Cir 37 2014

September 15-21, 2014 1
An MMR, Braj Binani Group Publication Volume 3 l Issue No 37 l September 15-21, 2014 l Price: Rs 100
Verdict on easing rules for foreign
funds in construction expected
and coaches manufacturing and
maintenance facilities.
The new rules in both sectors have
been notified. The BJP government,
however, is hesitant to allow FDI in
multi-brand retail as it believes that it
could harm small retailers.
Ministries can now clear
projects up to `1,000 cr
Housing Ministry to boost Green low-cost housing
Modi govt to grant roads
under EPC, not BoT
The Centre has decided to switch
to the conventional engineering,
procurement and construction (EPC)
model to award contracts in the
case of eight projects totalling Rs
4,000 crore, which were earlier to be
constructed under the build, operate
and transfer route (BoT).
The projects are a mix between
ones that did not elicit any bids from
private parties as their cost was too
high and thus seen as unviable and
a few that were terminated by the
government due to lack of interest
shown by the developers concerned.
Although the National Highways
Authority of India (NHAI) has officially
adopted the stance of late that more
projects would be awarded through
the EPC mode largely due to investor
apathy, these eight projects would
be the first where the mode would be
switched after the Cabinet recently
allowed the Road Ministry to change
the mode without its approval. The
NHAI just needs the approval of
a committee under the Cabinet
secretary.
Under an EPC contract, the
government funds the construction
and the road developer only has to
develop the project in a stipulated
period of time. In the BoT mode, the
developer invests in the project and
recoups it either through tolling rights
or annuity. The EPC mode takes three
to four months for a project to be
awarded, while BoT contracts take
18-20 months, which the NHAI thinks
is another major advantage.
Projects of 3,055 km were awarded
through the EPC mode in 2005-06,
but it rapidly lost its sheen. The
following year, only 345 km were
awarded, slipping to 89 km a year
later, around when BoT projects were
on the ascendant, peaking at 6,491
km in 2011-12. Not even a single EPC
project was awarded in the sector
between 2008-09 and 2011-12.
However, in recent times EPC
has once again made a comeback
because of lukewarm response shown
by private developers. For instance,
this fiscal so far the NHAI has awarded
seven projects of 798 km, all under
the EPC contract. In the past two
years, of the 13 projects for 1,115 km
for which bids were invited, a larger
share of 841 km was awarded under
the EPC route.
Additionally, 11 proposals are
currently being evaluated by the inter-ministerial
public-private partnership
(PPP) appraisal panel involving
construction of 1,098 km highways,
of which 1,010 km will be awarded
under the EPC mode.
The Centre last month authorized
ministries and departments to clear
investment proposals up to Rs 1,000
crore, instead of seeking approval of
the Cabinet Committee on Economic
Affairs. The earlier limit was Rs 300
crore.
The change came after Road
Transport & Highways Minister Nitin
Gadkari pushed for it. “This will avoid
many layers of approval and work can
be awarded in a fast-track manner,”
said an official.
Rajiv Kumar, a senior fellow with
the Centre for Policy Research, said
the move was long overdue. “This will
reduce paperwork and logjams over
clearing of projects,” he said. However,
he wondered how many projects up
The Union Ministry of Housing &
Urban Poverty Alleviation plans to
work closely with all the stakeholders
in promoting Green affordable
housing and with state governments
to map the needs and requirements
for af fordable housing. I t has
proposed to make low-cost housing
an integral part of smart cities.
Spe a k i ng a t t h e CI I - IGBC
Green Building Congress 2014
in Hyderabad, Anita Agnihotri,
Secretary, Housing Ministry, said
that with increased urbanization,
there is a growing need to develop
to Rs 1,000 crore are there with the
government or public sector units.
Abhijit Banerjee, Director-General
of the Confederation of Indian Industry
said it would help in clearing projects.
“Overall, this is a good move to further
boost investor sentiment,” he said.
In the last week of August, the
CCEA also empowered Gadkari’s
ministry to amend the model
concession agreement for highways
when required and to decide the mode
of delivery for projects. This means the
ministry can on its own decide on key
issues related to national highways.
Earlier, an inter-ministerial group
used to take these decisions. If the
proposal got stuck there, it would go
to the Cabinet.
and promote housing structures
which are not only affordable but also
sustainable and scalable.
She said the housing sector has a
multiplier effect in terms of providing
employment and security. To make
this happen, it is imperative to work
closely with all the stakeholders.
The ministry would be pleased
to work with the IGBC and other
stakeholders.
Prem C Jain, Chairman, the IGBC,
said India, at over 2.2 billion sq ft, is
the second country in the world with
the largest Green building footprint.
A target of laying 8,500 km roads
has been fixed for 2014-15. In the
Union Budget, Finance Minister Arun
Jaitley has allocated Rs 37,880 crore
for roads. Meanwhile, the government
has also allowed NTPC, the Maharatna
public sector power producer, to
decide on projects up to Rs 1,500
crore from the current ceiling of Rs
1,000 crore.
In a recent study, the CII pegged
the requirement for investment at Rs
280 lakh crore ($4.7 trillion) for five
years, beginning 2014-15, to make
the economy grow by 7 per cent a
year on an average. The requirement
is double the Rs 139 lakh crore ($2.9
trillion) of investments in the previous
five years. The economy grew 6.7
per cent a year on an average in the
previous five years.
The CII expects infrastructure
investment to go up from around Rs 24
lakh crore ($500 billion) in the 11th Plan
period to Rs 64.3 lakh crore ($1,071
billion) during 2014-15 and 2018-19.
Var ious types of bui ldings,
including schools are going the
Green way. The IGBC aspires that
by the year 2032, every Indian should
find shelter in a Green home, where
there is increased quality of life, he
said.
C Shekar Reddy, Nat ional
President, Credai, highlighted the
need to do away with NOCs and
implement online registrations of
building permissions. This will make
the process transparent, simpler and
facilitate rapid spread of the housing
sector.
The Government is trying to fast-track
a decision on easing rules for
foreign investments in the construction
development sector. The Department
of Industrial Policy & Promotion (Dipp)
has floated a Cabinet note proposing to
bring down the minimum built-up area
requirement for FDI in construction
projects from 50,000 sq metres to
20,000 sq metres.
The existing policy allows 100
per cent FDI in the construction
sector, subject to minimum built-up
area and minimum capitalisation
requirements.
It has also proposed reducing
the minimum capital requirement for
such projects from $10 million to $5
million.
The draft Cabinet note also
suggested that projects which commit
at least 30 per cent of the total project
cost for low-cost housing will be
exempted from minimum built-up area
and capitalization requirements.
A Dipp official said,“As these
proposals are in line with the
announcements made in the Union
Budget, we do not expect major
opposition from other ministries and
departments. We hope to finalize our
note for Cabinet’s approval soon.”
With the Government eager to
attract investments in the 100 smart
cities proposed in the Budget, easing
rules for FDI in construction is very
important. “Countries such as the
US, Japan and UK have all expressed
interest in investing in smart cities.
The more liberal norms will ease the
flow of such investments,” added the
official.
The existing post-completion lock-in
period of three years for investors,
however, will not be relaxed to avoid
early exits. The Union Cabinet recently
relaxed FDI rules for the defence
sector, increasing the FDI cap from 26
per cent to 49 per cent.
It also allowed 100 per cent foreign
investments through the automatic
route in a number of areas in the
railways including high-speed trains,
railway line, passenger terminals

ARCHITECTURE September 15-21, 2014 3
Benchmark for Green
buildings
The new versatile
Conservatory of Music
building in New York
City by Deborah Berke
Partners follows Bard’s
environmental best-practice
standards
that can also be used for audio and
video recording. The project uses
geothermal wells and heat pumps
and follows Bard’s environmental
best-practice standards.
The studios are generousl y
proportioned for a conservatory
and programme of this size in order
to accommodate small ensembles
and individual musicians. Each room
has exceptional acoustics so that
any space can serve as a teaching,
rehearsal, or performance space.
While the flexible teaching studios
play an integral role in the story of
the Conservatory, the Performance
Hall is the core of the building. The
double-height space is acoustically-tuned
for unamplified music, which
allows for a variety of uses including
small operettas, dance, and multi-media
projection.
The Laszlo Z Bitó ’60 Conservatory
is a new building for Bard College’s
Conservatory of Music. At once a
teaching facility and a first-rate venue
for the performance of music, the
Conservatory alternates effortlessly
between these two modes.
