Rental agencies are gauging the market closely prior to acquiring the category and class of cranes as per demand. Delhi-based crane rental heavyweight, Apollo Cranes, has placed an order for Action Construction Equipment’s (ACE) new 150-ton crawler crane. Sethia Erectors is expected to acquire a fair number of Tadano mobile cranes, and Kobelco India has clinched a deal for delivering its i-series of India make of crawler cranes. Purchases are also being contemplated by Gandhi Cranes and civil contractor SB. Protech.
The scenario changed with the Reliance J3 expansion project and other greenfield projects in the hydrocarbon sector in western India and the heightened activity in wind power, due to which, rental agencies began to enter long-term hiring agreements with project owners and EPC contractors.
Roads & Bridges to the rescue
Though much of the bearish mood prevailing can be ascribed to an oversupply of equipment in the market, the silver lining for rental agencies is the anticipated upsurge in demand for cranes, especially from Roads and Bridges for erection of girders and well sinking for bridges across rivers, as seen in the Eastern Peripheral Expressway on the outskirts of Delhi.
It is estimated that India’s road sector will offer construction opportunities to the tune of `5.77 trillion. According to NHAI, 831 projects spanning a length of 67,446 km?? are in the pipeline (both announced and under bidding) and will entail an investment of `9.16 trillion. The government has set a completion target of 15,000 km during 2017-18. The uptake of engineering, procurement and construction (EPC) is likely to increase. New financing models such as toll-operate-transfer(TOT) and hybrid annuity model (HAM) have also been attracting substantial interest in India’s road sector.
Metro rails & RRTS to up demand
Demand for cranes will also be led by expansion of the metro network across cities and by the regional rapid transport system (RRTS). The National Capital Region Transport Corporation plans to develop eight RRTS projects. Currently, three RRTS (Delhi- Ghaziabad- Meerut, Delhi-Gurgaon-Rewari-Alwar, and Delhi-Sonipat-Panipat) projects are being undertaken on a priority basis, while the Delhi-Faridabad-Ballabhgarh-Palwal (60km), Delhi-Bahadurgarh-Rohtak (70km), and other peripheral routes are in the planning stage.
Rental agencies are also eyeing upcoming hydrocarbon projects such as the greenfield HPCL refinery at Barmer in Rajasthan, and expansion of the HPCL Vizag Refinery. However, it is to be seen how soon the (proposed) big ticket industrial and transportation projects get actuated and open up more channels of business for the crane rental agencies.