Dec 30, 2013-Jan 05, 2014 1

India Cements gets Centre nod for capacity expansion

VOLUME 2 l Issue No. 52 l December 30, 2013-January 05, 2014 l Price : Rs. 100An MMR, Braj Binani Group Publication

Slow investment, sluggish construction

The larger global and domestic economic downturn has subdued India’s real estate market, resulting in a sales slowdown as well as pressurized capital values across leading cities, according to CBRE’s recent research viewpoint, ‘India’s recent economic performance and the road ahead’.

The report also out l ines the present lacunae in the realty sector due to the ongoing policy stagnation hampering India’s economic growth and deve lopment . Anshuman Magazine, Chairman & MD, CBRE South Asia Pvt Ltd, said, “High inflation, tight monetary policy, and weak industrial growth are some of the key factors that have slowed down economic development, and potentially put foreign investor focus at risk of shifting to other emerging markets.

management, opening of key sectors to foreign direct investment and public-private partnership projects.

During the next s ix months, reforms are expected to be approved for opening up the banking sector to foreign competition and deepening corporate debt markets, which will promote investment and raise efficiency in the financial sector.

“Apart from a sales reduction in the commercial office and retail real estate spaces, buyer sentiment in housing markets too has largely remained cautious on the back of relatively high price points and sticky borrowing costs. As a result, investment has slowed across segments, resulting in stagnant construction activity. “

The office space segment also witnessed a demand decline during Q3 2013, as corporates focused on consolidating and downsizing their real estate portfolios, and/or relocating to peripheral markets.

While this has contributed to rental stability in most markets in recent months, subdued demand and high vacancy levels led to a steep decline in office space supply during the last quarter, weighing on future investment plans.

The clearance of the National Land Acquisition, Rehabilitation & Resettlement (Larr) Bill by Parliament is likely to make the process of land acquisition more expensive and time consuming.

In principle, the Bill is meant to promote transparency and clarity in land t i t l ing, while protecting landholders. Owing to rising costs, and associated risks, more developers are likely to opt for joint development projects going forward.

The government is sh i f t ing toward permitt ing more foreign investment in key sectors, such as multi-brand and single-brand retail, pension and broadcasting; while hiking limits for foreign investment in telecommunications, and insurance sectors; as well as setting up a committee to fast-track approvals for mega infrastructure projects.

T h e u p c o m i n g G e n e r a l Elections in April 2014 will hence prove to be a watershed event for India’s economic and investment rejuvenation. Specifically, from the standpoint of both the economy and the commercial real estate sector, reforms are required in terms of speedier clearance of stalled projects, liberalization of supply chain

Exit policy for highway projects hits fresh hurdle

The exit policy for highway projects announced in a bid to release the much-needed equity into the sector, has hit a fresh hurdle with the Department for Economic Affairs (Dea) saying the policy, which was being reworked by the Highways Ministry to make it more palatable to investors, doesn’t need any tweaking.

As per the policy by the National Highways Authority of India (NHAI), concessionaires could be substituted after approval from lenders and a new special purpose vehicle (SPV) would be formed to take over the project.

However, despite an initial burst of interest, no developer had come forward citing lack of clarity over passing of tax benefits, licenses, permits and so on from the old SPV to the new entity that would be formed when one developer exits the project and another step in.

The Highways Ministry had then worked on a fresh proposal suggesting that the policy be tweaked to say that there would be transfer of equity instead of a substitution of SPVs for NHAI sent to the Dea soon.

The Dea is now saying that the substitution is within the SPV itself, whereas as per the policy notified

there will be a substitution of SPVs. When a new SPV is formed, fresh licenses, permits, stamp duties and so on are required, that’s why it was suggested that it be changed to substitution of shareholders instead of an equity sale, said an official aware of the development, adding that the National Highways Authority of India is now drafting a reply to the Dea. Developers have steered clear of the sector since 2012-13, forcing the Highways Ministry to put on hold plans to build highways through the public private partnership (PPP) route where only two PPP projects have received bids.

After the policy was notified, deve lopers had in fo rmed the government that in its current form, it had failed to address the issue of unlocking of equity in healthy, operational projects that could release about Rs 6,000 crore of equity in older concessions as well as the potential of serious, long-term foreign direct investment into the road sector.

Officials in the Highways Ministry said they would try to resolve the matter with the Department for Economic Affairs and take a call on how to bring changes into the policy soon.

An expert appraisal committee under the Ministry of Environment has given nod to India Cements to double its capacity and set up a 40 mw power plant at one of its facilities in Tamil Nadu. The proposed expansion project will come up at Dalavoi in Ariyalur district.

According to a senior official of the company, the capacity addition would cater to Tamil Nadu and Kerala markets. “It will be a significant expansion in the two markets, where not much of the capacity addition is expected in future,” said the official.

