Construction activity in the infrastructure space got a boost after the BJP government clearly spelt out its pro-infrastructure intent. The launch of a host of initiatives by the government also helped to step up activity to a large extent. Sectors such as roads, ports and power reported a surge in award of projects. Several languishing projects were freed from encumbrances and construction work on these revived. Nonetheless, post-award delays continue to hamper construction activity, especially in ports and roads.
Indian Infrastructure provides an update of key developments in the construction sector in the last 12-18 months…
Roads
The road sector saw significant improvement in terms of both award and completion of projects under the National Highways Development Programme. During April-November 2015, the National Highways Authority of India (NHAI) awarded 44 projects covering 2,650 km worth Rs 375 billion. Some of the big-ticket awards include the Eastern Peripheral Expressway, four-laning of the Udhampur-Ramban and Ramban-Banihal sections, eight-laning of the Mukarba Chowk-Panipat section and four-
laning of the Amravati-Chikli section. About 1,185 km of national highways was constructed during April-November 2015. This translates into a construction rate of 4.93 km per day.
In January 2016, the government awarded the construction operation and maintenance of the Zojila Tunnel and development of Package I of the Delhi-Meerut Expressway project. At the state level, the key project awards include Phase III of the Barapullah elevated road project, a few contracts under the Second Tamil Nadu Road Sector Project, and Section VII of the Ranchi Ring Road project.
Power
The capacity addition for the power sector was driven mainly by coal-based power projects. As of November 2015, the total thermal-based generation capacity stands at over 196 GW. Of this, the central sector’s share stands at about 30 per cent and that of the private sector at 37 per cent. During 2014-15, around 19.3 GW of coal-based capacity was added, as against 15.1 GW in 2013-14. The key projects commissioned during the year include the 3,960 MW Sasan ultra mega power project (UMPP), 1,200 MW Tamnar expansion project and the 1,320 MW Nigrie project.
Hydropower capacity addition in 2014-15 was 736 MW, or just 3 per cent of the total capacity addition. A number of big-ticket projects are either stalled or delayed, owing to various reasons. Hydropower projects commissioned in 2014-15 include NTPC Limited’s maiden hydro project at Koldam, and the Parbati III and Rampur projects of NHPC Limited and SJVN Limited respectively. However, no new UMPPs were awarded in the past year. On the one hand, the bidding process for the Bedabahal and Cheyyur UMPPs was scrapped and on the other, Reliance Power pulled out of the Tilaiya UMPP and offered to sell back the Sasan UMPP. The only major positive development here was the notification of draft standard bidding documents for domestic coal block-based UMPPs.
Ports
According to India Infrastructure Research, between March 2014 and December 2015, a total of 18 projects were completed at major ports. Together, these projects have added a total capacity of about 61 million tonnes (mt) to major ports. Since December 2014, a total of 13 projects have been awarded at major ports. These projects are likely to add a capacity of at least 97 mt at an estimated cost of Rs 172 billion. The fourth container terminal at the Jawaharlal Nehru Port Trust entails the highest investment of Rs 79.15 billion, followed by the Rs 35 billion floating storage and regasification unit project in Kolkata.
The sector was less active with respect to the development of non-major ports. Limited movement was seen on various fronts including commissioning of operations, expansion of facilities on existing ports and development of greenfield ports. One of the most noteworthy developments was the award of the project entailing construction and operation of the Vizhinjam international seaport in July 2015. In August 2015, Gujarat Pipavav Port Limited commenced operations of its roll-on roll-off facility.
Railways
In the railway sector, as of April 2015, there were 1,492 sanctioned works for construction of road overbridges and road underbridges. Out of these, work has been completed on 184 rail overbridges (RoBs)/rail underbridges (RuBs) in terms of both the Indian Railways portions as well as state government portions. In addition, the IR portion has been completed in 150 bridges and is currently ongoing for 175 bridges. Work on the remaining 983 RoBs/RuBs, including 39 RoBs on national highways to be constructed by NHAI, is at different stages of planning. A 17 km broad gauge railway line between Gandhidham and Tuna Tekra port and a broad gauge railway line on the Lumding-Silchar section in Assam have been commissioned.
Up to November 2015, 112 new trains and 15 extensions of trains and five increases in frequency had been implemented as per the plans and proposals of the Railway Budget 2014-15. In November 2015, the Ministry of Railways awarded two contracts. One was to GE Global Sourcing India Private Limited for setting up a diesel locomotive factory at Marhowra, Bihar, and the other, to Alstom Manufacturing India Limited for setting up an electric locomotive factory at Madhepura, Bihar. Fresh request for qualification applications have been called for the Rail Coach Factory at Kanchrapara. A joint venture (JV) of Hindustan Construction Company and Coastal Projects Limited has secured a construction contract worth Rs 7.85 billion for the Jiribam-Tupul-Imphal new broad gauge railway line project. The JV will construct a 9.5 km long tunnel between Tupul and Imphal.
There are 458 projects worth over Rs 1.19 trillion in the tracks segment. The largest number of projects (291) pertain to new line works. Together, the total cost of these projects is over Rs 270 billion. Of the total number of projects, 88 projects were proposed in the Railway Budget 2015-16, of which 21 have received sanctions from the cabinet. All the sanctioned projects pertain to doubling works and are worth over Rs 143 billion.
Others
Other segments like urban transport, water and sanitation, and airports recorded modest progress on the execution front. Since June 2014, about 53 km has been added to the currently operational urban rail network. These include the commencement of operations on sections of the Delhi Metro, Mumbai Metro Line 1, Pink Line of the Jaipur Metro project, and the Chennai Metro (part of Phase I). As in the past, construction activity failed to pick up in the airport sector. Meanwhile, the launch of big-ticket programmes such as Swachh Bharat, Atal Mission for Rejuvenation and Urban Transformation and Namami Gange is expected to revive activity in the water and sanitation segment.
