
of the minor minerals list, because of
which the subject is referred back from
state to centre.
Czech expertise
to develop
semi high-speed trains
With an aim to get expertise in
running semi high-speed trains and
modernising signalling system of
Railways, India signed a Memorandum
of Understanding (MoU) with Czech
Republic. The MoU was signed
between Indian Railways and Czech
Railway for technical cooperation in
the field of railway sector, said a senior
Railway Ministry official.
Indian Railways, which has plans to
run semi high-speed train, will benefit
from the technical expertise of Czech
on the project.
Currently, Railways is on a project
to increase train speed to 160 km per
hour between Delhi and Agra. Once
the Delhi-Agra project is successful,
it plans to explore possibilities of
increasing the speed to 200 km per hour.
The potential cooperation areas
between the two countries also cover
automation of freight operations,
station development and workshop
modernisation.
The MoU is valid for a period of
three years and can be extended
for successive periods at one year
a time.
India seeks S’pore investments
in infra projects
India has sought investments
from Singapore in its infrastructure
and connectivity projects along the
ambitious Delhi-Mumbai and Chennai-
Bangalore industrial corridors as well
as in the north-eastern region.
Kicking off an year-long celebration
to mark 50th anniversary of the
establishment of bilateral diplomatic
ties jointly with her Singaporean
counterpart K. Shanmugam, external
affairs minister Sushma Swaraj said
the occasion will be used to advance
Bidding for Rs 10k cr Lucknow-Agra
Expressway complete
The bidding process for Chief
Minister Akhilesh Yadav’s dream
project, the 301 km long six lane
Lucknow to Agra Expressway was
completed recently. Senior officials
shortlisted the lowest bidders and
the final contract would be signed
shortly.
UP Expressway Industrial Authority (
UPEDIA) Chairman and CEO, Navneet
Sehgal said that financial bids had
been submitted by various developers
which were opened recently and the
bid evaluation committee identified the
lowest bidders.
PNC Infratech was found to be the
economic engagement, defence and
security cooperation between the two
countries.
Seeking enhanced investment
from Singapore, Swaraj said both the
countries should also look at scope
of venture capital for innovations
and for cooperative projects in
third countries. “We look forward to
Singapore companies to speed up
connectivity and infrastructure projects
in India, particularly, along the Delhi-
Mumbai Industrial Corridor (DMIC),
lowest bidder for the Agra-Firozabad
stretch, Afcons Infrastructure for
Firozabad-Etawah stretch, Nagarjuna
Construction Company for Etawah-
Kannauj, Afcons Infrastrcuture for
Kannauj-Unnao, and LT for Unnao-
Lucknow.
The Lucknow to Agra Expressway
has been divided to five stretches
or packages for handing out the
construction contract of the access
controlled way expressway would
be of 6 lanes extendable to 8. The
expressway will be built under the
EPC (Engineering, Procurement and
Construction) model, and will be
the Chennai-Bangalore Industrial
Corridor and the North-East. Singapore
could develop a virtual city or a ‘little
Singapore’ somewhere along the
corridor,” she said.
Swaraj also asked Singapore to
provide its expertise in development
of smart cities in India. The concept of
“smart cities” as satellite towns of larger
ones was enunciated in last month’s
budget by the new NDA government
which has allocated a sum of Rs.7,060
crore for the ambitious plan.
funded by the state government.
The government is also purchasing
land directly from the farmers for this
project. Officials said that land has
been acquired in most places and
the construction is expected to be
complete in 3 years.
Investment to the tune of nearly
Rs. 10,000 crore is expected in the
expressway which will also have
several manufacturing zones and
industrial clusters coming up alongside
it. The expressway is expected to cut
down the travel time between Lucknow
to Agra to under 4 hours from the
present 8 hours.
JNPT plans to build
three cargo ports