It is expected to take about two years to complete the work. The

current capacity for clinker production in this facility is 1.24 million tons per annum and the company plans to add 1.53 million tons, taking total clinker production capacity to 2.77 million tons per annum. Cement (OPC/PPC) production capacity is 2.16 million tons and the company plans to add 2.55 million tons, taking the total cement production capacity to 4.71 million tons.

The proposed expansion wil l be carried out in an area of 25.09 hectares where the estimated cost of the project is Rs 810 crore, including Rs 39.6 crore and Rs 5.71 crore earmarked for the capital cost and recurring cost per annum towards

env i ronment po l lu t ion cont ro l measures.

India Cements, one of the country’s largest cement manufacturers, currently has a total capacity of 15.5 million tons. It has seven plants in Tamil Nadu and Andhra Pradesh and one in Rajasthan. The company is also planning to add 2x20 mw power plant in the facility.

The captive power plant will use coal/pet coke as fuel. The power requirement for the facility would be 41.4 mw, which will be met from the captive power plant and the Tamil Nadu Electricity Board, according to the company’s disclosure to the ministry.

Dec 30, 2013-Jan 05, 2014 2DOMESTIC

Property show by Credai-BANM held

in Navi Mumbai

Shree Cement trumps peers on lower costs

Credai -BANM organized i ts property exhibition jointly with the exhibition of Global Kokan. The Builders Association of Navi Mumbai property exhibition offered a wide choice to home seekers in Navi Mumbai.

The 14th show was held from December 14 to 17 on the sprawling grounds of 20,000 sq mtr at sector 19 at Sanpada. The inauguration was done by Sharad Pawar, Minister of Agriculture, Government of India. Others who attended the ceremony were Ganesh Naik, Guardian Minister, Thane; Sunil

Tatkare, Minister, Water Resources, Maharashtra; Udayji Samant, Minister of State, Urban Development, Maharashtra; Sanjeev Naik, MP, Thane; Sandeep Naik, MLA, Airoli and Sagar Naik, Mayor, Navi Mumbai.

There were more than 150 exhibitors who displayed their properties. There were over 212 stalls apart from one large pavilion of more than 600 sq mtr. Over 18 banks and financial institutions also participated.

The properties displayed in the exhibition were not just from Navi Mumbai, Panvel, Ulwe, Dronagiri

and Taloja but also from Karanjade, Badlapur, Karjat, Pen, Khopoli, Alibag, Pune and Nanded.

Mega projects like the international airport, Delhi Alibaug freight corridor, Sion-Panvel expressway expansion and Nhava Sheva Sewri link will have a positive impact on property market in the region.

Dharmendra Karia, Hon. Secretary, Credai-BANM said that because of NAINA lakhs of sq mtr land will be available for construction of houses and there will be scope for affordable homes in the NAINA area.

Nod for 2 more NIMZs in Karnataka

HCC wins `1,597-cr hydro project in U’khand

The Union Commerce Ministry has given in-principle approval for two more National Investment & Manufacturing Zones (NIMZs) in Karnataka. In addition to the one already cleared for Tumkur, new NIMZs are proposed for Bidar and Gulbarga.

Union Commerce Minister Anand Sharma said both the projects will be taken up and chief secretary will send a detailed proposal to the Centre. Tumkur NIMZ is standalone integrated township where for this project land will be state government’s share and

Hindustan Construction Company (HCC) has won Rs 1,597-crore contract from THDC India for construction of a hydro power project in Chamoli, Uttarakhand. The project to construct Vishnugad Pipalkoti hydro-electric power project in Chamoli district of Uttrakhand will be under the EPC (engineering, procurement, construction) mode for civil and hydro-mechanical works and is to be completed in 54 months.

Vishnugad Pipalkoti hydel power project is a 444 mw (4x111 mw) run-of-river scheme on Alaknanda river, which is a major tributary of river Ganga. HCC covers the entire spectrum of engineering, procurement and construction related activities for highly complex, large-scale integrated

the Central government will fund it. The Chennai-Bengaluru corridor

will be extended up to Chitradurga where the master plan work is almost complete and feasibility for phase-2 will be taken up shortly. For the BMIC project, a feasibility study has been commissioned.

The project will have innovative funding as planned by UK. “To take it forward, a joint steering committee will be set up after getting recommendation from both the state government. The committee will monitor the project,” said Sharma.

hydro power projects. HCC said it possesses diverse capabilities required for construction of al l components of a hydro power project like dams, barrages, powerhouses, tunnels, shafts and canals.

The company recently completed three hydel power projects in Jammu & Kashmir, including URI stage-2, Chutak HEP and Nimoo Bazgo HEP. It is currently executing eight hydro-electric power projects, including two in Himachal Pradesh, two in Bhutan and one each in Arunachal Pradesh, Jammu & Kashmir, Sikkim, Uttarakhand and West Bengal. THDC India Ltd (formerly Tehri Hydro Development Corporation Ltd) is jointly promoted by the Central and UP state government.

