The increased investments in infrastructure development have transformed India into one of the fastest growing markets for tunnel construction. The growth in tunnelling activity is driven by a robust project pipeline in the urban rail, hydropower, railway, roads and highways, and water supply and sewerage sectors. The scope of tunnel projects is also expanding due to growing urbanisation and rising demand for better infrastructure.
Indian Infrastructure takes a look at the current market size of the tunnelling industry, notable trends and developments, challenges and the future outlook…
Current market size
Among the tunnel projects tracked by India Infrastructure Research, 1,648 tunnels spanning a length of over 3,568 km are at various stages of implementation – awarded, under construction and completed. Of the total number of tunnels analysed, 78 per cent have been completed, 20 per cent are under construction and 2 per cent have been recently awarded. In terms of tunnel length, around 60 per cent has been completed, whereas construction work is under way for 39 per cent tunnel length and the remaining 1 per cent has been recently awarded.
A sector-wise analysis indicates that the hydropower segment accounts for over 40 per cent of the total tunnel length, followed by the railway and irrigation sectors at 20 per cent and 19 per cent respectively. State-wise, Maharashtra accounts for the highest share in the total upcoming length at 857.64 km, followed by Arunachal Pradesh at 396.69 km and Jammu & Kashmir at 205.17 km. Meanwhile, the top 10 states account for an 85 per cent share approximately in the upcoming tunnel length.
Trends shaping the tunnelling segment
Substantial increase in the size of tunnel projects
Of late, longer and larger tunnels are being developed. Although such projects are still few in number, developers have started planning larger-sized projects as they gain confidence in tunnel construction. Some of the projects involving the construction of long tunnels are the Kaleshwaram irrigation project (183.94 km), the Rishikesh-Karanprayag new rail line (105.47 km), the Jammu-Udhampur-Katra-Qazigund-Baramulla rail line (103 km), the Krishna (Satpewadi)-Nira (Somanathali) link canal (Part IV of the Upper Krishna-Bhima intra-state link project) (95.4 km) and the Jiribam-Tupul-Imphal railway line (81.88 km). etc.
DBM continues to be the dominant mode of tunnelling, especially in hilly terrain
With respect to the method/technique of tunnel construction, the drill- and -blast method (DBM) continues to be the dominant mode of tunnelling, especially in the Himalayan region and the Western Ghats. Among the projects tracked by India Infrastructure Research, tunnels spanning a length of around 1,127 km have either been awarded, are under construction or have been constructed using DBM. Sector-wise, hydropower continues to account for the largest share in the DBM market in the country. A total of 323 tunnels spanning a length of more than 680 km have been constructed (awarded, ongoing and completed tunnels) using DBM. DBM has been significantly deployed in the railway sector as well.
TBM and NATM gain prominence; micro-tunnelling witnesses increasing acceptance
Mechanised/Advanced tunnelling techniques such as tunnel boring machines (TBMs) are also being used extensively for tunnelling activities in congested urban areas. Of the analysed tunnel length, TBMs account for a share of about 23 per cent. Sector-wise, TBMs have predominantly been deployed for the construction of tunnels in the metro rail sector. In the irrigation and water supply sectors, TBMs have started replacing DBMs. So far, tunnels spanning a length of around 144 km and 100 km are being constructed or are under construction using TBMs. The main reasons for the use of TBMs in the water supply sector in urban areas are heavy traffic movement, congestion and space constraints. Other than TBMs, the New Austrian Tunnelling Method (NATM) has gained prominence over the years. Further, advanced NATM techniques have been deployed for a significant tunnel length in the railway and road sectors.
Another method of tunnelling that has been witnessing increasing acceptance is micro-tunnelling or the trenchless construction method. It is used to install pipelines beneath highways, railways, runways, harbours, rivers and environmentally sensitive areas. Micro-tunnelling is particularly used in the construction of sewerage tunnels. So far, tunnels spanning a length of around 60 km have been constructed using this technique.
Tunnel market dominated by a few large players
The Indian tunnelling market is dominated by the presence of a few big players that hold an 80 per cent market share. Most of the contractors are present in multiple sectors. However, some contractors serve only specific segments. Top contractors across sectors include the Hindustan Construction Company, Larsen & Toubro, Afcons Infrastructure Limited, Patel Engineering, and Gammon India.
Increasing size of the tunnel equipment market
Increasing investments in tunnel construction have resulted in high growth in the tunnel equipment market as well. However, a significant portion of the country’s tunnelling equipment requirement continues to be met through imports. Country-wise, China continues to dominate the import of tunnelling machinery. Its share in the total imports of tunnelling machinery increased from 47.27 per cent in 2018-19 to 96.44 per cent in 2019-20.
One of the notable trends witnessed in the tunnel market is renting equipment. Contractors, depending on the pipeline of projects, geology and cost effectiveness of refurbishing the existing machinery, have been opting for rented equipment, as many projects require different machines for short periods of time. Some of the companies that have forayed into the organised rental sector are Quippo (owned by Srei Infrastructure), Gmmco (CK Birla Group) and the Sany Group. Germany-based Herrenknecht provides services for the installation of TBMs, rental equipment, etc.
Rise in demand for sophisticated machinery and advanced materials
The quality of construction material used in tunnelling has evolved over the years. The growing complexity of tunnel construction in the Himalayan and peninsular regions has necessitated the use of new and advanced materials. New materials are also being deployed to improve the durability and strength of tunnels. Steel fibre-reinforced shotcrete, safer emulsion-based explosives, geosynthetics such as 5D steel fibres (for increased tensile strength), mineral admixtures, geotextile membranes, steel anchors and self-drilling rock bolts are some of the key advanced materials being used.
Pain points
The tunnelling sector in the country continues to face several issues and challenges. Issues arising from geological complexities and surprises, and inadequate investigations continue to hamper the pace of tunnel construction. In addition, inadequate investigation of ground and soil conditions may lead to the failure of tunnelling projects.
Deficiency in contract documents and inadequate contracting practices also pose a challenge. The contracts are drafted on age-old norms, and leave room for ambiguity between the implementing agency and contractors. Other issues faced by tunnelling contractors include shortage of skilled manpower for handling sophisticated tunnelling equipment; lack of safety in tunnel construction and maintenance; and undefined methodologies for working out rates for extra items and deviations in the design or construction requirements.
Outlook amidst Covid-19
The Covid-19 pandemic has had a significant impact on tunnelling activity. The pandemic-induced lockdown, which was first imposed on March 25, 2020, brought construction activities for almost all ongoing tunnel projects to a sudden halt. While construction works were resumed in the second quarter of 2020-21, the new waves of coronavirus, fresh lockdowns and increased restrictions could have a bearing on the pace of tunnel construction.
Nevertheless, the overall outlook for tunnel development in the country remains promising. According to India Infrastructure Research, the tunnelling segment offers a strong pipeline of 1,236 tunnels, spanning a length of over 4,107 km. These projects are at various stages of development – planned, under bidding, awarded and ongoing. Over the next two to three years, the tunnelling sector will offer multifold opportunities across sectors. This holds immense promise for engineering, procurement and construction contractors, consultants, technology and equipment providers, construction material supplies, etc. over the long term.