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Title: Infrastructure Construction
Product features: 170 pages
Released On: Oct 2004

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Brief: The size of the construction industry in India is over $25 billion and it accounts for more than 6% of the GDP. It is also the largest employer in the country after the agriculture sector, employing almost 18 million people. This sector is witnessing sharp growth as a result of the large investments being made in roads, power and other infrastructure areas. The nodal agencies for each sector, NHAI, NTPC, NHPC and PGCIL have ambitious investment plans over the 10th and the 11th Five Year plans. Simultaneously, Indian firms are taking up more and more projects outside India.

In short, construction industry is beginning to play an important role in India’s development. If the government’s focus on improving infrastructure stays, then this industry’s importance is likely to only increase in future

The book focuses on the following sectors-

  • Power Generation (Thermal and Hydel)
  • Power Transmission
  • Oil & Gas (Pipelines and Refineries)

In compiling this product, the ET Intelligence Group team undertook a series of meetings with most of the large companies in this sector, interacted with funding agencies, some clients and so forth. The major problem encountered in compiling this book was that lack of reliable information. We have attempted to rely on the more credible sources.

 
CONTENTS: Infrastructure Construction

1. Executive Summary……………………………………………………………………………7    

2. Overview………………………………………………………………………………………..9    
Construction is one of the fastest growing sectors of the Indian economy. It is also the second largest employer in the country after agriculture.

3. Financing……………………………………………………………………………………...17    
Inadequate finance facilities from Indian banks and financial institutions have always been a complaint from the Indian construction contractors. The extent of finance, biased assessment of creditworthiness, excessive charges for bank guarantees, treatment of expired guarantees and excessive transaction costs have been resented by several Indian contractors since long.

4.Roads…………………………………………………………………………………………...25    
Roads are what have brought about the infrastructure revolution in India. It all started with the National Highways Development Programme financed by a cess on petrol and diesel. From there, financing of road projects have come a long way with the involvement of private players and the growing popularity of Built Operate and Transfer (BOT) Projects.

5.Power…………………………………………………………………………………………...41    
India has always been deficient of power. Large investments in generation capacity, thermal as well as hydel propose to remedy the situation by 2012. The bulk of new investment will be done by the public sector, primarily NTPC and NHPC. The Electricity Act-2003 is expected to encourage private sector investment in the area, particularly in captive generation.

6.Power Transmission…………………………………………………………………………...66    
This is one of the sectors in construction where Indian companies are world beaters. All the major players get a big chunk of business from overseas. With new projects of Power Grid coming up, the focus will now shift to the domestic market. Given the entry barriers, this industry is unlikely to witness large scale entry of new players as had happened in case of roads.

7.Hydrocarbons………………………………………………………………………………….76    
Large scale activity is going on all major fronts, be it refining, pipelines or LNG. Refining investments are in the form of brown-field expansions while new capacity is being built for LNG. India’s increasing hunger for energy will power this sector in foreseeable future.

8.Urban Infrastructure………………………………………………………………………….99    
Infrastructure in Indian cities leaves a lot to be desired. Whether it is the over utilized urban mass transit systems or the water supply and sewerage systems, the pressure on all the city level infrastructure amenities are hitting the limits. Lately more and more cities have developed awareness about the problem and are working at ways to improve the plight of the urban citizen.

9.Company Profiles…………………………………………………………………………….110    
There are very few large players in the Indian construction industry. However, the existing companies are now witnessing strong growth due to the large scale investment in infrastructure projects. Healthy order books and proposed investments will ensure growth in the future.

10.Construction Material……………………………………………………………………...134    
Growth of industries such as cement and steel depends upon the growth in other sectors. Both these sectors will display strong growth due to the ongoing activity in the construction industry. Some niche areas, such as steel pipes are directly dependent upon infrastructure projects.

11.Project Exports……………………………………………………………………………...154    
Indian companies have run up an enviable record in winning and executing projects in Middle-East, Africa and East-Asia. However, Indian companies still lack the scale to compete for big-ticket items with global majors. Strong growth from domestic business can help them achieve the critical mass.

12.International Companies…………………………………………………………………...164
Unlike in India, International companies are multi-billion dollar entities. Indian construction firms are quite small with only a handful having a turnover in excess of Rs 1,000 crore. Perhaps as the market matures, it will be more in line with the way infrastructure construction industry in developed countries with a handful of mid sized companies.

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