UltraTech-Jaypee `3,800-cr deal gets CCI nod

Tata Housing to develop luxury housing in Bengaluru

Aditya Birla Group firm UltraTech’s nearly Rs 3,800 crore deal with Jaypee Cement Corporation to acquire its facilities in Gujarat, has received approval of fair trade watchdog CCI that ruled the transaction.

As per the deal, UltraTech, a leading manufacturer of cement in India, will acquire Jaypee’s cement unit in Gujarat comprising an integrated cement plant at Sewagram, limestone reserves, captive power plant and mining leases, among others.

The Competition Commission of India (CCI) said it is of the opinion that the proposed combination is not

Tata Group rea l ty f i rm Tata Housing has bought 20 acres of land in Bengaluru from Alstom T&D India for Rs 120 crore to develop a luxury housing project at the site. Tata Housing is a subsidiary of Tata Sons, which holds 99.86 per cent stake in the realty firm which has 70 million sq ft of area under various stages of planning and execution, and an additional 19 million sq ft in the pipeline.

Ta t a H o u s i n g e n t e r e d a n agreement with Alstom T&D India to buy its manufacturing unit spread across 20 acres in Bengaluru for Rs 120 crore. Tata Housing spokesperson said that the company is looking at expanding its presence in the fast growing city of Bengaluru as part of long-term strategy.

Tata Hous ing sa id that the presence of IT/BPO companies in the city has created an active demand for commercial and resident ial

likely to have an appreciable adverse effect on competition in India. The Commission in its order has observed that ABG Cement and Lafarge India were likely to set up cement plants in Gujarat and Rajasthan respectively.

According to the CCI, “entry of new firms is generally considered to counterbalance any attempt by merging parties or their competitors to profit from potential reduction in competition brought about by the merger. The new entrant effectively discipl ines the exist ing market participants as size of the new entrant does matter in the markets

properties. The agreement with Alstom T&D India was a part of the expansion strategy of the company and is sub jec t to the mutua l satisfaction of terms, conditions and obligations mentioned in the agreement for sale.

Tata Housing has presence in Mumbai, Lonavala, Talegaon, Pune, Ahmedabad, Goa, Gurgaon,

Sudhir Krishna, Secretary, the Ministry of Urban Development, Government of India released a report prepared by Confederation of Indian Industry (CII) in partnership with Cisco on Smart Cities in Indian perspective at the National Conference on Smart & Intelligent Cities – Integrated Solutions for Inclusive & Sustainable Communities on December 13, 2013 in New Delhi. The report talks of the definition of a Smart City in contemporary context.

Krishna emphasized on the need to enhance the role of technology in e-governance that would improve quality of life and stimulate inclusivity and at the same time also focus on continuous innovation and adaptation of the same.

Ano the r imminen t a rea o f intervention he mentioned was revisiting the Model Agreements for PPP across Urban Infrastructure verticals – water supply, transportation and solid waste management, among others. Planned urbanization and integrated urban utilities, he said, were no longer optional or else the

characterized by few players,” the regulator said.

The CCI also observed from UltraTech’s submissions that it intends to introduce and utilize its processes and core competence to increase the capacity utilization of Jaypee’s assets, thereby increasing overall economic efficiency in production and quantity of cement in the market for grey cement. For the Jaypee Group, it will help pare a portion of its Rs 55,000 crore debt. The companies had approached CCI in October seeking the regulator’s clearance on the deal.

cost we would end up paying would be too high.

The conference was also addressed by Ajay S. Shr i ram, President Designate, CII, who focused upon the need for sustainable urbanization; Anil Menon, Co- Chair, CII National Committee on Urbanisation & Future Cities and President, Globalization and Smart Connected Communities, CISCO Inc highlighted the relevance of ICT in planned urbanization; M Lakshminarayan, Co- Chair, CII National Committee on Urbanisation & Future Cit ies and Managing Director & Country Manager, Harman International India Pvt Ltd argued that improved infrastructure could stimulate greater contribution of cities towards country’s GDP, and Nilaya Varma, Executive Partner - Accenture Management Consulting Limited, who in his keynote presentation set the theme of the conference by highlighting specific areas where government and industry can come together for designing Smart & Intelligent Cities in the country.

Chandigarh, Bengaluru, Chennai, Kolkata and Bhubaneswar. The company is now in the process of expanding footprints to other parts of India across tier-1 and -2 cities. It has ventured into foreign markets such as Maldives and is actively exploring other markets, including Sri Lanka and other South Asian countries.

Dec 30, 2013-Jan 05, 2014 3IN PERSON

‘Demand for luxury homes has dropped in Mumbai’

The real estate in India is highly fragmented, capital-intensive and cyclical in nature. How does it impact developers’ fraternity in such uncertain situations?

The real estate sector plays an important role in the Indian economy contributing around 6.5 per cent to GDP. Though the sector is highly fragmented and capital-intensive in nature, it is yet to receive the industry status. As the sector has close linkage with economy any adverse changes in the macroeconomics factor affect cash flows of the developer.