The 16,000 sq ft building contains
rehearsal studios, teaching spaces,
a student lounge, and a performance
hall. The performance space of
The Bard Conservatory building
is exceptionally versatile in order to
adapt to the alternating purposes
of teaching and performance. This
balance conveys the stability and
constancy of the enduring institution
and is communicated through the
building’s exterior material palette.
Smooth white stucco covers the
slightly arching primary form while
dark masonry boldly accentuates
essential elements such as the
Performance Hall.
The clarity of the white mass
interacts with the texture of the
richly-glazed brick to underscore the
balance of the Conservatory as an
environment dedicated to creative
musical expression and a lasting
institution grounded in history and a
tradition of excellence.
In addition to the performance
Green buildings for Vijayawada
proposed by Singapore builders
Wi t h t h e Andh r a Pr ade s h
governmen t announ c i n g i t s
capital city, all eyes are now on
the Vijayawada, Guntur, Tenali
and Mangalagiri (VGTM) region.
Singapore builders are thronging the
area to forge tie-ups with local firms
to erect pre-cast green buildings for
fast-paced development. Some firms
have given presentations to a select
group of builders.
“Pre-cast construction is in vogue
in Singapore as the process ensures
high level of quality. Our country has
a road map to make 80 per cent
green buildings by 2030,” said ACS
Jayapaul, Head, South Asia Desk,
International Markets Department,
Building and Construction Authority
(BCA). To supplement growth,
a couple of other firms evinced
interest in establishing testing labs
for construction industry.
As per a ballpark estimate of
market sources, the region along
with several other parts of the
state is expected to attract over Rs
10,000 crore investment, and major
construction firms across the globe
are on preliminary rounds to chalk
out their plans. “The government
is already on the job to make a
comprehensive plan for construction
of the capital. Once the plan is out,
the construction activity is likely to
pick up pace. Unlike in the past, the
technological advancement would
make buildings within no time,”
said Greater Vijayawada Builders
Association founder Gadde Rajaling
who took part in the meeting.
The Andhra Pradesh government
is understood to have commissioned
a detailed study on capital city by US
consultant McKinsey and the firm is
expected to come up with its report
shortly.
Local builders too are actively
looking at signing MoUs with global
construction players to take part
in major government and private
construction initiatives.
While stating that there are ample
opportunities for Singapore builders,
TDP Member of Parliament from
Vijayawada Kesineni Nani opined that
most of the residents come under
middle class bracket and builders
should keep the cost in mind while
going in for green buildings.
“There are rich people here. But
the city has over 12 lakh population
and a third of them live in slums.
Sanitation is another major problem
that needs to be focused,” said
Nani.
László Z Bitó ’60 Conservatory
Building is a 145-seat hall which can
be configured in a variety of ways,
and allow students to reimagine the
traditional concert space.
Geothermal wells
It also features one-touch audio
and video recording, as well as live-streaming
capability. The building
contains 15 teaching studios and a
lounge, along with a large classroom
Durable natural materials
Reflecting this functional flexibility,
seating arrangement is variable
and can accommodate as many as
150 patrons and as few as 25. The
materials used – wood paneling,
richly textured fabric, bold colour
-- evoke warm, inviting tones of a
classic performance space while
reinforcing the project’s modern
design sensibility.
hal l , the bui lding boasts two
percussion studios, showcasing
Bard’s commitment to allowing all
classical performers access to the
Conservatory programme. The
materials are durable and renewable
and are appropriate for the space as
it is used for a variety of gatherings.
Landscape and natural light
The design and placement of
windows played an important role in
the building design and as a result,
natural light fills all of the studio and
rehearsal spaces. The strategically
placed windows also allow the
landscape to play a major role in
creating beautiful and inspiring
spaces. Careful positioning and siting
of the building allows for studios to
have views of the surrounding woods
and the Hudson River beyond.
Even inst rument storage i s
carefully integrated into generously
scaled corridors. The unusual width
of the storage locker-lined corridors
not only allows for large instruments
to move easily in and out of the space,
but it also encourages informal
interaction and gathering.
The building, which is exceptionally
flexible, nonetheless conveys the
stability and constancy of the enduring
institution. Deborah Berke Partners’
design achieves this balance in
programme and communicates it on
the building’s exterior by juxtaposing
two materials.
Smooth white stucco covers the
slightly arching primary form while
dark masonry boldly accentuates
strategic volumes. The clarity of
the white mass interacts with the
texture of the richly glazed volumes
to underscore the balance of the
Conservatory as an environment
open to the evolution of musical
expression and a lasting institution
with a rich history and tradition of
excellence.
Bard Conservatory
Deborah Berke

INFRASTRUCTURE September 15-21, 2014 4
PM to review status of
infra projects
Prime Minister Narendra Modi is
set to hold his first review meeting of
infrastructure projects with secretaries
of key ministries in this segment. On
July 26, the Planning Commission
Secretary Sindhushree Khullar had
coordinated a meeting of secretaries
in the ministries of railways, road
transport and highways, civil aviation,
power, coal, renewable energy, ports
shipping, telecommunications and
petroleum natural gas. The meeting,
attended by the PM, was aimed at
outlining India’s infrastructure targets
and achievements.
Modi had said the progress of all
identified projects would be reviewed
every month. The Cabinet Secretary
would then work towards developing
a mechanism to address possible
hurdles to infrastructure development
across key sectors in this segment.
The Ministry of Civil Aviation, which
had a target to start developing five no-frills
airports and award management
contracts for four airports to private
operators, will outline the progress
on these fronts.
Through the past month, the
ministry has identified locations for
the first five no-frills airports— Tezu
(Arunachal Pradesh), Kishangarh
(Rajasthan), Jharsuguda (Odisha),
Hubli and Belgaum (Karnataka).
Aviation Minister Ashok Gajapathi
Raju Pusapati said, “The Airports
Authority of India (AAI) has developed
a no-frills model airport which will
provide essential services needed
to operationalize airports, without
compromising safety and security
in any way. This will result in low
operation costs and make it viable for
airlines to run their services.”
The ministry has also determined
the broad contours of the model
concession agreement (MCA) for
awarding management contracts
at six airports --- Chennai, Kolkata,
Lucknow, Guwahati, Ahmedabad
and Jaipur.
A senior ministry official said, “For
airport privatization, we have been
able to resolve most differences
regarding the MCA with the Planning
Commission. A meeting of the inter-ministerial
group will take place when
decided by the new secretary.” It is
planned of the six identified airports,
at least four will be awarded this
financial year.
Odisha to get $100 m ADB
loan for infra projects
The Odisha Urban Infrastructure
Development Fund, set up by the state
government to carry out infrastructure
projects in municipalities, will get a line
of credit of nearly $100 million from the
Asian Development Bank (ADB).
The Odisha Fund is awaiting
approval from the chief minister’s office
to avail loan facility, said government
officials. “The finance department
has already approved the borrowing
proposal from ADB. We hope to get
confirmation from the chief minister’s
office by the end of this month to avail
Surat-Mumbai travel
58 minutes by bullet train
A Japanese government institution
recently visited Ahmedabad, and
indicated that HSR will be a separate
dedicated corridor and that Surat
would have a new integrated railway
station complex that would be
managed on a commercial basis.
Once the HSR is built in the next
seven years, it would be possible for
a bullet train to cover the distance
between Mumbai and Ahmedabad
in 58 minutes flat. The HSR or
bullet train project started in 2009.
However, not much work was done
in the past five years. The project has
gathered speed after the recent visit
of PM Modi to Japan.
Municipal commissioner Milind
the line of credit,” said S K Ratho,
special secretary with the housing
urban development department.
The Fund was set up as a trust in
2012, as a fund to utilize money in
creating infrastructure for water supply,
sewerage, solid waste management,
drainage and slum development
projects undertaken by urban local
bodies (ULB), statutory bodies, and
public sector undertakings and to
attract investments, professional
advice from institutions for financing
such projects.
Torwane met the two-member Jica
team comprising Shingi Kakinaka
and Gaurav Kohli. Torwane said,
“The traditional rail route has many
bends. In contrast, the new high
speed rail corridor would be a
straight line with tunnels at several
places along the route.”
