KNR Constructions Making Progress Despite Challenges

K. Jalandhar Reddy, Executive Director, KNR Constructions
K. Jalandhar Reddy, Executive Director, KNR Constructions, is optimistic of new business opportunities emerging across infra sectors.

What opportunities do you see emerging in 2022 and in the years ahead in infra construction projects?
India is expected to become the third-largest construction market by 2025. The country will require investments worth Rs 50 trillion (US $777.73 billion) across infrastructure by 2022 and 2023 for sustainable development across all regions.

A host of investments has been planned by the government in the transportation infrastructure and other sectors such as water, power, urban and industrial infrastructure. There is a huge opportunity in the highway network development as only 24% of the NH network is 4-lane.

The economy is currently going through a difficult patch due to the impact of the pandemic and the Ukraine war. However, the forward-looking development plans by the government and the progressive vision of the industry stakeholders can, together, lead the country to more growth in the coming years.

How has KNR managed to complete many challenging projects ahead of schedule?
Once the project is awarded to us, we study and analyse it thoroughly. A project team with a qualified and experienced project manager is set up. A concrete project plan with critical milestones and a procurement plan for Men, Material, Machinery, and Funds is prepared. The client is informed on the construction plan on a periodical basis and monitoring of all works, including testing at regular intervals is assigned once construction begins. All these measures and timelines ensure successful project deliveries.

What is your preferred model for infrastructure development: BOT (build-operate-transfer), HAM, EPC, any other?
KNRCL’s preference is the Hybrid Annuity Model (HAM), which was implemented and designed to revive investments in road infrastructure projects in India. In the first half of FY22, about 51% of the 1900 km road projects have been awarded under HAM by NHAI. The advantage of HAM is that it gives enough liquidity to the developer and the financial risk is shared by the government. While the private partner continues to bear the construction and maintenance risks as in the case of BOT (toll) model, in HAM he is required to only partly bear the financial risk.

The road and highway Minister wants to speed up road construction to 60 km/day. Do you think that we have enough resources, the expertise, the technologies, and the workforce to make this possible?
Yes, the Minister has set an ambitious target of 60 km per day of highway construction to ensure speedy recovery of the economy in the aftermath of the Covid -19 pandemic and recession. During 2021-22, the country achieved a road building pace of 38km of highways per day; these achievements were unprecedented and have no parallel in any other country in the world. A major portion of the highways are to be built under the PPP model (either HAM, BOT/Toll, and Annuity) and balance portion under the EPC model. At present, 55% of the highway projects are using the HAM model, EPC is 30%, and rest is the BOT model.

To build 60 km per day would be a Herculean task. If we analyse the present inflationary trend with the input cost of steel, bitumen has shot up by 40% and cement by 20%. The developer is not fully compensated due to the price rise. Sourcing of equity for the PPP project continues to be difficult for most of the developers who could not monetise the assets. Even this is not the right time for the developers who are planning through Invit to mobilise funds.

Further, the new tendering norms of adjusted equity for the outstanding completion of projects shall have a telling effect on the medium-sized bidders. With the ever increasing bank rates, the developers may not be in a position to sustain their bottom-line.

Our road developers have the technology, the expertise, and the machinery to achieve the target, provided the Ministry of Roads/NHAI take the following proactive measures:
  • Buy back completed HAM / BOT assets after the COD at an agreed ROE of which assets NHAI can monetise under Invit.
  • NHAI/ Ministry of Road to discuss with GoI to reintroduce under 80 I clause under IT for the benefit of the developers.
  • Simplification of GST for HAM projects.
How is KNR Construction managing its fund requirement given that Banks and NBFCs are being extra cautious while lending?
KNR construction through their asset light policy has monetised 1 BOT and 3 HAM projects and has entered into an in-principle agreement to monetize 4 more under-construction road HAM projects. This enables the company to churn their capital in a timely manner and deploy the funds in new HAM projects. Added to this, the timely completion of projects and to bid projects only at expected profit levels has strengthened the bottom-line and liquidity position of the company. Hence, there is no proposal to raise any capital from the market.

KNR Constructions Making Progress Despite Challenges

What are the major issues affecting contractors of road projects?
The present inflationary trend is jacking up the rate of Cement, Steel and Bitumen by 25%, 50%, and 40%, respectively, over the past one year. This escalation is not fully covered and is affecting the viability of projects. GoI has to come up with an escalation compensation package for the infra sector as the price rise is sudden due to Russia-Ukraine war and other reasons. Availability of 80% land is a major issue for which NHAI is taking the necessary steps.