August 25-31, 2014 7
IN PERSON
‘Solar PV applications will play a
big role in achieving cost savings’
Fortum’s focus in India is on sustainable and energy-efficient power and
heat production and customer solutions. The company’s immediate priority
is on combined heat and power for industrial supply of power and steam.
Vickram Jadhav VP CHP Fortum talks about growth opportunities with
local partners, other forms of sustainable energy production and customer
solutions in this interview with Remona Divekar. Excerpts:
Fortum established an Indian
Liaison Office during the first quarter
of 2012 to evaluate investment
opportunities and carry out required
initial development efforts enabling
decision- making for Fortum’s future
investments in India.
In addition, as a second step
Fortum also established a private
limited company as of the third quarter
2012. Fortum has its operations
located in Gurgaon in the National
Capital Territory of Delhi.
In June 2013 Fortum acquired 5
mw solar power plant in the state of
Rajasthan, north-western India. The
company’s short-term ambition is to
build a small photo-voltaic (PV) solar
portfolio in order to gain experiences
in different solar technologies and
operating in the Indian power market
Fortum focus in India is to meet
India’s need for sustainable power
and steam generation, utilizing local
resources with high efficiency and low
emissions. Its immediate priority is to
assess investment opportunities in
combined heat and power (CHP) plants
to provide utilities for industrial clusters
and in investment opportunities in
solar PV and to provide expert services
for third parties for increased energy
efficiency.
Would you highlight your major
strategies for business expansion
in India?
As mentioned earlier, Fortum sees
India as a market with a great potential,
due to its geographical location and
high-energy requirements. In June
2013, we acquired 5 mw solar power
plant in the state of Rajasthan to
understand the market better.
The company’s short-term ambition
is to build a photo-voltaic (PV) solar
portfolio in order to gain experiences in
different solar technologies operating
in the Indian power market.
Our aim in India is to evaluate
investment opportunities contributing
to the development of India’s energy
infrastructure. We believe that Fortum
projects. Further, these projects create
REC benefit; however, this is not
recognized as yet.
How is For tum’s leadershi p
position in renewable technologies,
particularly CHP?
Fortum has extensive experience in
CHP production in Finland, Sweden,
Russia, Poland, the Baltic countries
and Great Britain. It is one of the
largest heat producers globally; we
own totally 31 CHP plants in Europe
and in Russia.
In 2012, CHP production accounted
for 32 per cent of Fortum´s total power
production and 79 per cent of the total
heat production. We have a very good
experience in using multiple fuels in
our CHP production, and we now aim
to bring this competence to India.
Our ambition is to use what we call
local fuels, that is, various types of
biomass or waste, whenever possible.
In India this could mean for example
What are the opportunities and
challenges for India?
Combined heat and power is not
a very new concept in India and the
current installed CHP generation
capacity is more than 7 gw. However,
these projects are largely captive
projects in different segments owned
by metal, sugar, chemicals, textiles
and other industries.
There has been limited development
towards large scale combined heat
and power plant supplying to process
industries. Moreover, heat prices in
India are much lower than power prices
which have led investors/developers to
focus on ‘power’ projects.
Additionally, the experience of
Indian players in the heat market is
limited, while most of heat consumers
currently produce heat from local fuels,
imported coal or furnace oil/diesel.
There are several reasons why new
investments in cogenerations are not
being taken up, including footprint
requirement regulatory issues, and fuel
logistics in India. The new innovative
plans are planned to produce heat
and power cogeneration to promote