The Jica in its project outline
paper of September 2014 says that
it would take exactly 58 minutes
to cover a distance of 266.3 km
between Mumbai to Surat. The
distance of 500.6 km between
Mumbai and Ahmedabad would be
covered in 1.59 hour and 398.3km
between Mumbai and Vadodara in
1.32 hour.
IRB Infrastructure eyes 300 km
NHAI road contracts
Govt open to talks
on ‘100 smart cities’
via portal
The Ministry of Urban Development
will invite discussions from all
stakeholders, including the general
public, through a web portal for its
ambitious ‘100 smart cities’ initiative.
A web portal www.smartindia.gov.in
will be up and running soon and will
be open for intense discussion from
everybody, said a senior official in the
ministry.
It is only after proper dialogue
through public participation in policy-building
that the ministry will be able to
formulate guidelines for smart cities,
added the official. Many countries
such as Japan, Singapore, France,
among others, have expressed interest
in helping India build smart cities.
In the recent Budget, Finance
Minister Arun Jaitley allocated Rs
7,060 crore for smart cities project
over the fiscal. Navin Raheja, CMD,
Raheja Developers, and Chairman
of Naredco, said, “The government
must ensure decentralization of
power to reach local level, apart from
focusing on accountability for results
and timelines. It is important that each
smart city has its own economic hub
for job creation.”
Centre may cancel Sezs of
Hindalco, Essar, Adani
Government is likely to cancel
the approvals granted by it to nine
companies including Hindalco
Industries, Essar and Adani for setting
up special economic zones as no
work has been done to execute the
projects.
The Development Commissioners
have recommended to the Board of
Approval to cancel these Sez projects.
The formal approval had been granted
to these projects by BoA. However,
since there is no significant progress
made by the developer/co-developer,
the concerned DC has proposed
for cancellation of formal approval
granted to the developer.
Hindalco Industries has proposed
to set up an aluminium product Sez
in Odisha. The developer did not
make any request for extension. Essar
Jamnagar Sez Ltd had proposed to set
up a multi- product zone in Gujarat.
The formal approval was expired in
August 2009.
The developer did not make
any request for extension, it said,
adding that the DC had taken up
the matter with the developer but no
communication has been received.
Similarly, Adani Townships Real
Estate Company Ltd had proposed
With nearly 3,500 km of road
projects likely to be bid out by the
National Highways Authority of India
(NHAI) this fiscal, toll road firm IRB
Infrastructure Developers said it
expects to bag at least 200-300 km
of contracts.
Nearly 8,500 km road projects are
likely to be opened for bidding this
fiscal, out of which 3,500 km will be
on build, operate and transfer basis
while the balance on EPC. “We are
qualified for bidding for such large
projects. We expect to bag at least
200-300 km projects from the 3,500
km road projects which will come up
for bidding this fiscal,” said Virendra
Mhaiskar, Chairman and Managing
Director.
The company has already bagged
two road projects of around 356
km, including 190 km and Rs 3,200
crore worth four-laning of Yedeshi-
Aurangabad section of NH-211 in
Maharashtra and Rs 2,300 crore worth
166 km stretch of Kaithal to Rajasthan
border in Haryana, in FY15.
“We already have in our portfolio
four-laning of Solapur to Yedeshi
section of NH-211. Therefore, with the
Yedeshi-Aurangabad section project,
IRB will now develop the entire road
length of 288 km from Aurangabad to
Solapur,” he said. IRB is prequalified
to bid for around Rs 33,000 crore
worth road projects, he said.
Meanwhile, the company also won
a Rs 1,687 crore project from the
Maharashtra State Road Development
Corporation (MSRDC) for operation
and maintenance of a stretch along
Mumbai-Pune NH 4.
an IT/ITeS zone in Gujarat. The other
developers whose Sezs may be
cancelled include Chennai Business
Park, the Integrated Warehousing
Kandla Project Development and
the Gujarat Industrial Development
Corporation.
As per the Sez rules, formal
approval is valid for a period of three
years by which time at least one unit
has to commence production and
the zone becomes operational from
the date of commencement of such
production.
Provision to this rule provides for
extension of this formal approval
by BoA, for which the developer
will submit his application to the
concerned DC, who shall, within 15
days forward it to the Board with his
recommendations.

September 15-21, 2014 5
Forward push for Delhi NCR Ghaziabad in
located in Gurgaon have reaped
better returns than those secured from
Noida property. However, Noida is not
lagging very far behind.
Various recent announcements
and infrastructure uplifts of the city
have made Noida’s real estate market
increasingly attractive. What favours
investors entering Noida is the lower
pricing factor, which now promises
better appreciation and returns on
investments.
Fast-paced infra
The realty market in Gurgaon has
now crystallized into one of the most
favourable for buyers in the premium
segment. But the other side of the
coin is that the high price points in
Gurgaon suggest that properties
there will no longer fetch high rates of
appreciation.
With the fast-paced development in
infrastructure in Noida and its vicinity,
real estate growth has really picked
up over the past few years. There
have been announcements for many
new such projects as well, which have
had a positive effect on the real estate
market.
The proposed extension of the
Dwarka-Noida City Centre to Pari
Chowk will give direct connectivity to
Delhi and other NCR areas, and the
project is expected to complete by
2021. The Noida Metro Rail Corporation
(NMRC) has got the required approvals
for the 29 kilometer-long Noida-
Greater Noida Metro link from the state
government, as well.
Simultaneously, the Greater Noida
Industrial Development Authority
(GNIDA) has plans to set up its
own power plant, which will provide
uninterrupted power supply to
the region. Noida is known for its
affordable housing projects as well
as numerous luxury projects which are
underway, as well as in the pipeline,
and in its adjoining areas. Renowned
developers like Supertech Ltd, 3C
Company, Prateek Group, Lotus
Greens and Wave Infratech have
launched super-luxury projects with
3-5 BHK apartments of 2,000-4,000
sq ft and priced in the range of Rs 1
crore to Rs 3 crore for area.
Primary draw
With good infrastructure, Metro
connectivity and good road network,
real estate development in the Noida
regions is picking up rapidly. This
is important, since infrastructure
development is the primary draw for
buyers and investors into this area.
Upcoming major projects like
the Export Promotion Zones and Taj
Economic Zone along the Yamuna
Expressway are likely to push the
economic development of this region,
consequently giving a further boost to
real estate development.
In fact, the positive response
from buyers and investors in Noida
has now made this the preferred
destination for launching new projects
and expediting existing ones. All in all,
Noida is beginning to emerge as one
of the brightest stars in Delhi NCR
real estate.
Santhosh
Kumar
CEO, Operations,
JLL India
November 25–28, Shanghai
SHANGHAI
NEW INTERNATIONAL
EXPO CENTRE
growth mode
Ghaziabad will continue to garner interest,
particularly for affordable housing projects
Ghaziabad caters primarily to
the mid-segment and affordable
housing segments. It is the home to
established housing clusters such as
Kaushambi, Vaishali and Indirapuram
while upcoming residential corridors
include Raj Nagar Extension and
developments along the NH-24
beyond Indirapuram, including the
Crossings Republic Township.
Whi le lack of land opt ions
has restricted new launches in
the Kaushambi , Vai shal i and
Indirapuram clusters, they being
already developed to a great extent
and with a large existing residential
population, these residential clusters
have also recorded healthy capital
appreciation.
Recent project launches have
been mostly in the upper-mid and
premium segments offering luxury
specifications and upgrades from the
usual, mid-segment housing options.
Prices in the Kaushambi and Vaishali
areas are in the range of Rs 5,500 –
6,500 per sq ft while in Indirapuram
prices are Rs 4,800-5,500 per sq ft
price range.
Maximum projects
The affordable residential clusters
are in the average price range of Rs
2,200-3,500 per sq ft. The upper
end of the range is commanded
by projects which are completed
or close to completion in Crossings
Republic, while the newer projects in
NH-24 are in the lower price band of
Rs 2,200-2,600 per sq ft.
The Raj Nagar extension corridor
on NH-58 is also priced at Rs
2,600-3,000 per sq ft range. All
these clusters have contributed the
maximum to new project launches
that have been recorded in the
Ghaziabad residential market over
the past few quarters.
While Raj Nagar Extension may
be seeing project launches by first-time
or lesser known developers,
the likes of Assotech, Ansal API,
Sare, Ashiyana Group and Wave
Group have come up with projects
on NH-24, which includes Crossings
Republic as well.