What scope do you see for technologies like Artificial intelligence (AI), machine control, and IoT, especially in major infra projects?
The “new automation” of the next few decades—with much more advanced robotics and artificial intelligence (AI)—will widen the range of tasks and jobs that machines can perform. They have the potential to cause more worker displacement and inequality than older generations of automation.

The Make in India concept can induce or compel the construction industry to automate workflows and processes using technologies to stay ahead of competition. Digitalization will bring in significant efficiency gains by connecting men, machine and materials.

Globally, construction industries are witnessing breakthroughs in the form of new AI-based developments such as automated vehicles for digging and loading materials, drone-assisted surveillance, robot-assisted bricklaying of roughly 3,000 bricks per day and a robot to paint walls about 30 times faster than a human, at a speed of about 60 square feet per minute and can work at heights from 8ft to 14ft.

Greater emphasis is being given to implementation of construction technologies for various operations, for workers’ safety, and there is clearly a wider scope for the implementation of these technologies in the construction process, right from the initial design stage to on-site construction works to building maintenance functions. Moreover, this can help minimise labour dependence while ensuring increased productivity and quality.

Much attention is also given for implementing AI for workflow management, digitalization construction workflow processes, and usage of sensors throughout the construction process, as they provide a platform for the management of data. Drone technology is being deployed for surveys, monitoring, and job site analysis. Efforts are also on to implement robots for onsite tasks like cutting and bar bending. The possibility of using it for dismantling concrete slabs, walls and other interior structures can also be explored.

To ensure workers’ safety, wearable sensors to alert safety supervisor, safety vest sensors, helmets, work boots are being used. The latest in-built technology with camera, phone, and red lights is also being explored to enhance safety at site. Virtual reality (VR) is already in vogue at sites wherein workers get exposure to environments and training imparted to them on everything from operating cranes and excavators to doing welding and masonry work. Through Augmented reality (AR) technology company workers are trained at sites to improve safety on the construction site.

As a part of automation, Mobile technology is used extensively for real-time data collection and transmission between the jobsite and project managers in the back office. Also, toll data is monitored from the headquarters in real time. Cloud-based solutions are being used to enable on-site employees to submit timecards, expense reports, requests for information (RFIs), work records, and other verified documentation. We are also evaluating the introduction of robotics in the 3D printing technology to effectively print an entire prefabricated flyover segment structure and later assemble them into a completed flyover.

By implementing automation processes, the decision-making processes can be streamlined, and communication gaps can be easily eliminated. This can help in improved workflow, lower costs, better resource management, faster turnaround times, and eliminate wastage.

The Indian “brick and mortar” construction industry is entering the digital age and has a vast potential for digitalization. Companies have to focus on implementing digitalization, innovative technologies, and new construction techniques in order to improve productivity and efficiency.

KNR Constructions Making Progress Despite Challenges

What is your order book for FY 2021-22 and what opportunities do you see emerging in FY 22-23?
As on March 31st, 2022, the company has an outstanding order book position of Rs.9766 crores. EPC road projects and HAM projects constitute 75% of the total order book, while irrigation projects constitute the remaining 25%. The present order book gives 2.5 to 3 years turnover visibility. The company is also exploring projects in railways, metros, river linking, and mining and plans to add new orders to the tune of Rs 4000 cr during 2022-23.
Everything is Possible Through Hard Work
BRO has been at the forefront of adopting the latest technologies, which are both environment-friendly and cost-effective, and have resolved many construction problems, while facilitating speedy execution of projects. The organisation has not only constructed

Read more ...

Why India is an Important Market for TEREX
Terex enjoys a strong brand recall in India’s construction equipment market, especially in crushing and screening, pick and carry cranes, and the more recent solutions for waste recycling. John L. Garrison, Chairman of the Board, President & CEO, and Kieran

Read more ...

Escorts-Kubota - Ready to Showcase Its Strengths to the World
Sanjeev Bajaj, Chief Executive, Escorts-Kubota discusses with S.A.Faridi, the synergy that the joint venture between India’s multinational conglomerate Escorts Limited and the renowned Japanese Company Kubota Corporation will bring to India’s construction

Read more ...

SROT: Indigenizing Production
Yusuf A S Inamdar, Director - Industry, SROT, and Regional Business & Technical Head, J Kumar Infraprojects Ltd, throws light on how the SROT Incubation centre, which is a vital step towards achieving an Atmanirbhar Bharat, will help budding entrepreneurs

Read more ...