investment in this segment.
The Group Captive SPV needs
to have an injection of equity by
the Group Captive Power Users
aggregating to 26 per cent and these
users need to consume 51 per cent of
has a lot to offer to the rapidly
developing Indian energy market,
based on our long track record in
sustainable power, heat production
and our energy market competence.
India is witnessing a robust growth
in energy demand with population
growth, rising standard of living which
is increasing consumption and energy
needs. At the same time, making the
best use of natural resources and
finding ways to mitigate risks resulting
due to increasing emissions from
power generation is also crucial to
India. This means that energy has to
be produced and used more efficiently
and in a smarter and sustainable way
in India in the future.
How does Fortum look at Market
India 2014 for renewable energy?
Renewable energy, especially solar
PV applications, are going to play a
big role in achieving cost savings for
cooling and heating applications. We
believe rooftop solar is also going
to reduce the cost burden for the
industries which are running on diesel
sets and will definitely reduce diesel
consumption.
Several cities in India, especially in
the southern and western part of India,
are witnessing significant traction in
rooftop installations. Hence, we believe
there is a case that open access
charges should not be applicable
to these sorts of renewable energy
coconut shell, cashew shell, rice or
coffee husk. We always strive to work
closely with local communities, and
using local fuels is one important way
to bring benefits locally as well.
What is CHP’s relevance to India?
We have observed that the concept
of CHP is not new to India, but there
is a need to have knowledge transfer
from global experts. We believe, CHP
compatibility allows for very high
primary fuel efficiency and also the
use of a wide range of fuels.
Through CHP, one can achieve the
efficiency level as close as 90 per cent
while efficiency with separate power
and steam production is around 35
per cent and 70 per cent respectively.
By locally centralizing the production
of heat and electricity, and supplying
industrial clusters, several benefits
can be gained for the industries and
society as a whole.
Combined heat and power
production in an industrial cluster
considerably increases the security
of supply, reduces the need for very
costly and mostly diesel-run, high
emission back-up power or production
losses due to industrial process
failures.
Moreover, by focusing on their core
operations, customers can reduce
their operational costs, optimize the
use of their land and capital, increase
efficacy by focusing on their core
competence and operate with an
overall more sustainable production
process, including fuel and waste
handling.
the power generated by the plant in the
same proportion 26/51.
In case this condition is violated
the SPV is penalized, making the
entire cost structure unviable because
many levies including cross subsidy
charges are charged. Open access:
The CHP plant will necessarily rely the
grid to export and supply the power
to its group captive users i.e. open
access.
In most of the states the DISCOMs
create impediments in practically
granting open access. Utility corridor is
required to lay steam lines, condensate
lines to supply steam to its users.
However the utility corridor is absent
or not planned for the CHP to construct
this utility corridor in most Industrial
clusters.
How is the Indian market
accepting the offerings from
Fortum?
Large scale CHP requires a long
term investment horizon on the part
of company which no company has
dabbled with till date. Also, CHP is
not yet a proven technology in India
and could create headwinds for new
investors in terms of returns.
Taking into account the technology
aspect and factoring in the host of
regulatory issues, CHP green field
investments need time to materialize.
Having said that, the benefits are
easily understood by the market and
therefore the initial response is good
in terms of clients’ interest and we
are confident to share some concrete
developments soon.

