Sandeep Garg, MD & CEO, Welspun Enterprises
Contractors and builders can benefit on the execution front by better project management skills and technologies for efficient utilization of resources; in fact, most of the strong contenders have invested in technologies appropriate for their level of operations.
Scope & Challenges
There is tremendous scope and potential for good quality infrastructure construction companies with a sound financial background. There are plans for investment of ₹50 lakh crore (USD 725 billion) in the infrastructure sector in the next 5 years. In order to meet such targets a budget outlay of approx. 6 lakh crores has been planned in FY 2019-20, and especially in sectors like Roads, Railways & Waterways, which are going to lead the growth of the infrastructure development sector.
The major challenges being faced are delays in land acquisition, clearances due to involvement of various agencies, litigations, and lack of capacity (technical as well as financial) of construction companies. Most of the infrastructure development is being done by the government under its procurement policies, which are based on the lowest price bidder concept; this is leading to challenges in quick implementation and quality.
Efficiency with Technology
In our experience, the challenges of infrastructure projects are more due to local issues than technological. It may be true that some of the contractors and builders can benefit on execution front by better project management skills and technologies for efficient utilization of resources; however, most of the strong contenders have invested in technologies appropriate for their level of operations.
Other factors that are limiting absorption of technologies in execution of infrastructure projects are the perceived low-cost manpower availability and lack of continuity of work for the industry due to changes in spend by the government.
Welspun is an Indian-origin multinational company with best-in-class work methodologies across the globe. We continuously invest in technologies that will enable us to deliver projects ahead of time while maintaining international quality standards: a case-in-point is the 11-month early completion of our first Hybrid Annuity Model (HAM) road project - the Delhi-Meerut Expressway – Phase I.
We believe that AI, machine control and IOT are powerful tools which can improve efficiency and quality of the infrastructure built up. It is our endeavor to deploy these technologies to act as a differentiator and are engaged with companies to develop options for both monitoring and quality control, using some of these advanced technologies.
Order Book
The financial year 2018-19 had been a successful year with an addition to our roads HAM portfolio of ~ ₹3460 cr – this has taken our overall HAM portfolio to ₹8,500 crore. We have 6 HAM road projects under execution, aggregating to an unexecuted EPC order book of ₹5,200 crore as of March 2019. In addition, we achieved COD of our first HAM project - the Delhi-Meerut Expressway – Phase I, in June 2018, 11 months ahead of schedule for which the first annuity payment has already been received from NHAI.
We have also achieved Financial Closure for all the HAM projects awarded to us. All our projects for which the Authority has declared the Appointed Date are progressing ahead of the scheduled completion date.
We have diversified into water projects and submitted a bid for a large Sewage Treatment Project (STP), which is under evaluation. Going forward, we believe that the water segment will become as substantial as our current road portfolio.
There is tremendous scope and potential for good quality infrastructure construction companies with a sound financial background. There are plans for investment of ₹50 lakh crore (USD 725 billion) in the infrastructure sector in the next 5 years. In order to meet such targets a budget outlay of approx. 6 lakh crores has been planned in FY 2019-20, and especially in sectors like Roads, Railways & Waterways, which are going to lead the growth of the infrastructure development sector.
The major challenges being faced are delays in land acquisition, clearances due to involvement of various agencies, litigations, and lack of capacity (technical as well as financial) of construction companies. Most of the infrastructure development is being done by the government under its procurement policies, which are based on the lowest price bidder concept; this is leading to challenges in quick implementation and quality.
Efficiency with Technology
In our experience, the challenges of infrastructure projects are more due to local issues than technological. It may be true that some of the contractors and builders can benefit on execution front by better project management skills and technologies for efficient utilization of resources; however, most of the strong contenders have invested in technologies appropriate for their level of operations.
Other factors that are limiting absorption of technologies in execution of infrastructure projects are the perceived low-cost manpower availability and lack of continuity of work for the industry due to changes in spend by the government.
Welspun is an Indian-origin multinational company with best-in-class work methodologies across the globe. We continuously invest in technologies that will enable us to deliver projects ahead of time while maintaining international quality standards: a case-in-point is the 11-month early completion of our first Hybrid Annuity Model (HAM) road project - the Delhi-Meerut Expressway – Phase I.
We believe that AI, machine control and IOT are powerful tools which can improve efficiency and quality of the infrastructure built up. It is our endeavor to deploy these technologies to act as a differentiator and are engaged with companies to develop options for both monitoring and quality control, using some of these advanced technologies.
Order Book
The financial year 2018-19 had been a successful year with an addition to our roads HAM portfolio of ~ ₹3460 cr – this has taken our overall HAM portfolio to ₹8,500 crore. We have 6 HAM road projects under execution, aggregating to an unexecuted EPC order book of ₹5,200 crore as of March 2019. In addition, we achieved COD of our first HAM project - the Delhi-Meerut Expressway – Phase I, in June 2018, 11 months ahead of schedule for which the first annuity payment has already been received from NHAI.
We have also achieved Financial Closure for all the HAM projects awarded to us. All our projects for which the Authority has declared the Appointed Date are progressing ahead of the scheduled completion date.
We have diversified into water projects and submitted a bid for a large Sewage Treatment Project (STP), which is under evaluation. Going forward, we believe that the water segment will become as substantial as our current road portfolio.
NBM&CW July 2019