With prices in the Noida Extension
precinct in the Noida sub-market
expected to be higher, Ghaziabad
will continue to garner interest,
particularly for affordable projects
in Crossings Republic, Raj Nagar
Extension and on the NH-24.
Large population base
The Ghaziabad sub-market also
enjoys a large population base from
the industrial sector and SMEs,
and low-income workers looking to
upgrade to better accommodation. In
the near future, the better areas within
Ghaziabad, such as Indirapuram and
Vaishali, should continue to hold their
ground while the lower-income profile
areas of Sahibabad.
Rohan
Sharma
Associate Director,
Research Reis, JLL
India NCR Real Estate
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REAL ESTATE
Noida and Gurgaon,
with new infra projects
coming up, present new
opportunities for further
growth in real estate
There is increased buoyancy in
the market after the arrival of the new
government, especially after the budget
has set the ball rolling for the real
estate sector. With allocation of more
funds for affordable housing, easing
of FDI norms, implementation of Reits
and special focus on infrastructure
development, government has
made it clear that in order to push
economic growth, a special focus
on infrastructure and real estate
development is pivotal.
In the foreseeable future, the real
estate market in Delhi NCR is going to
see considerable forward momentum.
As land is a prerequisite for any kind
of development, Noida and Gurgaon
are logical answers to the burgeoning
need for housing in Delhi NCR.
Mature markets
In terms of inventory, Noida and
Gurgaon have more options than
any other city in the NCR. These two
areas are consequently expanding
and growing, and expansion opens
opportunities for further growth in real
estate.
It is for this reason that these two
cities have now got mature real estate
markets for different sets of buyers
and investors. However, they have
very individual returns potential. In
the past few years, it appears that
investments made into properties
baumaCH14_Besucher_260x180_E.indd 1 09.07.14 12:42

September 15-21, 2014 6
Centre clears Bengaluru-
Mysore 6-lane highway
The Centre has approved the
Karnataka government’s Rs 3,000-
crore proposal to conver t the
Bengaluru-Mysore road into a six-lane
national highway.
The Centre has also accorded
national highway (NH) status and has
numbered it ‘NH-275’. “The National
Highway Authority of India (NHAI) has
agreed to fund the entire project and
collect toll. The state’s role is only to co-ordinate
and facilitate land acquisition,”
HC Mahadevappa, Karnataka Minister
for Public Works,said.
“Of the Rs. 3,000 crore, Rs. 1100
crore is reserved for land acquisition,
Rs. 1,600 for construction and Rs. 300
crore for shifting utilities,” he added.
The 123-km six-lane highway
includes service roads. The project is
being taken up under the design, build,
finance, operate, transfer (DBFOT)
model and will take four years to
complete.
PROJECTS UPDATE
Dubai draws plan to build
world’s biggest airport
Paul Griffiths, chief executive of
state-backed airport operator Dubai
Airports, said he aims to have the first
phase of the expansion complete in
six to eight years. That part of the
project includes adding two new
runways and two large concourses
housing dozens of aircraft gates
each.
“It’s a very aggressive time scale
... but I think that we have a track
record of doing remarkable things
in a remarkably challenging time
frame,” said Griffiths in his office
at the city’s main airport, Dubai
International.
As later phases are completed, the
new airport will eventually boast five
parallel runways spaced far enough
apart so they can all be used at the
same time, and have enough gates
for hundreds of wide-body planes.
Dubai World Central opened for
cargo flights in 2010 with a single
runway in the desert south of central
Dubai. It received its first passengers
in October at a single terminal that
is mainly used by smaller airlines
and low-cost carriers. The currently
larger Dubai International ranked as
the world’s seventh busiest airport
last year, handling 66.4 million
passengers. It too is being expanded,
with a new concourse expected to
open next year.
Griffiths says Dubai needs to
expand to keep pace with the rapid
growth of airline traffic into the
Emirates. Much of the increase comes
from hometown airline Emirates, the
region’s largest carrier and the
world’s biggest user of
both the A380 and Boeing 777
long-haul jets. The expansion of the
new airport is unlikely to be ready
by the time the Expo kicks off, said
Griffiths.
IPA to advise Ennore Port
on dredging project
Kamarajar Port at Ennore has
appointed the Indian Ports Association
(IPA) as a consultant in its project to
deepen the port, including berths, to
an 18-metre draft so that it can handle
large ships.
“We could be first port to take
this step,” said MA Bhaskarachar,
Chairman Managing Director,
Kamarajar Port Ltd.
Deepening of the port is one of the
major initiatives the new government
Singapore to help AP in infra
development
The government of Singapore
will work with the Andhra Pradesh
government in inf rast ructure,
industrial and city development
efforts. A delegation led by former
Prime Minister of Singapore Goh
Chok Tong met Chief Minister N
Chandrababu Naidu last week and
offered his support, according to an
official press release.
The Chief Minister was stated to
have informed the delegation about
the plans of the state government for
transforming AP into a logistics and
manufacturing hub.
He also briefed about the state’s
plan for ports, airports, highways,
industrial nodes in Visakhapatnam-
Chennai and the Chennai-Bengaluru
industrial corridors and petrochemical
corridor besides development of
smart cities and promotion of tourism
in a big way.
The delegation offered to share
Singapore’s experience in the design
of the new capital city and assured
that it would encourage Singapore-based
companies to participate in
various port, airport, industrial and
tourism projects.
The Singapore delegation
suggested to the Chief Minister
that funds could be tapped from
the proposed Asian Infrastructure
Investment Bank (AIIB) to be set up
with China, Singapore and several
other countries including India, as
founder members.
Chinese cos to bid for
5 high-speed rail projects
Chinese firms are teaming with
Indian companies to jointly bid for five
high-speed railway projects in India in
an apparent attempt to compete with
Japan’s plans to build bullet trains.
The Indian government will soon
open the projects for public bidding
and Tata Projects, one of the fastest
growing infrastructure companies
in India, is in discussions with an
undisclosed Chinese company that
has put in place, he said. Based on
the IPA’s recommendation, the port
will call for ‘expressions of interest’
from companies for the dredging
project, he said.
The port’s two coal wharves can
accommodate Panamax size vessels
of 280 m length each at a depth of 15
m, alongside an approach channel
and port basin of 16 m and 15.5 m
respectively. This will be deepened to
18 m, he said.
owns the advanced technology
used in the bid, state-run China Daily
reported recently.
Industry insiders believe the
potential partner would be one of
China’s major rail companies, CSR
Corp or CNR Corp, though neither
company would confirm they were
part of the bid, the front page report
from Mumbai titled “Chinese firms
eye Indian rail projects” said.
China, Malaysia firms
to be tapped to save
highway projects
The project to dredge to 18 m
depth will cost around Rs 400 crore. It
will be completed in three years, after
which the port can handle Suezmax
vessels (large ships of 160,000-ton
capacity that can transit Suez Canal
in a laden condition). Both the
Chettinad group, which handles coal
at the port and the Adani group, will
handle containers, have agreed on
the project to deepen their berths,
he said.
The Daily’s report came as Japan
has announced financial, technical
and operational support for bullet
train projects in India during the
current visit of PM Narendra Modi
to Tokyo.
China is expected to unveil its
investments in India during President
Xi Jinping’s visit to New Delhi,
scheduled for the third week of this
month.
India is looking at Chinese and
Malaysian infrastructure companies
to rescue highway projects that failed
to find any takers in the country. The
Nitin Gadkari-led Road Transport
Highways Ministry has initiated talks
with some companies to get them to
bid for projects including the eastern
peripheral expressway and Delhi-
Meerut highway in fresh tenders.
“We want to get these projects
started.... We are trying to gauge
the interest of these companies in
some of these projects, so we can
float a tender soon,” said a senior
government official. The official did
not disclose the names of companies,
citing preliminary nature of talks.
There are around seven projects
worth Rs 3,400 crore that were bid
out by the previous government but
failed to find any takers. The ministry
is of the view that speedier execution
by these projects would also draw
Indian players to the sector.
Close to 189 highway projects
involving investments of around
Rs 1,80,000 crore are stuck due to
problems of land acquisition, delays
in forest and environment clearances,
non-transfer of defence land and
hurdles in rail over bridges. Indian
developers, already confronting these
and being financially stretched, have
remained lukewarm in response to
some road project bids. The previous
government could only manage to
award projects for 3,169 km of the
around 5,000 km of projects that went
for bidding in 2013-14.