CONSTRUCTION August 25-31, 2014 8
Buildings Go
Smart!
Smart buildings are now
providing us with more
reliable, efficient and
environmental-friendly
places to work and live
manufacturers. If they decide to
replace one vendor’s system with
another – or add to the system with
another vendor’s equipment – they
can do so without dismantling the
existing technology and starting
over.
B y u s i n g a c o m m o n
c ommu n i c a t i o n s l a n g u a g e ,
hardware and software from different
companies can continue to perform
their important building operations
functions.The BACnet and LonTalk
communication protocols have taken
interoperability to a new level.
As more owners specify building
control systems utilizing open,
standard communications, they are
more assured of having equipment
flexibility. Specialty and legacy
protocols like ModBus and DHP
are s t i l l part of the intelligent
communications framework because
many meters, lighting devices and
industrial control devices utilize them.
A new set of protocols dedicated to
‘Smart Buildings’ is a short and
snappy term for ‘dozens of intelligent
systems that help to run a facility
more efficiently and are now ready
to deliver giant leaps in productivity.’
These systems – including sensors,
software, controllers and connections
– have been rehearsing for this
performance since the days when
connectivity, open architecture
and interoperability became new
industry buzz words. They have
been properly equipped for their
new journey. Their seat belts are in
place. And they’re ready to impress
top management with their enhanced
abilities to bring a dizzying array of
building-related data into crystal
clear focus to better aid in achieving
the organization’s goals. The great
promise of integration’s benefits is
finally being realized.
Owners are demanding more
information about the performance
of their buildings so they can reduce
operating costs, meet corporate
sustainability goals, and keep
occupants safe, comfortable and
productive. They are anxious to take
full advantage of recent technology
advancements, which this article will
explore.
Intelligent devices
New applications have emerged
that allow intelligent, standalone
bui lding management devices
to do much more than connect,
or ‘talk,’ to one another over a
standard communications network.
These devices are now able to have
meaningful ‘conversations’ that truly
tap into their embedded intelligence.
Working together, without human
assistance, they can predict trouble
and in many cases take preventive
act ions to avoid problems. I n
essence, smart buildings help
owners attain their facility-related
goals by optimizing the capability of
all equipment and systems across
their entire enterprise. Intelligent,
standalone systems still offer good
value for building owners, but
‘good’ isn’t good enough in this new
environment. Their productivity has
been hindered because there were
few applications that took advantage
of their brain power.
The intelligence has to be applied,
and now we have the applications to
help these systems live up to their full
potential. This has been the missing
chapter in the integration story.
Technology improvements also
have allowed greater control over an
entire enterprise of facilities, whether
in a single campus environment,
spread across the country, or even
in multiple countries. The time is ripe
for building owners to receive much
more value from their investment in
the many systems it takes to run a
21st century facility.
Great strides
Over the past few decades,
the building control industry has
made great strides in moving from
proprietary systems to an open
architecture that allows devices to
become interoperable.
This gives owners more flexibility
in choosing components from various
authorized at a high level in the
organization to reduce costs and
increase efficiencies.
Where are we now?
The fol lowing examples ar e
technologies that are currently
avai lable to forward- think ing
o r g a n i z a t i o n s : M a n a g i n g
sustainability goals; Chiller plant
optimization; Connecting to smart
grids Managing Sustainability Goals
For decades, building management
systems have automated the process
of providing just enough energy to
heat and cool buildings according
to established criteria – and then
closing the valves and dampers until
more air flow is required.
These energy efficiency measures
contribute to an organization’s
sustainability goals, such as tracking
and reducing greenhouse gas
emissions. But if the data is trapped
within the building management
system, executive-level decision-makers
may not find it.
until recently this was of limited value
because the communication was
both proprietary and included only
general information.
New technology permi t s a
common control communication
method (usually BACnet), which
allows for increased optimization
o f multiple c h i l l e r s across a
campus network – even if they
are from different manufacturers.
Sophisticated control algorithms,
compiled from extensive chiller
plant experience, enable chillers to
be operated more efficiently than
ever before.
Translat ion sof tware cal led
‘middleware’ gathers data from all
automated systems throughout
an enterpr ise – regardless of
manufacturer or communications
protocol – and merges it into a
common platform for analytics and
reporting.
This capability is referred to
gener i c a l l y a s chi l l e r p l a n t
opt imi z a t ion . I n t h i s con t rol
environment, chillers can achieve
much greater ef f iciency when
operating at off-design conditions –
which is how they spend 99 per cent
of their operating hours.
For example, many chillers can
utilize colder tower water than in a
traditional setting and provide higher-than-
design tonnage when outside
temperatures and humidity are less
than design maximums. Both of
an ideal place to start. Electric utilities
have been introducing programs
that allow real-time adjustment of
demand in addition to supply when
wholesale prices are high or when
grid reliability is ‘jeopardized.’
I n t e l l i g e n t c h i l l e r, p l a n t
optimization, automatically prevent