Neptune innovates artificial sand, green sand & artificial aggregates
We have four major divisions within Neptune: our Building Material and Construction Technology Division focuses on building construction materials. We are a leader in fly ash brick plants, concrete block and paver manufacturing plant, CSE brick plants, red

Read more ...

Everest Engineering Equipment - Catering to Mega Infra Construction Projects
Everest Engineering Equipment, exclusive distributor of GJJ passenger hoists and platforms in India, has grown tremendously with many new customers and repeat buyers. Discussing the company’s expansion plans, PV Ramdev, Managing Director, informs

Read more ...

Arihant Panel Fittings: Meeting Demand for Quality Products
We are providing customised products and innovative solutions by constantly investing in R&D to come up with new designs and technologies. Mahendra Jain, Director. Arihant is meeting demand for products such as quarter turn locks, compression locks

Read more ...

GMMCO: Providing a Seamless Experience to Customers
Gmmco Ltd., a part of the 2.9 billion dollar diversified CK Birla Group, is keeping up the Group’s legacy of helping build the India of tomorrow by offering world-class and innovative solutions for infrastructure and mining. V Chandrashekar, Managing

Read more ...

Moteurs Baudouin
We are fully geared up with the technological advancements required to meet the CPCB IV+norms with our flexible and dependable power solutions. Gurunath Kulkarni. For over 100 years, Baudouin has been designing the highest quality diesel and gas engines for

Read more ...

Builders Association of India: Bridging the Gaps
Nimesh Patel, President, BAI & Managing Director, Maruti Infrastructure Limited, discusses the challenges and issues faced by the construction and real estate industries of India; why BAI is propagating a Unified Standard Contract Document, and how the

Read more ...

Volvo CE India: Designing Machines to Give Power & Precision
Volvo machines are 10-15% more fuel efficient, they comply with CEV IV emission norms, and can run on alternative eco-friendly fuels such as biodiesel. We lay strong emphasis on operator training for efficient use of every machine that we sell, avers Dimitrov

Read more ...

Tata Hitachi India: Developing Indigenous High-Tech Machines
To serve the Indian infra development sector more industriously, we will continue to undertake extensive R&D and introduce machines with high-tech features, cost-effective solutions, high performance, and fuel efficiency, avers Sandeep Singh, Managing

Read more ...

L&T: Industry Leading Initiatives & Achievements
Arvind K Garg, Senior Vice President and Head, L&T Construction & Mining Machinery, enumerates the technologies and products introduced by Komatsu and L&T, the company’s extensive customer service programs, and proactive skill development initiatives which

Read more ...

ACE: Electrifying the Industry
Sorab Agarwal, Executive Director, informs that the company is set to become India’s first ‘swadeshi’ manufacturer of electric construction equipment with the launch of a fully electric mobile crane, whose technology has been developed indigenously at their

Read more ...

Terex: Strengthening Foothold Across India
Jaideep Shekhar, Managing Director, Asia & EMEAR, informs that the company will continue to strengthen its foothold in the Indian market by bringing in new technologies, expanding its product portfolio, and entering new construction territories. Its aim is to

Read more ...

Schwing Stetter India: Formulating Plans to Adapt to Demand Trends
V.G.Sakthikumar, Managing Director, informs that since sustainability is an integral part of the company, they are pursuing collaborations and R&D to bring innovative solutions, increase usage of green energy in its facilities, and reduce carbon

Read more ...

Escorts Kubota: Prioritizing Customer Benefits
Sanjeev Bajaj, Chief Executive, Escorts Kubota Limited, is confident that 2023-24 will be a great year for the CE business and demand may be more than the current capacity, largely led by domestic consumption due to the infra push by the Government before the

Read more ...

Puzzolana Group: Increasing Operational Efficiencies
Abhijeet Pai, President, informs that the company’s wide ranging value-added services for its customers has positioned it as a total solution provider in the Crushing & Screening Industry. The focus at bauma this year will be on M-sand, aggregates, railway

Read more ...

Sany India: In Sync With Changing Trends
Dheeraj Panda, Chief Operating Officer - Sales, Marketing & Customer Support, Sany India, informs that the company has taken a significant step forward towards sustainability with its B-V biodiesel machines, and is also testing electric technologies for

Read more ...

CRCHI: Making Tunnel Construction Smarter & Safer
CRCHI is positioned in world markets as a large enterprise with a strong focus on research, design, and manufacturing of customized underground engineering and rail transit equipment, informs Song Shuang, Vice Managing Director, Overseas

Read more ...