A typical real estate project has a gestation period of 3-4 years and any adverse change in the interim period can affect cash flows. As a developer how do you cope with such crisis?

As a developer we are now using a different business model, where we are setting up joint ventures with land owners since buying too much land can hurt. To hold power in a bad economy we are developing project building by building and selling one fully before starting on the next.

Tel l us about your pro jec ts developed and those in stages of completion. In all how much area are you developing?

We have completed 70 projects spanning over 15 million sq ft of built-up area. Currently we are developing 12 projects with approximately 10 million sq ft area.

In how many c i t ies are you executing projects?

There are about 12 cities across India where we are doing our

projects. By 2014-15, we propose to add a few more cities and also Mumbai suburbs.

As a prime developer what is your take on the slow rate of approvals, recent regulatory changes in key micro market Mumbai, declining demand, etc?

The real estate sector is currently facing challenges including high land cost, delay in approvals, liquidity issues both at buyers’ as well as developers’ levels, lack of infrastructure as well as skilled manpower. But in the Mumbai region absorption level has dropped for luxury residential segment which are high- priced and therefore keeping buyers away from the market. Nevertheless, Mumbai is facing housing shortage primarily in the mid-income range.

To hold power in a bad economy we are developing projects building by building and selling one fully before starting on the next, declares Sunil Mantri, Chairman, Mantri Realty

Investment trends in India

Hous ing demand remained largely stagnant across major urban markets in India during the first half of 2013. End-user perceptions of inflated housing prices, as well as high borrowing costs kept off home buyers during this period.

In fact, subdued demand levels even led to a price correction of around 10 per cent–15 per cent across most markets in India. Recent pol icy moves from the Central Bank—vis-à-vis the rise in repo rate as well as the 20:80 schemes—are expected to further dampen investor sentiments. With home loans having gone up now, home buyers are likely to continue to remain cautious and delay their purchase decisions further.

However, a silver lining seems to be the increasing interest of non-resident Indians (NRIs) in purchasing property to leverage the depreciating value of the rupee.

Key marketsDespite the prevailing demand

slowdown, residential supply in key markets across the country witnessed an increase in the first six months of 2013. As per CBRE’s latest report on the residential segment, India Residential Market View H1 2013, more than 65,000 units were launched across India’s leading cities in the first half of the year, as compared to about 48,000 units launched during the second half of 2012.

This demand/supply mismatch has contributed to an oversupply situation in most cities, leading to mixed sentiments on asset pricing across various cities. About 88 per cent of this supply was concentrated in the Delhi National Capital Region (NCR), Mumbai and Bengaluru markets—indicating their prominence as residential real estate investment destinations.

Not surprisingly, most of these new launches across India’s top cities came up in peripheral/suburban areas, and in the mid-end price segment—to cater to the rising demand for affordable housing.

Decline in office spaceOffice space absorption in the top

seven cities of the country declined by approximately 14 per cent q-o-q, registering around 6 million sq ft as compared to around 7 million sq ft in the previous quarter, according to the findings of CBRE’s latest report, India Office Market View Q3 2013.

Corpora te o f f ice occupiers remained cautious amid a subdued economic outlook—a trend which continued to inhibit office leasing activity across the country. Most leasing activity was observed in the small and medium-size format office spaces, with very few large scale transactions getting finalized; back-office space requirements were also constrained by cost pressures and delays in approvals.

Transaction activity was dominated by the NCR, Mumbai and Bengaluru, each recording more than a million sq ft of office space leasing during the quarter ending September.

Retailer demandIndia’s retail real estate segment

saw retailer demand strengthen across the country in the first half of 2013. The first six months of the year also saw global and domestic retailers continuing to open stores along prime high streets and malls.

Demand from international retailers rose steadily during this period,

Despite the prevailing demand slowdown, residential supply in

key markets across the country witnessed an increase in the first six

months of 2013

particularly in Mumbai and New Delhi. Relaxation of legislative norms governing FDI in India’s retail market has encouraged overseas retailers to set up shop. For the period January–June 2013, the Foreign Investment Promotion Board (FIPB) has cleared investment proposals worth Rs 800 crore for 18 global operators in single brand retail. Multi-brand retailers, however, are yet to make an entry.

Price weaknessAs far as housing investments

go, home buyers may consider the present period for investing in good housing properties. This might be the right time to take advantage of the price weakness in NCR markets, for instance.

Especially in the light of the current festive season when developers are offering various discounts, free merchandise and services to home buyers, it might be advisable to take advantage of quality housing projects amid weakening values.

It is an end-user market currently; and price points in the premium/luxury as well as high-end/mid-end segments are expected to remain stable in the short- to medium-term.

Corporates occupiers looking at renewing or restructuring leases in the short to medium term will continue to hold strong leverage in the office leasing market. They may, in fact, consider making their leasehold portfolios more flexible by taking advantage of the current market scenario.

Corporates may also use this opportunity to optimize their real estate portfolio by consolidating or relocating to more cost-effective locations. Demand in the retail real estate space is expected to remain steady.