operating conditions that could
age equipment prematurely or
compromise reliability by comparing
intended loading with manufacturer
recommendations.
Speaking of weather
The following example provides
another i l l u s t r a t i o n of how a
smart building can save energy
by communicating with external
sources. Many organizations have
building management systems that
collect historical data regarding
energy consumption under certain
weather conditions. Why not go
a step further and have monthly
utility bills feed into the building
management system?
Then connect to the National
Weather Service’s web site to view
the weather forecast for the next
few days. You should then be able
to project your energy spend and
make proactive adjustments where
necessary to curtail expenses.
So when summer temperatures
reach extremes, a slight, automatic
increase in the temperature setpoint
for office areas will seem perfectly
ac ceptable to mos t bui lding
occupants. This reduces electrical
demand. And, with access to the
right historical data and intelligent,
integrated systems in place it’s
easy to calculate the resultant
energy savings and carbon footprint
impact.
U s e f u l i n f o r m a t i o n f o r
benchmarking or forecasting also can
be extracted from trade associations
or other like-minded organizations.
Intelligent systems can be trained to
seek these out as part of their daily
routines or when in troubleshooting
mode.
Proceed with caution
The delivery of the current state
of the art is not for the casual
contractor. It requires people with
the unique skill set to blend control
with communications and systems
integration. Firms that specialize
strictly in information technology,
controls or integration most likely
will not be capable of delivering a
truly smart building. And for the next
generation of building systems,
facility professionals will require
access to even more information to
take full advantage of tomorrow’s
intelligent systems. Smart buildings
will surely become a lot smarter in the
future. Skills and training must keep
pace with technology breakthroughs.
Smart buildings will surely become
a lot smarter in the future. Skills
and training must keep pace with
technology breakthroughs.
Future looks bright
The future looks br ight for
organizations that put smart
buildings to work in the pursuit of
greener facilities. Bright green, as a
matter of fact. The following excerpt
is from ‘Bright Green Buildings:
Convergence of Green and Intelligent
Buildings,’ a report published in
2008 by the Continental Automated
Buildings Association (Caba) and
Frost Sullivan.
The report emphasizes the many
benefits to owners who go beyond
merely greening their facilities. A
bright green building is one that is
both intelligent and green. It is a
building that uses both technology
and process to create a facility that
is safe, healthy and comfortable, and
enables productivity and wellbeing
for its occupants.
wireless communications must now
be considered as well.
Communication highway
Most recently, the IT infrastructure
has p r o v i d e d t h e p r e f e r r e d
communicat ions highway for
various building systems. In this
environment, a temperature control
system rides on the same flexible,
secure communications network
as the payroll system, the network
servers and much more outside of
the facility director’s traditional realm
of responsibility.
The IT operations staff monitors
the traffic to make sure every
application is running smoothly at
the enterprise level. This frees up
the facility operations staff to better
focus on the performance of systems
that provide occupant comfort,
security, life safety and other similar
concerns. All of these developments
have been leading up to the point
where disparate building systems
are beginning to add real-time
information to all points along the IT
highway, in a universal language.
More importantly, the information
about building performance is being
translated into management-friendly
displays so that changes can be
Translat ion sof tware cal led
‘middleware’ gathers data from all
automated systems throughout
an enterpr ise – regardless of
manufacturer or communications
protocol – and merges it into a
common platform for analytics and
reporting. One result is a web-based
dashboard display that offers a
visual snapshot of which facilities
are experiencing high energy usage,
abnormal maintenance costs, and
many other situations that deserve
prompt attention.
E x e c u t i v e s i n c h a r g e o f
sustainability and carbon footprint
management are now able to see
the big picture of their organization,
no matter how many buildings or
geographic locations are involved.
When information is available quickly
and can be accessed anywhere,
managers are able to make better
decisions that have an immediate
impact on profitability.
Chiller plant automation
Modern chillers are complex
mechanical devices that can be
extremely costly, depending on
their size. They have long had the
ability to communicate with the
building management system, but
these reduce energy consumption
and greenhouse gas emissions when
applied intelligently.
Depending on the level of the
intelligence, there can be additional
benefits. Intelligent chiller plant
optimization automatically prevents
operating conditions that could
age equipment prematurely or
compromise reliability by comparing
intended loading with manufacturer
recommendations.
In addition, with detailed logging
and trending, data can be instantly
accessed that will assist in diagnosing
and fixing problems quickly. Correctly
applied chiller plant optimization
reduces operating costs in both
existing and new chiller plants.
In an existing, constant-speed
plant, it has been shown to lower
energy consumption by about 10
per cent. However, in a new plant
with variable-speed drives and the
proper piping configuration, energy
savings might approach 40 per
cent as compared to older, non-automated
plants.
Connecting to smart grids
Truly smart buildings will leverage
knowledge that resides outside its
walls and windows. The smart grid is (Contd. on pg 11)