The new government, which
plans to rebuild the country’s creaky
infrastructure, has identified road
development as its key focus area.
Vizag Port in expansion mode
With a target to achieve 85 million
tonnes capacity by 2015 by undertaking
mechanisation, Visakhapatnam Port is
cruising ahead to become the most
preferred port of South Asia.
Taking advantage of its strategic
locat ion and huge hinter land,
investment to the tune of Rs.13,000
crore is being made for extension of
container terminal by J. M. Baxi Group
and modernisation of ore handling
complex by Essar Ports, deepening of
channels and berths and installation of
state-of-the-art handling facilities and
other logistics. “Not only increasing
volumes, we are also making serious
efforts to handle 90 per cent of our
cargo in a mechanised environment
within a year so as to put pollution
at bare minimum,” Visakhapatnam
Port Trust Chairman M. T. Krishna
Babu said.
Inner harbour dredging, which hit
a roadblock due to variety of reasons,
is being speeded up. Dredging
Corporation of India (DCI) had already
dug up 10 per cent of one million cubic
metres. DCI is likely to complete the
job in two months. Dharti Dredging,
which has been given contract for rock
dredging, is expected to complete 100
metres of channel width by October-end.

September 15-21, 2014 7
CONSTRUCTION
Safety of construction work force
The aim of safety culture
should be to provide a
safe work layout and
work arrangements
conducive to promote
health and wellbeing of
workers
Across the wor ld safety i n
construction is a matter of concern. In
India this is one of the most vulnerable
segments of the unorganized labour in
the country. The industry being highly
labour- intensive, safety should be
comprehensively addressed at an
all-India level.
A large number of workers are
exposed to the risks of workplace
accidents and occupational health
hazards. The rate of fatal accidents
in this sector is four to five times that
of the manufacturing sector.
Compensation Acts
Since the construction sector
employs around 10 million people, the
issue of safety assumes importance.
As per one survey 165 per 1,000
workers get injured during construction
activities. The workers are exposed to
a host of hazardous substances,
which have a potential to cause
serious health and occupational
diseases such as asbestosis, silicosis,
lead poisoning, etc.
Statutory provisions are in force to
take care of the needs of workers.
For example, the Employees’
State Insurance Act, 1948 formed to
provide employee’s medical benefits,
sickness benefits, accident benefits,
etc on a contributory basis which
hardly reaches victims in time.
The Workmen’s Compensation
Act 1923 provides for compensation
during injuries/disablement, etc,
caused during work on the premises.
The process needs to be cleared of
obstacles so that the compensation
reaches in time. The Contract Labour
(Regulation Abolition) Act 1970 was
framed to provide just and humane
conditions of work for contract labour
and to put them at par with regular
employees.
The Minimum Wages Act 1948
provides for minimum statutory wages
in scheduled employments with a view
to obviate the chances of exploitation
of labour. The Payment of Gratuity
Act 1972 is a financial incentive in
token of recognition of long years of
service rendered by an employee, but
this is not in practice as in the case of
construction industry.
The Employees’ Provident Fund
Act 1952 provides for institution of a
fund where employer and employee
contribute an equal amount. It extends
to all establishments employing
10 or more persons and covers
all employees under the purview
of the act. But this kind of fund is
hardly instituted for the benefit of
construction workers.
Technical topic
The reason why no agency has
made any efforts in this direction is the
lack of specific legislation in this sector
till the introduction of Building Other
Construction Workers (Regulation of
Employment Conditions of Services)
Act 1996.
But the passing of this act alone
does not take care of everything. The
Central rules and state rules need
to be intensified and the enforcing
agencies need to be notified. However,
till now, apart from the Centre only
the states of Delhi, Kerala and
Karnataka have set up the necessary
state rules. Under the Centre the
responsibility of the enforcement of
BOCW Act has been given to the
Labour Commissioner.
However, the Chief Inspectorate
of Factories, who shares similar
responsibility to ensure safety
standards in the manufacturing
sector, has the necessary technical
background and exper ience.
The Labour Commissioner has
a n o n t e c h n i c a l ba c kgr o u nd.
Construction safety, on the other
hand being a clearly technical
subject, the office of the Labour
Commissioner may not be equipped
with the adequate know-how to carry
out the inspection of construction
sites.
Unfortunately, neither the Central
nor state governments wish to
increase their manpower or create a
new department for the enforcement
of this new legislation. Besides, the
sheer number of construction sites
spread all over the country, it will
not be adequate for the effective
implementation of the Act.
Certification of workers
The provisions of WTO and Gats
were made applicable from 2006
onwards as India being the signatory
to this accord. Under these provisions
transparency and removal of barriers
are the major aspects. To achieve
this, certification of workers will be a
mandatory clause in all tenders.
In order to ward off any future
complications with the implementation
of WTO provisions, it is high time that
all contractors working with CPWD
and officials of the department are
exposed to these requirements.
The CIDC in assistance with
CPWD has initiated the process of
training, testing and certification of
construction workers. Today there are
about 15,000 construction workers
who have been tested and certified.
Under the skill upgradation scheme,
CIDC imparts specialized training to
workers to enhance their skills.
A safety culture needs to be
developed as an integral part of the
work culture of an organization. It
must be a basic component of the
management philosophy just as
profit making is. The aim should be at
providing a safe work layout and work
arrangements which are conducive
to promote health and wellbeing of
workers which ultimately generates
the feeling of trust and loyalty among
the workforce.
Need to train workers
Wi t h t h e a d v a n c eme n t i n
technology there is more need for
training workers (operators) as per
the latest tools trends and techniques
so as to ensure the safe operation of
high-tech equipment and to avoid
any danger to human life.
The legislations that are into force
were brought with a view to avoid
labour discontent and zero down the
areas of conflict. Government’s policy
is to ensure that the intended benefits
and advantages reach construction
workers at the earliest and in full
measure.
The difficulties experienced by
these acts will come forth once
their enforcement in various states
gains momentum and subsequent
corrective measures would be taken
so as to make them more responsive
to the welfare needs of construction
workers.
(Courtesy: Construction Industry
Development Council (CIDC)
10 plunge to death at Istanbul
construction site
An elevator falling from the 32nd
story of a building under construction
in Instanbul, Turkey, killed 10 workers
on it in Mecidiyeköy district on
September 6 evening.
The elevator crashed to the ground
around 7:45 pm local time. Nine
people, reportedly those charged with
work safety at the construction site,
were detained in connection with the
deadly accident.
Prime Minister Ahmet Davutoğlu
assured the publ ic about the
investigation into the accident, and
said “a detailed probe” will reveal
whether the negligence played
a role in the accident. He added
that the government would take all
measures to prevent a repeat of such
an accident.
Aziz Torun, CEO of the company
building the 42-storey housing block in
central Istanbul, denied the allegations
that the elevator carrying workers was
faulty. At a press conference Torun
cited several people were detained
and pledged that his company would
fully assist in the judiciary investigation
to find those responsible.
Torun said the work safety measures
were in place at the construction site
and the elevator that dropped down
the shaft was capable of carrying
2,700 kilograms and 28 people. “I
take that elevator too when I visit the
site,” he said.
The CEO denied reports that the
elevator and other elevators at the site
“always had a glitch.” “It is an outright
lie. We rented it from another company
and two employees of that company
work at the site for daily inspection and
maintenance,” he said.
He noted that although workers
at the site are trained for work safety,
“it is difficult to have them all act
in line with safety standards at a
construction site where about 1,500
people work.” Some workers backed
Torun’s statement about the safety
of the elevator, and said there were
sensors on the elevator that emits a
warning siren in case of overload.
Me a n w h i l e , a g r o u p o f
demonstrators gathered in front of
the construction site to protest the
accident that they claimed was the
result of negligence. Riot police
attempted to disperse the crowd that
blocked the entrance to the site and
demonstrators hurled bottles and
stones on the police.
Speaking about the accident,
Istanbul Governor Hüseyin Avni Mutlu
said security forces may detain more
people in connection with the incident
as the investigation is still underway. “It
should not be viewed as an accident.
Such incidents should not happen at
construction sites and similar places
where work safety is supposed to be
at the highest level.
M u t l u added t h e r e were
construction materials on the elevator
along with the workers. He stated
that although the probe was not yet
concluded, initial findings showed that
the workers were on the elevator long
after the end of working hours.