Store openingsThe rate of new store openings is

expected to increase over the course of the year with a number of major fast fashion groups planning market entry and/or expansion in coming months. On the legislative side, while clarity has been provided on sourcing and city spread there is still confusion over the regulations concerning limitations on minimum investments and creation of back-end retail infrastructure. It is expected that the government will continue to resolve the concerns of overseas retail groups willing to invest in India.

PE investmentKey trends expected to govern PE

investments going forward will include investors valuing in-depth micro-market knowledge, funds with smaller ticket sizes, third party exits, and the entry of new investment instruments, such as the Reits.

On the whole, India’s investment market is expected to remain subdued over the remainder of the year—with most investors waiting for the resolution of the ongoing political deadlock, while keeping an eye on the forthcoming general elections scheduled for early 2014.

There are still significant investment opportunities left in India’s real estate market. For investors looking at cost-effective projects to park their funds, this might be a right time as weak market sentiments are likely to lead to weak valuations, providing windows for investing in quality projects.

Rami Kaushal Head, Consulting & Valuation CBRE South Asia Pvt Ltd

Dec 30, 2013-Jan 05, 2014 4 INFRASTRUCTURE

NHAI resumes toll road projects with IRB contract

IRB In f ras t ruc tu re L td has emerged as the preferred bidder for Rs 1,500-crore highway development contract for four-laning of the 98.7 km stretch between Solapur and Yedeshi in Maharashtra from the National Highways Authority of India (NHAI).

With the drying up of appetite for the toll-based projects in the past one year, the government had skewed its contract awards towards normal engineering, procurement construction (EPC) basis. Projects like this give an opportunity for asset development in addition to the

The National Highways Authority of India (NHAI) is set to hit the market with an issue of tax-free bonds in mid-January. The issue size will be about Rs 3,700 crore. In fiscal 2012, it had raised Rs 10,000 crore through an issue of tax-free bonds.

The coupon rate — which is the returns to investors — will be finalized later. The bond will have tenures of 10 and 15 years. Recently,

growth in size for developers. The toll project, coming after

a gap of almost a year, wil l be developed on design build finance operate and transfer model by IRB where it has sought a viability gap funding (VGF) of Rs 189 crore — about 12 per cent of the capital cost of the project — from the NHAI.

In the toll model of the highway funding, the government offers VGF, or upfront grant, to developers, capped at 40 per cent of the project cost. The developer raises the remaining amount in a 60:40 debt equity ratio.

the NHAI had raised about Rs 1,300 crore through private placement at a cost of about 8.1 per cent.

The bonds had tenures of for 10 and 15 years. For the current fiscal, the NHAI has received the Finance Ministry’s approval to raise Rs 5,000 crore through tax-free bonds. The coupon rate for the latest issue will be linked to the yields on government securities (G-secs) of similar tenure,

IRB plans to develop the Solapur-Yedeshi section in 910 days. The concession period for this project is 29 years, which means IRB will retain the right on toll revenues f rom the pro ject for 29 years before transferring the asset to the government.

This project will add up to the company’s present construction order book of Rs 5,050 crore, which is to be executed in the next two to three years. The company has 18 toll projects, of which 16 are operational.

according to norms specified by the Central Board of Direct Taxes.

The authority’s tax-free bond issue, by virtue of being AAA-rated, can offer a maximum return of 55 bps less than that offered by G-secs of similar tenure. Simultaneously, the NHAI is also in the market to raise up to Rs 4,000 crore through capital gains bonds.

India to upgrade 73 roads along China border

RBI to relax norms for takeover of infra loans

The Government of India has planned 73 critical and strategically important roads for development under Indo-China Border Roads Pro ject and 61 o f them have been assigned to Border Roads Organization.

Defence Minister A K Antony said that during the past five years formation of 12.16 km of such roads has been completed in Sikkim, 419.98 km in Arunachal Pradesh, 186.73 in

Uttarakhand, 114.05 in Himachal Pradesh, 384.28 km in Jammu and Kashmir.

Out of this, he said, surfacing of 7.63 km of roads has been done in Sikkim, 392.16 km in Arunachal Pradesh, 56.96 in Uttarakhand, 71.92 in Himachal Pradesh and 328.38 in Jammu and Kashmir. There is, however, no plan to construct any four-lane road near China border, he said.

NHAI’s tax-free bond issue to hit market in mid-Jan

Odisha to spend `15,000 cr on road projects

Construction of road projects has been on the priority list of the government. In the current fiscal, i t announced plans to improve cond i t ions o f 2 ,158 km s ta te highways at a cost of Rs 3,000 crore in four years.

For the first phase, 381 km road projects involving a cost of around Rs 633 crore have been put to tender. The World Bank is a key sponsor of the scheme.

The state government of Odisha plans to invest Rs 15,000 crore for development of major road networks in the state and has sought consultative assistance from World Bank in this regard. The amount would be spent over the next five years for development of major road networks (state highways, district and other roads), wrote Jayashree Tripathy, Deputy Secretary, State Finance Department, to the Finance Ministry, outlining the need to get

World Bank grant for fruition of the plan.

