The tunnelling sector in India is currently served by both domestic and foreign players. Most of the contractors have a presence in all key tunnelling segments – hydropower, railways, metro rail, roads and highways, irrigation, and water and sewerage. However, some contractors operate specifically in only certain segments.
The most commonly deployed model of project execution has been through the creation of joint ventures (JV). India Infrastructure Research analysed a total of 705 tunnels spanning 1,635 km at various stages of project progress. It has been observed that 46.13 per cent of the projects analysed are being implemented under the JV model.
Further, the analysis highlights that the tunnelling industry continues to be dominated by a few key contractors. For instance, of the tunnels analysed, 47.3 per cent of the total tunnel length has been or is currently being developed by 10 tunnel contractors. These contractors have 404 tunnel projects spanning 773 km at various stages of implementation. They include Hindustan Construction Company (HCC), Jaiprakash Associates Limited, Patel Engineering Limited, Larsen & Toubro (L&T), IRCON International Limited and Continental Construction Corporation Limited.
While tunnel construction in the country is primarily being undertaken by such domestic contractors, more recently, foreign players like Strabag and SEW Infrastructure Limited have also entered the market. Such players can be found operating in the road and highway, irrigation, and water and sewerage sectors through JVs with large domestic contractors. This trend is also catching on in the metro rail sector.
For railways, in terms of both the number and length of tunnels, the L&T-Afcons Infrastructure JV dominates the sector. Around 92 tunnels of over 83.6 km length have been constructed by the company. This is followed by the consortium of Aecom, Unity Infra, HCC and Coastal Projects Limited which has developed 46 tunnels spanning 54.5 km. Some of the other key players in railway tunnelling are IRCON International, SSNR Projects Private Limited, Continental Construction Corporation Limited and SEW Infrastructure Limited.
In the metro rail sector, the largest tunnel projects have been constructed under JVs between tunnel contractors. In terms of length, the L&T-SUCG Infrastructure JV dominates the metro tunnelling segment, with a project portfolio spanning 36.27 km in tunnel length. One of the biggest metro rail tunnel construction contract for the Delhi metro, Phase III – the Janakpuri West-Botanical Garden stretch, spanning a length of 23.8 km – has also being undertaken by L&T. Other key players in the sector are J. Kumar Infraprojects, ITD Cementation, the Afcons-Transtonnelstroy JV, Soma Enterprise and Pratibha Industries Limited. Foreign players such as Continental Holdings Corporation of China and OJSC Mosmetrostroy of Russia are also operating in this sector.
The road and highway tunnelling segment is also dominated by a few key contractors. In terms of number of projects, IL&FS Transportation Networks Limited is the market leader with a current portfolio of six tunnels (23.07 km) – five for the Kiratpur (Punjab)-Ner Chowk (Himachal Pradesh) section four-laning project and one main tunnel for the Chenani-Nashri project on the Jammu-Srinagar national highway. However, in terms of length of road tunnels, the Border Roads Organisation (BRO) leads the market with two tunnel projects spanning over 25.4 km. The BRO has been actively undertaking the development of strategic roads in the northern and north-eastern regions of the country, such as the Shinkunla pass tunnel and the Baralacha tunnel projects.
Meanwhile, the hydropower, irrigation, and water and sewerage sectors are all being led by one industry player – HCC. The company has undertaken the construction of 97 hydro tunnels spanning a total length of 186 km, seven water supply tunnels of 49.59 km, two irrigation tunnels of 103.39 km, and one sewerage tunnel of 2.6 km. Following HCC are other industry players such as Patel Engineering, Gammon India Limited and Jaiprakash Associates.
Tunnel construction in India thus continues to be dominated by a handful of construction companies. Being market leaders, these companies can benefit from the huge opportunities in the upcoming tunnelling projects, especially in the hydropower and metro rail sectors. However, tunnel contractors often bear significant monetary costs due to several project risks. For instance, project delays due to land acquisition and financial closure issues, natural disasters, poor tunnel designs, and unsafe working conditions often hamper project progress. Therefore, contractors need to undertake measures to mitigate such risks in tunnelling projects. Only then will they be able to reap the maximum gains from the upcoming opportunities.