Competitive Landscape

Products, projects and order book of key players

According to NITI Aayog’s concept paper on Draft Model Public-Private Partnership Policy Guidelines in Integrated Micro Irrigation in India, the non-availability of government funds is the key reason to push for private investment in micro-irrigation. In particular, of India’s 65 million hectares under irrigation coverage, only 15 per cent is under micro-irrigation such as drip and sprinkler. With the government target of achieving 0.5 million hectares per annum coverage under micro irrigation with a budget of Rs 10 billion under the PradhanMantriKrishiSinchayeeYojana (PMKSY), it will be nearly impossible to reach the overall micro-irrigation potential in the country.

Also, government policies place limited emphasis on post-construction operations and maintenance (O&M) and, as a result, the overall life and efficiency of the irrigation system deteriorates. Hence, private investment in the irrigation sector becomes imperative.

Indian Infrastructure takes a look at the offerings, major projects executed and order book of key players in the irrigation sector…

Jain Irrigation Systems Limited

One of the leading micro-irrigation companies worldwide, Jain Irrigation Systems Limited (JISL) manufactures a full range of precision-irrigation products. It works across a number of verticals including polyvinyl chloride (PVC) pipes, high density polyethylene (HDPE) pipes, plastic sheets and agro-processed products.

One of the key projects executed by the company is the Ramthal-Marol integrated micro-irrigation project in Karnataka. Acclaimed to be the world’s largest such project, it has a water saving potential of up to 50 per cent, and has benefited more than 7,000 farmers over a 30,381 acre command area comprising 35 villages. The scope of work for JISL involved survey, investigation, planning, designing, supply and execution of the distribution system using a HDPE and PVC pipe network; formation of water users cooperative societies in select blocks; installation of on-farm fully automated micro-irrigation systems in the entire command area; and two years’ maintenance after commissioning and training and capacity building of farmers. Besides, the company is working on the Singatalur lift irrigation scheme (LIS) which is based on the concept of integrated lift-cum-drip irrigation. The project has been awarded to JISL on a turnkey basis and the scope of work includes providing a drip irrigation system to 31,547 acres (12,767 hectares) for more than 10,000 farmers including O&M of the project for a period of five years.

Larsen & Toubro

Under its brand LTLK, Larsen & Toubro (L&T) manufactures electric starters and accessories, and offers a range of agricultural starters, cables and capacitors for agriculture applications. The LTLK range offers products that operate submersible/monobloc pumps. The various agricultural electrical products that are being offered by L&T include electrical starting solutions, submersible pumps, monobloc pumps and domestic pumps.

One of the most prestigious projects that the company has worked on is the integrated Kaleshwaram irrigation project in Telangana. The project created an irrigation potential of more than 1.5 million hectares and involved an investment of Rs 801.9 billion. L&T executed the project along with Megha Engineering and Infrastructure Limited (MEIL) (electromechanical works) and Gayatri Projects Limited (construction of a reservoir of 50,000 million cubic feet). The project has been designed to irrigate 4.5 million acres for two crops in a year, meeting 70 per cent of the drinking water requirement of the state. Another important project executed by L&T is the Indira Sagar project, Unit II (Phases I and II) (0 km to 142 km) in Madhya Pradesh. With a target irrigation potential of 62.2 thousand hectares, the project involved an investment of Rs 16.08 billion.

With respect to the future plans of the company, L&T aims to double its revenue from the water segment (effluent treatment projects) to $4 billion in the next three-four years. The government-sponsored central programmes and schemes in the irrigation sector are expected to be one of the major growth drivers of the increase in revenue.

Megha Engineering and Infrastructure Limited

MEIL’s areas of expertise in irrigation projects include investigation, design, engineering and construction of dams, spillways, reservoirs and canals including distribution systems; and investigation, design and execution of minor and major lift irrigation projects, micro-irrigation projects and piped irrigation canal systems.