During 2010 to 2013, the state invested around Rs 1,500 to Rs 2,000 crore annually for development of major road networks.

As Odisha is steadily progressing towards indus t r ia l i za t ion and urbanization, the letter said, the state needs technical assistance from the World Bank under RIDF (rural infrastructure development fund) to implement the road projects.

Muthoot Group arm plans to list infra assets in Reit MPG Hotels & Infrastructure, a

Muthoot Pappachan Group company, proposes to list assets in a Real Estate Investment Trust (Reit). Reits invest primarily in completed, revenue-generating real estate assets and distribute a major part of the earnings among investors.

Typically, the income of these trusts comes from rentals received from such properties. Small investors will be able to invest directly in physical

The Reserve Bank of India will relax norms for the takeover of infrastructure loans, allowing them to be treated as standard assets even if they are rescheduled during the process. Under the current rules, any rescheduled loan is treated as a non-performing loan (NPL) for which banks have to make provisions.

The new rules are expected to give a big boost to refinancing by newly established infrastructure debt funds (IDFs). The RBI has agreed for change

in norms. A directive is expected soon. IDFC has raised $1 billion while IL&FS has an Rs 750 crore IDF ready for deployment.

The directive is expected to spell out that an infrastructure loan taken over by an IDF would be treated as standard asset and not as a rescheduled loan. IDFs were launched in 2011 to facilitate the flow of long-term funds to the infrastructure sector, but have seen little traction in the past two years.

assets as against company shares. The market expects SEBI to allow Reits soon, said Thomas John Muthoot, Chairman & Managing Director, Muthoot Pappachan Group.

The move will help deepen the country’s real estate market in terms of both exit and financing options for developers. MPG Hotels and Infrastructure has lined up major investments in the hospitality sector, said Muthoot.

Dec 30, 2013-Jan 05, 2014 5BUILDING MATERIALS

Advances in concrete with mineral admixtures

The understanding of the materials aspects of the mineral admixtures and their impact on the hydration, strength and durability of concrete will make a positive

contribution

Importance of mineral admixtures

It is now an established fact that durable concrete means concrete with fewer micro-cracks (10-100 micron). Micro-cracks in concrete allow ingress of external deteriorating agents such as water, carbon dioxide, chlorides, sulfates, and so on, leading to the deterioration, distress and destruction of the structure.

They can be reduced by using pozzolanic or cementitious materials, collectively called mineral admixtures, to replace cement in concrete. The term includes al l si l iceous and aluminous materials, which, in finely divided form and in the presence of water, react chemically with the calcium hydroxide generated during cement hydration to form additional compounds possessing cementitious properties.

Good scopeThey may be naturally occurring

materials, industrial and agricultural wastes or by-products, or materials t h a t r e q u i r e l e s s e n e r g y t o manufacture. The mineral admixtures presently under use and permitted by the national standards are pulverized fuel ash (PFA), blast furnace slag (BFS), silica fume (SF).

The rice husk ash (RHA) and metakaolin (MK), although permitted by the national standards, still have good scope for larger utilization. There are also some new mineral a d m i x t u r e s , c u r r e n t l y u n d e r investigation. The present article highlights the potential of RHA as well as some new mineral admixtures, for application in concrete as a partial replacement of cement.

The action of mineral admixtures can be explained in a simplified manner as follows:

cement + water = hydrated paste + Ca(OH)2

mineral admixture + water = slurry

mineral admixture + Ca(OH)2 + H2O = calcium-silicate-hydrate (or C-S-H), through secondary hydration

The calcium-si l icate-hydrate or C-S-H is a principal strength-giving compound in the hardened concrete. The formation of additional cementitious compounds during secondary hydration leads to a reduction in temperature rise and refinement of pore structure in the hardened concrete.

Improved durabilityCalc ium hydrox ide (CH) i s

considered as a weak link in the concrete structure. The consumption of calcium hydroxide to form strength-giving phases, principally C-S-H, during hydration leads to improved durability of the structure in terms of its resistance to deterioration through carbonation, corrosion, sulfate attack, alkali–silica reaction, and so on. Besides the chemical (pozzolanic or cementitious) reaction, the mineral admixtures also act physically.

The finely divided particles act as

fillers. This is particularly significant in the interfacial zone, where they produce denser packing at the cement paste–aggregate particle interface, reduce the amount of b leeding and produce a more homogeneous microstructure and a narrower transition zone. The overall effect is the enhancement in the strength and durability or the service life of concrete structures.

There is also a need to identify a process to manufacture RHA on a small scale near the paddy fields and suitable for adoption in rural areas.

Finer than cementRHA, produced under proper

condi t ions, is sof t and eas i ly pulverized to the desired size, generally finer than cement, with a median particle size lesser than 10 micron or lesser and the BET surface area of 20–40 m2/g.