EQUIPMENT August 25-31, 2014 9
Indian CE industry to constitute
10 pc of global market
which will boost urbanization in India,
as the government has granted new
infrastructure projects and is allowing
huge investments in the infrastructure
industry.
“Burgeoning real estate industry,
increasing coal production and
mechanization of mining operations,
will aid the growth in the country’s
equipment industry. India is expected
to see more competition among
existing players in this segment with
an aggressive growth strategy,” he
said.
The residential construction industry
is expected to grow from CAGR of 10.8
per cent between 2006-11 to 15.3 per
cent by 2017, the report said.
According to the survey, developing
and developed world would grow
64 per cent and 86 per cent,
respectively by 2050, and growth will
be concentrated in India and Africa
due to large percentage of youth.
Aulbur further said that if India has
to successfully constitute 10 per cent
of the global market, the construction
equipment players need to take key
strategic actions.
“They will have to design and
build equipment suitable to the Indian
market. They should also look at a
distinctive export business approach,”
he said.
On the policy front, the report said
there is a need for focused systemic
changes towards credit enhancement,
banking and regulatory interventions.
The report further said that since
the construction equipment capacity
On account of investments in
the infrastructure sector, the Indian
construction equipment industry is
likely to grow at 12 per cent, increasing
India’s global share to 10 per cent by
2017, says a survey.
As per a repor t by Roland
Berger Strategy Consultants, India’s
construction equipment market,
though small by global standards, is
extremely competitive and has players
operating under different strategies.
“The market is expected to grow at
12 per cent CAGR to $4 billion by 2017,
which will be driven by infrastructure
investment of $1 trillion during the
12th Five-Year Plan,” said company’s
Managing Partner Wilfried Aulbur.
Post-2014 general elections, there
is an expected economic resurgence
India’s first Potain MCi 48 C
delivered to Divakar
India’s first Potain MCi 48 C
has been set to work on a hospital
building in the heart of Mangalore.
The 2.5-ton tower crane, which is
aimed at mid-level construction
projects, was purchased by Divakar
Construction Builders.
And the unit has made a solid first
impression; its new owners now plan
to buy a Potain MCi 85 A, a model
that the contractor has previously
rented.
“The crane we rented was the
perfect example of what Potain
cranes are about; high-quality design,
maximum jobsite efficiency, and
unbeatable return on investment,”
commented Divakar, the crane’s
owner.
“The next logical step after renting
was to buy one of our own. As one
of the top civil contractors in this
region, it is important that we use
industry-leading equipment that can
perform on a huge variety of job sites.
I am delighted that we are the first to
welcome this innovative new crane to
India,” he added.
The Potain MCi 48 C is currently
building a convention centre at the
Mangalore hospital. The tower crane
is being used to place a combination
of steel, cement, rock, and concrete
at the site.
Divakar intends to use the same
unit to build residential apartments,
commercial buildings, educational
institutes, and other hospitals,
soon after its current job has been
completed. With a new national
government in place, the contractor
is in no doubt that his Potain lifter
will be kept busy for the foreseeable
future.
“We’re confident that this political
change will have a positive impact on
the market,” said Divakar.
“With a new government in place,
far exceeds current and near- term
domestic demand, increasing share of
exports is a potential option to improve
utilization but would require focused
effort by OEMs (original equipment
manufacturers) for sales channel
development and is not something
that can be achieved quickly.
BEML rolls out new
excavator
Zoomlion to bid for a
60 pc stake in Chery
we’re hoping that regeneration and
development of urban areas will
mean more building projects for
companies like us,” he said. Zoomlion has announced that
it has made a $340 million offer to
acquire a 60 per cent stake in Chery.
The Chinese construction equipment
manufacturer is looking to profit from
Beijing’s drive to promote large-scale
rural modernisation.
The attempted acquisition forms
part of Zoomlion’s strategy to “become
a leading agricultural machinery
enterprise in China”.
The Changsha-based manufacturer
is seeking to acquire 1.8 billion shares
in Chery Holding, one of China’s
leading agricultural machinery
producers. Last year, Chery’s turnover
was “one of the highest among the
agricultural machinery enterprises
in China”, according to a statement
from Zoomlion. A top company official
said they are open to acquisition
opportunities in March of this year. The
successful acquisition of Chery would
help Zoomlion to compete with other
international agricultural machinery
manufacturers also making moves in
China, such as John Deere and CNH
Industrial.
Caterpillar launches rental-oriented
telehandlers
Caterpillar has unveiled a pair of
telehandlers designed to meet the
needs of rental-fleet operators. The
TH414C GC and the TH417C GC
models deliver low-cost operation,
reliability, and ease of use, according
to Caterpillar.
With their heavy-duty booms and
frames, the robust units have been
built to offer hire firms safe returns
on their investments. The TH414
GC boasts three boom sections, a
rated load capacity of 3,600 kg and
a maximum lift height of 13.85m.
The TH417C GC, which is the
larger of the two machines, sports
four boom sections and offers a
rated load capacity of 4,000 kg and
a maximum lift height of 17m. The GC
telehandlers use four-cylinder, 74kW
3.6-litre engines and 3F/3R power-shift
transmissions. Both models
feature permanent four-wheel drive
and use limited-slip differentials
in their front axles for enhanced
traction.
For added versatility, the machines
are equipped with Caterpillar’s
standard Integrated Tool Carrier quick
coupler, which is compatible with
other telehandler models produced
by the manufacturer. The system
can accommodate standard and
side-shift carriages, general-purpose
and light-material buckets, 4m truss
booms, and lifting hooks.
Moreover, the heavy-duty booms
of the models feature external-cylinder
designs and chain drive
systems to deliver speed, impressive
load capacity at full reach, and ease
of maintenance.
The machines’ daily maintenance
points have also been situated with
rental companies in mind; all of these
points, including drain ports and filters,
are accessible from ground level.
Caterpillar is confident that by
keeping costs low, reliability high, and
operation simple, the TH414C GC
and TH417C GC models are likely to
appeal to rental companies across the
Europe, the Middle East, and Africa
(EMEA) region.
The public sector undertaking
BEML has launched an excavator
BE220G. The new excavator is fitted
with ergonomically designed cabin
for operator comfort and all-round
visibility.
The console is provided with LCD
display which constantly monitors all
the vital parameters.
The operating weight of the
excavator is 22,800 kg, powered
by 4-stroke, turbo charged, direct
injection engine with gross power of
110 KW at 2100 rpm.