The Pattiseema project in Andhra Pradesh, one of the first river-linking projects in the country, connecting the Godavari and Krishna rivers has been completed by MEIL in record time of one year. The project is designed to lift 80 trillion cubic feet of flood water in a span of 110 flood days between July and October. It has 24 motors and 24 pumps with a combined capacity to discharge 8,500 cubic feet per second of water. Meanwhile, the Pattiseema project is the largest project executed in Asia and the first such project completed in India. Other key projects executed by MEIL (in collaboration with other contractors) are the Saurashtra Narmada Avtaran Irrigation Yojana (Phases I and II) with an irrigation potential of 0.41 million hectares and the Handri-NeevaSujalaSravanthi project (Phases I and II) with a combined irrigation potential of 1 million hectares. MEIL’s other landmark projects include the Pranahita-Chevella LIS, Telangana; the Narmada KshipraSimhastha link project, Madhya Pradesh; and the Khargone LIS, Madhya Pradesh.

Nagarjuna Construction Company Limited

Nagarjuna Construction Company [NCC] Limited’s areas of expertise in irrigation projects include dams and reservoirs, canals, irrigation tunnels, barrages, spillways and aqueducts. The company’s key clients include SardarSarovar Narmada Nigam Limited, and the water resources department of the Bihar, Chhattisgarh and Andhra Pradesh governments.

Key projects completed by NCC are the Gandak canal project, Bihar (Rs 5.43 billion); the SardarSarovar Narmada Nigam project, Gujarat (Rs 4.54 billion), and projects for the Water Resources Department, Birpur, Bihar (Rs 1.53 billion). Besides, the company is currently executing the Palamuru-Rangareddy LIS, Telangana (Rs 13.78 billion); the Rajolibanda diversion scheme, Andhra Pradesh (Rs 8.84 billion); the Baswapur reservoir project, Telangana (Rs 5.92 billion); and Packages 43 and 44 of the Mid Pennar South Canal modernisation project (Rs 4.41 billion) (Gujarat).

Over the past five fiscal years (2015-16 to 2019-20), NCC’s revenues from the irrigation sector increased at a compound annual growth rate of 5.56 per cent, from Rs 2.4 billion to Rs 2.98 billion. However, the company registered the highest revenue from the irrigation sector during 2018-19 – Rs 4.31 billion. Meanwhile, as of March 31, 2020, NCC’s order book stood at Rs 265.72 billion. Of this, irrigation projects accounted for a share of 8 per cent – Rs 20.54 billion.

The Indian Hume Pipe Company Limited

The company is considered to be a pioneer in the water supply industry. Apart from the drainage/sewerage, power and manufacturing segments, the Indian Hume Pipe [IHP] Company Limited is in the business of executing turnkey projects for the supply of drinking water and irrigation water. Key products offered by IHP are prestressed concrete (PSC) pipes, prestressed concrete cylinder (PCC) pipes, bar wrapped steel cylinder pipes, steel pipes, reinforced cement concrete (RCC) pipes and penstock pipes.

IHP has been working on a number of water supply projects. Chief among these is the Gosikhurd irrigation project. Estimated to entail an investment of Rs 184.95 billion, the project is expected to create an irrigation potential of 0.25 million hectares. IHP is implementing the project along with NBCC (India) Limited. Another important project being implemented by IHP is the Pauni LIS in Maharashtra. The scope of work for IHP involves the supply of 600 to 1,400 mm diameter PCC pipes for 15.74 km, 63 to 315 mm diameter PVC pipes for 59.02 km, 350 to 600 mm diameter ductile iron pipes for 9.63 km, and the construction of pumphouse, delivery chambers, etc. along with allied works. The contract value is Rs 541.43 million.

The Pulakurthy LIS in Andhra Pradesh is another key project being implemented by IHP. Consisting of an intake channel, a jack well-cum-pumphouse, a stainless steel tank, electromechanical works, 1,900 mm diameter PSC pipes, 1,900 mm diameter mild steel pipes and 500 mm diameter RCC P2 pipes, IHP is implementing the project in joint venture with MEIL. The value of IHP’s work is Rs 886.36 billion.

KEC International Limited

KEC’s areas of expertise in irrigation projects include conducting surveys, constructing field channels and field drains; land levelling and shaping; constructing aqueducts and all incline concrete structures; and undertaking drip irrigation projects.