The s i l i ca con ten t (mos t l y amorphous) could lie between 87 per cent and 96 per cent. Unlike silica fume or fly ash, the particles of RHA are angular and remain porous even after the size reduction. Unground or improperly ground RHA exhibits low pozzolanic activity and high water requirement due to water absorption by the porous particles.

The fine particles of RHA affect refinement in the pore structure of concrete. The water requirement of concrete with RHA is generally higher. The use of RHA in concrete can be considered as safe from the toxicity point of view.

It can be classified as an ASTM C618 Class N pozzolan. The level of cement replacement depends upon required improvement in the strength and durability properties of the blend; cement replacement up to 30 per cent, on mass basis, has been tried successfully.

New mineral admixturesSome new, lesser known but

potentially useful, mineral admixtures are mentioned in the fol lowing paragraphs. It should be noted that most of these admixtures are still under investigation at various stages of development.

with mineral coal or separately. However, it is necessary to control the carbon, alkali, chloride and sulfate content.

In addition, leaching and toxicity properties also need to be tested before its use in concrete. It is possible to produce structural grade concrete, partially replacing cement with pulverised ash obtained from co-combustion of coal and biomass, to the extent of 20 per cent–25 per cent.

In general, it is observed that the water demand, requirement of air entraining agent and setting time increase with the application of such ash. The durability parameters also need to be tested, on a case-to-case basis.

The European Standard allows co-firing of biomass with coal, up to 25 per cent on mass basis. However, on account of the wide range of biomass resources and combustion conditions, upper limit has been specified for the content of alkali (5 per cent), chloride (0.1 per cent), and unburned carbon (5 per cent). Some examples of biomass ash are: corn cob ash, palm oil residue ash, sugarcane bagasse ash, wheat straw ash and wood waste ash.

Calcined wastepaper sludge (CWS)

There is a wor ldwide t rend toward recovery and recycling of wastepaper. The recycling process results in significant quantities of sludge as a byproduct of the ink removal process.

Typically 20 per cent–35 per cent of the wastepaper feedstock

Dr J D Bapat Independent Professional

is lost as sludge, which is mostly disposed of as a landfill, raising environmental concerns. It is found that calcination of sludge, under controlled condition, produces ash with pozzolanic characteristics. The ground CWS generally has finer particle size and it can be used as pozzolanic material, partially substituting cement in concrete up to 20 per cent.

Electric-arc furnace dust (EAFD)

The electric arc furnace (EAF) produces carbon steel and alloy steel from scrap metal along with variable quantities of direct reduced iron, hot briquetted iron and cold pig iron. The furnace produces dust containing particulate matter and gas.

The particulate matter removed in dry form, in the gas cleaning system, is referred as EAF dust (EAFD); nearly 15–20 kg dust is generated per tonne of steel produced. The substitution of cement with EAFD to the extent of 7.5 per cent–15 per cent is reported to improve the strength and durability, whereas higher additions may have an adverse effect on the strength. The maximum amount of EAFD that could be added to cement should be decided on the basis of the possible environmental impact, that is, the leachability of the heavy metals.

Development of cement and construction industry

It is known that production of a ton of Portland cement expels an almost equal mass of carbon dioxide in the atmosphere. The cement industry contributes 5 per cent of the total anthropogenic carbon dioxide emissions, globally.

husk. It contains about 20 per cent ash, of which about 95 per cent is silica, besides other constituents.

On average, 1 t of paddy produces about 200 kg of husk, which upon combustion produces about 40 kg of ash. The modern fluidized or cyclonic bed processes produce RHA with above 85% amorphous silica and very low carbon content in the range of 1 per cent–4 per cent.

Biomass combustion ash A significant fraction, up to one-

fifth of the herbaceous biomass consists of inorganic constituents, commonly referred to as ash, which cannot be converted to energy through combustion.

It is possible to produce ash with pozzolanic properties, burning and processing biomass under controlled conditions, either through co-firing

Rice Husk Ash (RHA)R H A , u s e d a s p o z z o l a n i c

admixture in cement and concrete, is obtained from the combustion of rice husk (RH) under certain conditions of the surrounding environment, temperature and residence time and subsequent size reduction.

RH is presently considered as an agricultural waste and used as fuel, where its pozzolanic value lies unutilized. The abundant availability of RH in the rice producing countries provides us a huge scope to recover its heat value to generate power and to use the RHA produced in cement and concrete on a large scale.

The product ion of RHA with cogeneration of power as well as its application in cement and concrete, both contribute toward the reduction of greenhouse gas (GHG) emissions. The large-scale application of RHA in the construction industry requires industr ial and economic pol icy planning.

RH is the outer shell covering the rice kernel. It is obtained when paddy is threshed to separate rice and the

Scanning electron microscope (sem) image showing platy or foil-like C-S-H, fine bundles of C-S-H fibers and platy ch (top)

X-ray diffractograms of rice husk ash (rha) and wheat straw ash (wsa)

RHA

WSA

Rice Husk Rice Husk Ash (RHA) after grinding

Thus, replacement of Portland cement by mineral admixtures leads to sustainabil ity, as the mineral admixtures are mostly industrial and agricultural wastes. The volume of these wastes currently produced worldwide exceeds their utilization.