August 25-31, 2014 10
real estate
Housing for all: India
needs $2 trillion
Investments to the tune of more
than $2 trillion would be required by
2022 to create a stock of over 110
million housing units and achieve
the target of ‘housing for all’, said an
industry official.
“There is already a huge shortage
of housing and if we have to achieve
Prime Minister Narendra Modi’s
vision of housing for all by 2022, we
Real estate mogul Donald Trump
is likely to invest in a yet-to be
announced Trump Towers project
which is currently being developed
by Panchshil Realty in Pune. Trump,
Chairman President, the Trump
Organization, was in Pune to unveil
the Trump Towers show suite.
The project which was announced
by Panchshil Realty in 2012 is likely
Mumbai, Pune property
prices leave Delhi behind
Delhi and Mumbai, two of the
biggest residential property markets
in the country, have shown divergent
trends in price appreciation in the
past two years. While Delhi recorded
the least price rise at 4.4 per cent,
Mumbai showed highest appreciation
at 25.27 per cent between June 2012
and May 2014.
The prices in Pune grew 21.9 per
cent, in Bengaluru 19.47 per cent,
Kolkata 17 per cent, Hyderabad 16.8
per cent and Chennai 13.2 per cent
during the same period, according to
data by real estate firm research firm
Prop Equity.
In the same period, the inventory
levels have been rising. The Mumbai
Metropolitan Region has an inventory
of 53 months at the end of June this
year, while the National Capital Region
has an inventory of 45 months, the
data by research firm Liases Foras.
Buyers were in a wait-and-watch
mode. “The demand is there, but
people have been delaying their
purchasing decisions due to various
factors which lead to such a huge
inventory pile up,” said Harinder Singh,
MD, Realistic Realtors.
Due to developers’ focus on
clearing the existing backlog, the
number of new launches has also
come down drastically in the range of
47-92 per cent across all seven major
cities at the end of May this year,
Runwal offers `1,000 cr to
Crompton land in Mumbai
Runwal Group has offered to pay
in the next two-three months,” said
one of two people who confirmed the
development.
Crompton is selling part of its total
34-acre land parcel at the city’s Kanjur
Marg suburb while retaining around nine
acres on which its factory is situated.
Crompton Greaves Rs 1,000 crore
for 25 acres in Mumbai, making it
the highest bidder ahead of Lodha
Developers and Kalpataru. “The due
diligence is going on right now and
the deal is expected to be concluded
Infra status for housing
sector sought
The chronic housing shortage in
India requires reforms in the banking
sector and investment policies to
achieve the government’s vision of
‘housing for all’ by 2022.
“Currently, bank’s exposure to the
realty sector is only 5 per cent and
is way too small,” said Sunil Mantri,
President, the National Real Estate
Development Council (Naredco),
adding that internationally, it was
between 20 per cent and 25 per
cent.
He said the sector had been facing
a liquidity crunch and investment
in the housing sector would have
positive impact on the entire economy.
Naredco has put forward an agenda
that it expects will help developers
raise investments as also promote
low-cost housing.
“Firstly, an infrastructure status
must be granted to the sector and
compared to June 2012, according to
Prop Equity data.
Experts say the slowdown has
impacted the investor’s market of
Delhi-NCR the most. Many non-resident
Indians had stopped buying
and there was hardly any activity in the
past couple of years, leading to such
minimal appreciation in prices.
The realty market is seeing declining
sales coupled with higher inventory
for the past two years. Moreover,
developers are hard-pressed on funds
with not many lenders willing to lend
money to the ailing sector.
Earlier, the political uncertainty
had impacted buyers’ and investors’
confidence. It was expected that the
demand would return in the sector
once sentiments improved. However,
now it seems it will require much more
than sentiment for a full revival in the
sector. With a new government in
place, experts are expecting the realty
sector to bounce back soon.
The markets have already started
showing signs of an improvement.
“The activity and interest level have
gone up since the formation of a new
government. We are seeing increased
property inspection visits as well as
increased footfalls in developer’s
offices of potential buyers/sellers.”
said Ashutosh Limaye, Head (research
real estate intelligence service) at
Jones Lang LaSalle India.
the interest rate on retail loans should
be brought down to 7 per cent.
Besides, loans should be provided
for acquiring land when it is used for
affordable housing under the Reserve