KEC forayed into the water business in 2011. The Water Resource Department of Madhya Pradesh awarded the contract for the renovation, repair and remodelling of the canal under the Urmil tank project in Chattarpur district of Madhya Pradesh to KEC. The contract value of the project is Rs 310 million. Following this, in November 2011, KEC secured three orders for the construction of canals for irrigation projects in the states of Gujarat and Madhya Pradesh for a contract value of Rs 980 million.

KEC had secured six contracts for the construction of canals in January 2012. Of these contracts, five were awarded by the Madhya Pradesh Water Resources Department for the construction of canals and one was awarded by the West Bengal Irrigation and Waterways Department for flood protection works. The cumulative contract cost is Rs 1,230 million. The Water Resources Department of Madhya Pradesh awarded another two projects to KEC in July 2013. The scope of work in the first order involves the construction of a concrete dam under the Pench diversion project at Chourai in Chhindwara district and the second order involves canal construction at Rewa. The contract cost is Rs 990 million and Rs 350 million respectively.

As of March 31, 2020, KEC’s order book stood at Rs 205.03 billion. Of this, civil infrastructure (including irrigation) accounted for a share of 13 per cent. The order book for civil infrastructure (including irrigation) increased from Rs 4.87 billion in 2018-19 to Rs 26.65 billion in 2019-20.

Amrutha Constructions Private Limited

Amrutha Constructions Private Limited operates across a number of infrastructure sectors. In particular, the company has expertise in the construction of minor irrigation tanks, barrages, bridge-cum-barrages, canals aqueducts, LISs, etc. Government agencies for which the company has primarily worked are Karnataka NeeravariNigama Limited, Krishna BhagyaJala Nigam Limited, VisvesvarayaJala Nigam Limited and Cauvery NeeravariNigama Limited.

One of the key projects executed by Amrutha Constructions is the modernisation of the canal system of the Bhadra reservoir project in Karnataka. Involving an investment of Rs 13.24 billion, the project created an irrigation potential of 0.18 million hectares. The Krishnarajasagara irrigation project in Karnataka is another important project executed by Amrutha Constructions. It created an irrigation potential of 10,780 hectares at a cost of Rs 3.28 billion and was implemented in partnership with the joint venture of GVV Constructions and SadguruInfratech Private Limited.

Hindustan Construction Company Limited

Hindustan Construction Company [HCC] Limited’s expertise in the irrigation sector includes dams, barrages, networks of major/ minor canals and lift irrigation projects. The key projects executed by HCC in the past six-eight years are the JCR Devadula LIS, Phases I and II, Telangana (2013 and 2016); and the right main canal of the Polavaram irrigation project, Andhra Pradesh (2016).

HCC is currently working on some of the most prestigious irrigation projects in the country. It is executing the Dr B.R. AmbedkarPranahitaChevellaSujalaSravanthi project along with MEIL and IL&FS Engineering and Construction Company Limited. The project is estimated to cost Rs 51.5 billion and will create an irrigation potential of 0.45 million hectares upon completion. Besides, HCC is also working on the Parwan irrigation-cum-drinking water supply scheme in joint venture with HoistoStructurals and Equipment Private Limited. The project will create an irrigation potential of 1.22 million hectares and is expected to cost around Rs 64 billion.

As of March 31, 2020, HCC’s total order backlog stood at Rs 161.42 billion, of which water accounted for a share of 6 per cent (Rs 9.64 billion). The share of the water sector in the total order book has been declining in the past five years. It declined from 15 per cent in 2015-16 to 8 per cent in 2017-18 and to 6 per cent in 2019-20.

The road ahead

Given the untapped potential, there exist ample opportunities for private players in the irrigation sector. The sector is expected to offer huge business opportunities to various stakeholders such as private project developers and engineering, procurement and construction contractors on the back of the government’s flagship initiatives such as the PMKSY, the Interlinking of Rivers Programme, and the Command Area Development and Water Management Programme.

The National Infrastructure Pipeline too has projected a capital expenditure to the tune of Rs 8.94 trillion for the irrigation sector during the period 2019-20 to 2024-25. Besides, the government aims to increase the command area under irrigation, increase water productivity (volume of water for one unit of agricultural produce) and expand the coverage of micro-irrigation. These initiatives bode well for private players in the sector.

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