Minister of Labour Social
Security Faruk Çelik said the accident
happened despite their constant
warning to employers and employees
in the construction sector to act with
the utmost care in terms of work
safety.
“Companies have to employ labour
safety experts under the current
regulations and those experts should
issue accurate reports about the
working conditions in the workplace.
We will look into whether the experts
and the company are at fault here,”
he said. Çelik said the work at the
construction site was suspended
following the accident.

aelr aeestt September 15-21, 2014 8
Disadvantages
of high-rise
High-rise buildings
absorb direct and
reflected solar radiation
of surrounding low-rise
buildings and convert it
into heat
245 metres either approved or under
construction.
Ahmedabad too has about 13 tall
buildings which are under construction
and are ranging between 200 metres
to 410 metres. Hyderabad, Bengaluru
and Pune too are witnessing some
development in construction of tall
buildings for residential-commercial
purpose wi th some approved
projects.
All in all, this amounts to around
60 skyscrapers. Developers see such
edifices as a good way to attract
potential buyers -- high-rise buildings
are a good gambit to differentiate their
offerings from the rest of the pack.
However, this coin has two sides –
high-rise development has its own
share of demerits, too.
Effect on urban wind
Rise in the elevation of a building
increases the distance of the wind
shadow and minimizes the air flow at
the street level behind the building.
Near high-rise buildings, the local
wind speed is high even in summer.
In addition, high-rise buildings tend to
create a turbulent flow of the gradient
wind as a result of increasing the
roughness of the boundary layer
surface.
More air pollution
In summers, local wind speeds
near skyscrapers are very high
and troublesome. The ventilation
conditions in the urban spaces and
major streets with high vehicular
traffic have significant impact on the
concentration of air pollutants at the
street level. The high velocity and
turbulent wind at the street level results
in the mixing of the highly polluted low-level
air with cleaner air flowing above
the urban canopy.
Effect on urban radiation
High-rise buildings absorb direct
and reflected solar radiation of
surrounding low-rise buildings and
convert it into heat via convection of
long wave radiation. However, when
buildings are of different heights, the
walls of the higher buildings absorb
part of the reflected and emitted
radiation and block a portion of the sky,
resulting in reduced solar exposure
and long-wave emission from the roofs
of the lower buildings.
Higher urban temperature
Size and density of the built-up
areas affect urban areas temperatures.
In the congested centres of large
cities, temperature levels are generally
higher than in the suburbs. The largest
elevations of urban temperature occur
during clear and still-air nights, also
called ‘Urban Heat Island’.
Excessive opacity of high-rise
buildings in city centres results in
concentrated heat generation by
high-density land use (traffic, lighting,
heat exhaust) and contributes to the
creation of urban heat islands.
Effect on night cooling
Nocturnal radiation is a major
climatic factor that reduces atmospheric
heat in urban areas located in hot, dry
regions. Nocturnal radiation decreases
when the density and the height of
built-up urban masses increase.
High-rise buildings store solar
energy during the day time and
release it slowly into low-speed local
wind, especially at night. The vertical
distance between cool winds above
buildings roofs and the ground surface
is long, and this results in decreased
radiant cooling during the nights.
Low-rise buildings that match trees
heights of 12-15 meters, on the other
hand, penetrate night-time ventilated
cooling at the ground level and also
store cool radiation through built-up
urban areas.
Other factors
Tall buildings are colder in winter
and hotter in summer than regular
buildings, and therefore require more
heating and more cooling. This is
particularly true of modern glass
towers. Thus, a lot of energy is required
to keep these high rises functioning.
Exterior cleaning and maintenance
of a high-rise building can be very
costly and dangerous. With global
warming (which causes higher
wind speeds) on the rise, insurance
companies often refuse coverage to
maintenance companies in charge
of high-rise buildings at certain times
of the year.
High-rise buildings take longer to
build, and due to rapid and heavy
construction activity within the
city, there is a heavy load on civic
infrastructure.
In high-rise buildings, the average
construction cost per square foot is
20-25 per cent higher if the building
has more than 12 floors.
Major modi f icat ions and/or
renovations in a skyscraper are
significantly more cost-intensive.
If a new building has to be built on
the same piece of land, the number of
claimants is vastly higher.
Remedial infra measures
When it comes to our largest cities,
there is not much one can do about
these factors – and indeed, they are
accepted as a fact of life in a city like
Mumbai, which must grow vertically if it
is to grow at all. Unfortunately, the areas
of our cities which are in the biggest
need of high rise buildings are also the
ones which offer the lowest scope for
remedial infrastructure measures that
could reduce the impact of skyscraper
development.
Hard facts of housing shortage
By 2020 the country
will be facing an extra
demand for more than
30 million additional
homes
below-average standard homes.
This does not mean that the average
income of Indians is reducing, but
only that housing prices have been
increasingly exponentially. There is a
huge gap between supply and demand
and people have fewer choices when
it comes to living standards.
In some cases, people have to
queue up and take part in lotteries
to have homes allotted to them.
According to the Ministry of Housing
Urban Poverty Alleviation, affordable
housing constitutes living units for
which the equated monthly instalments
(EMIs) should not exceed 40 per
Even today, a majority of Indians
still find it hard to fulfil the desire to own
a home. Surprisingly, this is a decade
when luxury items like Led TVs and
smartphones are becoming affordable
and housing is getting more and more
expensive.
Most people in India still live in
extra demand for more than 30 million
additional homes.
According to the 12th 5-year plan
(2012-2017), the housing shortage
in India has reduced to 18.78
million. However, the data collection
is questionable and government
departments continue to argue on
the exact figure Also, it is not just the
income of the EWS that seems to be
a deterrent factor here. Land prices,
financial and regulatory concerns and
other factors also play a big role in the
problem.
Today, land is not an easily
available asset in India. In most
cases, acquisition of a plot for housing
development is a cumbersome, time-consuming
and highly expensive
process. With increasing population
and rising urban density, the demand
for land has also seen an exponential
rise. The shortage has also been
contributed to by poor municipal, state
and central regulations.
Rising cost of construction
Land prices are higher than the
rate which is compatible with the
development of mass real estate
development – read affordable
housing. There also has been an
increase in the cost of construction,
directly reflecting in the housing
prices.
Another problem is the lack of
infrastructure. Developers are bringing
out projects in peri-urban locations to
keep the housing cost down, but these
cent of the owner’s gross monthly
household income. However, even
homes priced between Rs. 20-40
lakh are also often referred to as
‘affordable’ by developers.
Main concern
Whatever the exact definition of
‘affordable housing’ may be, the main
concern is that there is a huge shortage
of supply in this segment. 80 per cent
of this shortage is still concentrated
in the economically weaker section
(EWS) of the Indian population. If the
current backlog is maintained, then
by 2020 the country will be facing an
Subhankar
Mitra
Head, Strategic
Consulting (west)
JLL India
locations are generally unattractive
based on lack of public transportation
and increasing pollution in these
areas.
The majority of Indian home seekers
are workers moving into cities and
looking for housing that would be
compatible with their starting incomes.
The ones from the economically
weaker sections look for properties
that provide access to public transport,
water and power supply systems,
sewage treatment lines and other
conveniences.
Things to look for
In this respect, they are no different
from home buyers from the middle- or
upper-middle class. Why should they
be? These are the basic things that any
home buyer would look for.
No matter what measures are
proposed by the government of
self-governing bodies of real estate
developers, they will not be able to
reduce the figure of housing deficit if
they do not start catering to the EWS-generated
demand.
The bulk of the existing shortage
of homes remains squarely in the
genuinely affordable housing sector.
No amount of supply in housing units
costing above Rs 20 lakh is going to
make any difference – in fact, supply
priced above this will just add to the
oversupply that we are seeing in most
cities.
Sachin
Agarwal
CMD, Maple Shelters
Internationally, a building that
reaches or exceeds the height of 150
metres is considered a skyscraper.
Until recently, Mumbai was the only
Indian city with high-rise buildings.
The financial capital continues to see
the highest demand for skyscrapers,
as the only option to grow there is
vertically.
It now seems that in coming
decade, Maximum City will receive
an even more cohesive skyline, with a
host of projects in the race to touch the
sky being constructed. The demand for
high-rise buildings is certainly growing,
and other cities are catching up.
Mumbai continues to have the
maximum number of tall buildings
approved or under construction.