Bank of India (RBI) guidelines for
prioritization of home loans. Also,
external commercial borrowings (ECB)
should be allowed for the housing
sector,” said Mantri.
On foreign direct investment (FDI)
in the sector, Mantri said that between
2008 and 2014, around $953 billion was
invested in the real estate sector. Of
this, household (personal savings and
other borrowings) have contributed 72
per cent, institutional lending, including
home loans (by banks and housing
finance companies), accounted for
18 per cent followed by government,
equity raising (private equity and
capital markets) and private sector
contributing 3 per cent each.
will need an investment of at least $2
trillion to create more than 110 million
units,” said National Real Estate
Development Council (Naredco)
President Sunil Mantri.
Investment in the sector needs
to grow by around 20 per cent to
achieve the target, he said. India
has an urban housing shortage of
about 18.7 million units, with 95 per
cent of this shortfall in the low- cost
housing segment, and 43.7 million
in the rural belt.
“Apart from creating houses, there
is also a need to develop supporting
infrastructure and commercial real
estate to achieve sustainable growth.
For this, we will need additional
investments of $1.5 trillion,” he
said.
Trump may make equity investment
in second Trump Towers in Pune
to be completed over the next 8-10
months. Atul Chordia, Chairman,
Panchshil Realty, said that given the
response to the first Trump Towers,
they were working on a second
project.
“This is currently at the drawing
board stage and would be announced
sometime next year,” he said, adding
that it would be located somewhere
along the river in Pune.
Trump said, “We are a very liquid
company and I would expect to invest
in this new project. We have a great
relationship with the Chordia family
and would want to work together on
other things.”
The new project is expected
to be significantly larger than the
current one and likely to fit the size
requirement needed to allow FDI.
The current project is about 85 per
cent complete, and the company
has sold 70 per cent of the inventory
in the first tower.
Once completed, i t would
comprise 46 apartments of 6,000 sq
ft each, spread over two buildings,
with one apartment per floor. If the
second project goes through, it would
be the second project that the Trump
Organization would be doing with
Panchshil Realty in Pune and their
third in India.
ASK Group to invest `55 cr
in Pune project
ASK P r o p e r t y I n v e s t m e n t
Advisors, the real estate private
equity arm of the ASK Group, has
decided to invest Rs 55 crore in a
new township project of Paranjape
Schemes in Bhugaon, Pune.
This is the eighth investment from
the group’s second domestic fund,
which was set up in 2012 with a
corpus of Rs 1,000 crore. The project
is spread over 150 acres and will
include apartment blocks.
ASK Property Investment Advisors
had earlier invested Rs 40 crore in
Paranjape Scheme’s Model Colony
project, Skyone, in 2012. Sunil
Rohokale, CEO, ASK Group, said,
“We are expecting an incremental
rate of return (IRR) of 25 per cent
over a five-to-six-year period at
the fund level. “Of the Rs 1,000
crore fund, 80 per cent of the fund
has been drawn down. We are in
negotiations with the developers for
the remaining amount and in the next
three months, the entire fund should
be drawn down.”
In private equity deals, the money
committed by limited partners to a
private equity fund is usually not
invested immediately. It is ‘drawn
down’ and invested over time as
investments are identified. “Our
strategy of focusing on the top five
cities and working in partnership
with reputed developers for multiple
opportunities for our various funds
will continue,” he added.
The ASK Group currently manages
real estate assets of more than Rs
2,100 crore. The group has raised
two domestic funds and an offshore
fund amounting to approximately
Rs 1,600 crore and structured debt
of close to Rs 500 crore. It recently
announced an investment of Rs 127
crore in a residential housing project
of the ATS Group in Noida, NCR,
from its offshore fund.
It has also made two exits: first
in ATS -- One Hamlet in Noida, at
an IRR of 54 per cent and a multiple
of 2.45 over two years, and from
Liviano, a project by Darode Jog
Properties in Pune, at an IRR of 30
per cent and a multiple of 2.35 in
three years. Both these exits are from
the first domestic fund launched by
the ASK Group in 2009.

Cir 34 final 2014

Recommended

Recommended

More Related Content

What's hot

What's hot (17)

Viewers also liked

Viewers also liked (17)

Similar to Cir 34 final 2014

Similar to Cir 34 final 2014 (20)

More from Remona Divekar

More from Remona Divekar (10)

Recently uploaded

Recently uploaded (20)

Cir 34 final 2014