Development of India One building
-- the tallest in the country -- has
already begun in Mumbai. It spans
126 floors and stretches up to a height
of 720 metres. Apart from this, the
city has more than 30 such super-tall
buildings ranging between the height
of 150 metres to 450 metres either at
the approval stage or already under
construction.
Good gambit
New Delhi, the capital of India, has
around a dozen of such buildings
coming up. They range between
heights of 150-300 metres. Kolkata too
is catching up with 9 such residential
buildings extending to the height of

September 15-21, 2014 9
Hitachi to send two
200-ton excavators to Qatar
Hitachi Construction Machinery
Middle East Corporat ion has
announced that it is to send two
EX-1900-6 BH excavators to Qatar in
October 2014.
The gigantic duo has been ordered
by main contractor working on Doha’s
New Port Project (NPP), north of
Mesaieed.
The large excavators, which
have operating weights of 191 tons,
have been purchased by Hyundai
Engineering Construction Company
Limited’s Qatar division.
The machines rank amongst
the industry’s biggest excavators,
with bucket capacities of 12m3.
The sizeable scoops have been
enlisted in an attempt to enhance
bund construction and reclamation
productivity.
It is also hoped that the reduction in
necessary operating hours, facilitated
by the excavators’ size, will lower
emission levels at the port project.
Hyundai Engineering purchased
the EX-1900-6 BH excavators from
Hitachi’s Qatari dealer, Arabian Supply
Center (ASC). The Doha-headquartered
channel partner will also coordinate
delivery of the machines.
Doha’s NPP will span 20km2
following completion. Construction
is being executed in three phases,
with Hyundai Engineering handling
excavation activities on the third: Canal
Excavation Quay Walls and Channel
Dredging.
Once operational, the Qatari port
will boast an annual handling capacity
of more than 12mn 20-foot equivalent
units (TEU).
The Hi tachi EX-1900-6 BH
excavators will be delivered with three
buckets: two 5.8m3 ripper scoops for
the excavation of hard materials, and
a 12m3 standard bucket to handle
loose materials.
The duo’s primary responsibility
will be to excavate hard limestone and
softer soil at the port-build site.
The latest sale forms part of
Hitachi’s strategy for the Middle East
in the lead-up to major events such
as Expo 2020 in Dubai, UAE, and the
2022 FIFA World Cup in Qatar.
EQUIPMENT
BEML launches
new motor grader
suitable for road construction projects
in rough terrains.
The equipment is provided with
joy stick for ease of operation which
reduces operator fatigue. It is fitted
with accumulator assisted all hydraulic
braking which ensures fast response,
while working under demanding
conditions.
The ergonomically designed
cabin has improved operator
comfort, wider visibility and safety,
fully programmable digital display
system with a seven inch LCD screen
provided for improved diagnostics.
T h e s t a t e - r u n BEML L t d ,
manufacturer o f heavy earth
moving equipment for mining and
construction sectors, has launched
an indigenously developed new
version of motor grader - BG405A
for deployment in the infrastructure/
construction sector.
The new motor grader is BS III
compliant engine with a net horse
power of 119HP and is certified by
ARAI.
BG405A is designed with articulated
boom and has a compact wheel base
with 10 feet blade and has a turning
circle radius of 6.5 metre, especially
TMEIC India to manufacture high
voltage induction motors
Toshiba Mi tsubishi -Elect r i c
(TMEIC) India announces its plan to
manufacture High Voltage Induction
Motors (HT Motors) at its upcoming
factory at Tumkur near Bengaluru in
Karnataka. This factory will start its
manufacturing from October 2015,
where TMEIC’s existing range of
HT Motor series TM21-G will be
manufactured from 200kW up to
23,000kW power range in high voltage
range of 3.3kV up to 11kV.
This will include TEFC (frame
315 up to 560), CACA (TEAAC),
CACW (TEWAC) (frame 400 up to
900), type motors for horizontal, and
vertical mounting, for safe area and
hazardous area environments. TMEIC
will manufacture these HT motors
primarily meeting all Indian standards
and environment requirements. With
manufacturing capacity of around
2,700 of HT Motors per year, TMEIC’s
Indian factory will fulfil needs of
Indian customers as well as global
customers.
The main features for the TM21-G
series motors will be its most
advanced optimally engineered
design done using ultra-modern
techniques of engineering. This gives
benefits of compact smaller footprint,
higher power output from smaller
frame sizes, higher performance
parameters of efficiencies, power
factor, noise and vibration, and hence
best value for its money for the end-users,
OEMs, EPCs around various
industries.
TMEIC presently manufactures its
entire range of rotating machines at its
Keihin and Nagasaki works in Japan.
Please contact the undersigned for
more details and information.
TMEIC as well is very happy to
announce its launch of ‘TMdrive-
MVe2’ series medium voltage inverter
in Indian market, which is a latest
generation MV-VFD (MV-VVVF Drive)
to work with existing or new induction
and/or synchronous motors. The
TMdrive-MVe2 is a regenerative
IGBT Front End converter Multi-Level
medium voltage variable frequency
modular drive system which uses 3
level NPC inverter technology for its
Cell Inverter Module.
This means for getting a 6600V
VVVF output, the drive uses just 3
Cell modules per phase, which makes
this very compact and efficient drive
system. It is available in 3.3kV, 6.6kV,
11kV voltage output, for various
power ratings.
TMdrive-MVe2 is a versatile, very
rugged MV Inverter, which is used in
oil gas, refineries, petrochemicals,
chemicals, fertilizers, steel plants,
power generation plants, cement
plants, water and wastewater
plants, rubber, plastic, paper, mining
industries for variable and constant
torque applications.
TMdrive-MVe2 is a perfect fit
product for doing retrofitting of MV
Drives for energy savings for existing
fan, pump, compressor applications.
With many superior features, this MV-VFD
presently boasts of the world’s
best technology product.
TMEIC with its global reputation
on high quality standards has already
made its inroads in Indian market to
serve Indian Industries with this product.

aelr aeestt September 15-21, 2014 10
Residential and office
outlook
The India Real Estate
Outlook 2014 serves as
an industry guide for
developers, suppliers,
financial institutions,
consumers and
everyone else tracking
the sector
The gap between demand and
supply has been narrowing gradually
over the last year, and this trend is
expected to continue in the next
six months on the back of a strong
recovery in sales volume. The impact
of this can be seen in the weighted
average prices, which have been
inching upwards since 2012.
During H1 2014, prices in Bengaluru
have appreciated at the fastest pace
developed a model that captures the
relative health of a city by taking into
account demand, supply and the age
of unsold inventory.
The age of unsold inventory is the
number of quarters that have passed
since the inventory entered the market.
A higher age of unsold inventory
indicates that a large number of old
projects continue to remain unsold.
Demand and supply is represented by
The residential markets of the top
six cities in India -- Mumbai, National
Capital Region (NCR), Bengaluru,
Pune, Chennai and Hyderabad -- have
been witnessing extreme volatility in
terms of demand and supply over the
past two years.
While the residential market showed
signs of recovery in 2012 and H1 2013,
there was a sudden drop in new
launches and absorption from H2
2013 onwards. Factors like slowing
economic growth, rising interest rates
by banks, high inflation and the weak
rupee, among others, contributed
towards building a negative sentiment
among home buyers and resulting in
a dwindling sales volume.
Phenomenal growth rate
While new launches fell by 32 per
cent in H1 2014 compared to H1
2013, the sales volume dropped by
27 per cent during the same period.
All the cities witnessed a steep fall
in absorption, in the range of 14-37
per cent during H1 2014, with the
Bengaluru and NCR markets falling
by the lowest and highest rates,
respectively.
The election results, sops for the
housing sector in the Union Budget
and all the subsequent decisions taken
by the Central government in order
to revive the economic growth of the
country seem to have changed the
home buyers’ sentiment from negative
to positive in the past three months.
The sales volume in these six
cities is expected to experience a
phenomenal growth rate of 26 per
cent in H2 2014, compared to H2
2013. Mumbai and Bengaluru are
expected to lead in the recovery of
sales volume, with 49 per cent and 26
per cent growth respectively, during
this period.
In contrast to this, the number of
new launches is forecasted to report
a subdued growth of 5 per cent in the
next six months. High unsold inventory
and the poor response received by the
new projects launched during H2 2013
and H1 2014 are expected to deter the
developer community from launching
any fresh projects in most of the cities
during H2 2014.
Strong recovery in sales
The only exception to such a trend
will be the NCR and Chennai markets
that are forecasted to witness a strong
growth in new launches, as these
markets had observed the sharpest
fall during H2 2013, resulting in a low
base during that period.
and Mumbai are forecasted to post
the maximum year-on-year growth
in absorption during H2 2014, at 96
per cen, 85 per cent and 76 per cent,
respectively.
Vacancy levels
In terms of vacancy, the Bengaluru
office market continues to lead, with
the lowest vacancy level of 11 per cent
during H1 2014, compared to 19-22
per cent reported in the other cities.
The steep fall in new completions,
which was reported at 3 million sq
ft during H1 2014, compared to an
absorption level of 6 mn sq ft, has
helped Bengaluru in attaining its
current level of vacancy.
Going forward, vacancy levels
across all the six cities are expected
to improve marginally during H2 2014,
except for Mumbai. A sharp increase in
transaction by occupiers. However,
the average deal size has reduced
marginally in most of the cities during
the same period.
While Pune has witnessed the
steepest drop in the average size
of deals during H1 2014, Bengaluru
has been able to maintain it, despite
a substantial jump in the number of
deals. The ticket sizes of transactions
have considerable influence on the
rental movement during a particular
period.
While tenants with a requirement for
large spaces tend to have the upper
hand during rental negotiations, the
reverse is true with small-size deals.
Hence, a drop in the average size
of deals could lead to an upward
pressure on rents.
Unlike residential markets, where
20MN
10-20 MN
7.5-10 MN
5-7.5 MN
2.5-5 MN
2.5 MN
Ticket Size Split of Launched Units during H1 2014
Mumbai NCR Bengaluru Pune Chennai Hyderabad
Source:
Knight Frank
Research
100%
80%
60%
40%
30%
20%
0%
City-wise New Launches and Absorption forecasted for H2 2014
Source: Knight Frank Research
prices have been increasing sharply
over the last three years despite a
slowdown in the sales volume, the
growth rate achieved in the rental value
of office space has been relatively
constrained.
Rental growth
This is despite the fact that
absorption in each of the six cities has
been growing steadily since 2012. The
primary reason for such an anomaly is
that the majority of the transactions are
taking place in the peripheral business
districts, where rents are considerably
lower than those in the central or
suburban business districts.
This pulls down the weighted
average rent of a city. During H1 2014,
the weighted average rental growth in
these six cities was limited to single
digits, except for Pune. Unlike other
cities, the Pune office market has
witnessed a strong traction in the
SBD markets, compared to the PBD
markets during H1 2014.
This is a clear reversal in trend,
wherein the SBD markets have
City-wise new completion, absorption and vacancy during H1 2014
LAUNCHES
ABSORPTION
NEW COMPLETION
ABSORPTION
VACANCY (RHS)
7
6
5
4
3
2
1
0
30%
20%
10%
0%
22%
21%
11%
20%
22%
19%
60,000
50,000
40,000
30,000
20,000
10,000
0
LAUNCHES
ABSORPTION
City-wise New Launches and Absorption during H1 2014
Source: Knight Frank Research
40,000
30,000
20,000
10,000
0
of 11 per cent, compared to H1 2013.
This was followed by Hyderabad at
9 per cent during the same period.
Prices in Hyderabad seem to be finally
catching up with the other cities as
the political uncertainty regarding the
decision of dividing the state of Andhra
Pradesh has ended.
Going forward, Mumbai i s
forecasted to lead in terms of price
appreciation during H2 2014, at 10
per cent compared to H2 2013, on the
back of a strong revival in absorption.
Pune has emerged as the most
affordable city during H1 2014, as 83
per cent of the new launches were
below the ticket size of Rs 5 million.
Since the majority of the new
projects were launched around the
periphery of the city, the ticket size
of the apartments in these projects
has remained small, despite a steady
growth in prices. Similarly, 75 per cent
and 62 per cent of the new launches
in Chennai and NCR respectively were
below the ticket size of Rs 5 million.
Mumbai has emerged as the most
premium market, with 34 per cent of
the total launches during H1 2014
above the ticket size of Rs 10 million.
Mumbai was followed by NCR and
Hyderabad at 23 per cent and 20 per
cent respectively.
Despite having the lowest weighted
average price among the six cities,
Hyderabad has a large number of
projects above the ticket size of Rs 10
million. The primary reason for such
a trend is the fact that the apartment
sizes in most of the new projects are
still on the higher side, compared to
the other cities.
Inventories
Comparing these cities in terms of
the number of launches and absorption
does not yield a true picture of the
health of the market. Hence, we have
the Quarters to Sell Unsold Inventory
(QTS) in the model.
QTS can be explained as the
number of quarters required to exhaust
the existing unsold inventory in the
market. The existing unsold inventory
is divided by the average sales velocity
of the preceding eight quarters in
order to arrive at the QTS number for
that particular quarter. A lower QTS
indicates a healthier market.
Currently, the Bengaluru residential
market is the healthiest market among
the six major cities. With a low QTS
and age of unsold inventory, Bengaluru
is the most balanced market, despite
a steady drop in sales volume since
H1 2013.
Developers in Bengaluru have
been vigilant with regards to the falling
absorption level, and have reacted
prudently by deliberately shrinking
the number of new project launches
in the last year.
The health of the Mumbai residential
market is the poorest, with the highest
QTS and a large number of unsold
inventories from previous years.
The health of the Mumbai market is
expected to improve marginally in the
coming six months, on the back of
recovery in sales volume and slower
growth in new project launches.
Office market
The office market of the top six
cities has been recovering steadily
over the past two years, with vacancy
levels falling from 21 per cent in H2
2012 to less than 19 per cent in H1
2014. The recovery has been led
primarily by the gradual increase in
absorption across the top six cities.
The combined absorption of these
cities has increased from 14.7 million
sq ft in H2 2012 to 17.9 million sq ft in
H1 2014, and we forecast this to rise
even further to 18.7 million sq ft during
H2 2014.
For the full year 2014, we expect
absorption to touch 36.5 million sq
ft –- an 8 per cent jump from the
33.9 million sq ft reported in 2013. In
contrast, new completions expected to
hit the market will grow by 3 per cent, to
37.4 million sq ft in 2014, compared to
36.4 million sq ft in 2013. This will result
in the vacancy levels dropping further
to 18.4 per cent by the end of 2014.
Chennai and Bengaluru have led
in terms of growth in absorption, at 47
per cent and 29 per cent respectively
during H1 2014, compared to H1
2013. However, Hyderabad, Pune
new completions, which is forecasted
at 6.6 million sq ft, compared to just
4.2 million sq ft of absorption during
H2 2014, is bound to push the vacancy
levels in Mumbai even higher.
Vacancy levels in the Chennai
market are expected to improve
considerably in the next six months,
as absorption in the city is projected to
far outstrip new completions. While 2.2
million sq ft of office space is estimated
to be transacted in Chennai during H2
2014, new completions are expected
to touch 1.1 million sq ft.
The IT/ITeS sector continues to lead
in terms of share in total absorption
across all the cities, except for Mumbai.
Demand from the manufacturing
sector has dominated the Mumbai
office market, followed by the other
services sector during H1 2014.
Interestingly, the share of the other
services sector has been increasing
steadily across all the six cities over
the past few years. Currently, the
other services sector contributes more
than one-fifth of the total office space
demand in the majority of these cities.
The other services sector includes
companies from consulting, retail,
eCommerce, infrastructure and real
estate, among others.
Substantial jump in deals
During H1 2014, the office space
market in each of the six cities has
witnessed a substantial jump in the
number of deals. The total number of
deals has increased from 542 in H1
2013 to 623 in H1 2014.
This is a clear sign of improvement
in the office space market, as an
increase in the number of deals
indicates a wider participation in
regained their share in total transaction,
which they had been losing out to PBD
markets over the last few years. Since
the rental values in SBD markets are
on the higher side, the city’s weighted
average rent has been observing a
faster growth.
The weighted average rental value
in Mumbai has been on a downward
trajectory since 2012, as the shares
of peripheral and suburban business
districts have been increasing steadily
with each passing year at the cost of
the CBD and off-CBD markets.
(contd. on pg 11)

Cir 37 2014

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Cir 37 2014