T h e g l o b a l s c e n a r i o o n sustainability of the cement industry, predicted by the World Business Council for Sustainable Development (WBCSD), envisages reduction in CO2 emission by a factor of 2 by 2050 from their 1990 levels.

The technological shift will require not only changes in concrete raw mater ia ls and mix design, but a lso new bui ld ing techniques, using less materials to obtain the desired structural properties. The understanding of the materials aspects of the mineral admixtures and their impact on the hydration, strength and durability of concrete will make a positive contribution.

It will also encourage greater and more fruitful utilization of these and even other wastes in cement and concrete and lead to the sustainable growth of both the cement and construction industry, on the one hand, and the waste-producing industries, on the other.

Dec 30, 2013-Jan 05, 2014 6

Jaipur Metro line expansion to get ADB

$176 m loan

Amritsar-Delhi-Kolkata industrial corridor

planned

The Asian Development Bank (ADB) said it will lend $176 million for the expansion of the metro line in Jaipur. “The ADB will lend $176 million to extend the first metro train line in Jaipur and draw up plans to build a second line, reducing congestion and pollution in the fast-growing Indian heritage city,” said the bank in a statement.

Under the Jaipur Development Authority’s public transport plan, the local government is constructing 9.7 km elevated Line 1 metro train from Mansarovar, in the western part of the city, to Chandpole, on the western edge of the central business district.

“Building efficient mass transit transport to get people more quickly to their jobs, schools and homes in Jaipur will help reverse the rising use of private cars, making the city a cleaner and safer place to work and live,” said Dong Kyu Lee, Principal

Commerce & Industry Minister Anand Sharma said that he will soon approach the Cabinet for approval of the proposed Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC). The project will be the second of its kind on the lines of the Delhi-Mumbai Industrial Corridor (DMIC), a $90 billion ambitious infrastructure project under implementation with Japanese help. He said Japan is partnering in DMIC and the UK may join hands for the proposed Mumbai-Bengaluru economic corridor.

“We are working on Amritsar-

Transpor t Spec ia l is t in ADB’s South Asia Department. ADB’s loan will help finance an additional 2.3 km underground stretch from Chandpole to Badi Chopar which is likely to provide access to the central business district by March 2018.

By providing connections to the entire central business district, ADB’s extension is expected to carry 126,000 passengers every day during its first year of operation, and generate around 61 per cent of all the trips on Line 1.

“The construction of the Line 1 extension – to cost a total $259 million with the balance paid by the government of Rajasthan – will be built to ensure that there is minimal risk from urban flash floods and other climate-related events,” said ADB.

ADB’s loan will also help finance studies into a planned 23 km long, north-south Line 2 metro line.

Delhi-Kolkata Industrial Corridor (ADKIC) and very soon I am going to move the Cabinet for approval for this corridor,” he said, adding, “I hope to take the Cabinet approval by January first week. It is a work in progress.”

ADKIC, envisaging a budgetary support of Rs 5,749 crore for the first phase, will be aligned to the Eastern Dedicated Freight Corridor and will be spread across 20 cities in seven states -- Punjab, Haryana, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand and West Bengal.

PROJECTS UPDATE

L&T bags `2,935-cr T&D order from Qatar

Aussie firm to build roads with instant highway technology

Highway projects worth `1 lakh cr to be expedited

Infrastructure f i rm Larsen & Toubro’s power transmission vertical has bagged Rs 2,935-crore order for setting up transmission and distribution network in Qatar.

“ Po w e r t r a n s m i s s i o n a n d distribution business of L&T has secured an EPC (engineer ing, procurement and construction) order valued at Rs 2,935 crore from the Qatar General Electricity & Water Corporation for supply and commissioning of transmission lines and substations,” said the company in a statement.

The order is part of expansion of the Qatar Power Transmission System. “This order aligns well with L&T’s expansion plans in the international arena,” said S N Subrahmanyan, Senior Executive Vice President (Infrastructure & Construction) L&T, in the statement.

An Australian firm has secured a $110 million deal to apply its ‘instant highway’ technology to create a road network that would transform regional Maharashtra.

Queensland-based Global Road Technology Australia secured the deal with Indian construction and energy giant Triace. It would see the firm’s road stabilization technology applied on the ground through a joint venture with Indian firm Pearls Group -- to be called Pearls GR.

The million dollar agreement would see the technology laid on 7,000 km of road in India. GRT director Ben Skinner said the technology

The Highways Ministry expects projects worth over Rs 1 lakh crore, which have been stuck for long, to start moving from next month as a concrete decision on the rescheduling of premium paid by developers is expected by the end of this month.

“I am hopeful that highway projects worth over Rs 1 lakh crore would be on stream next month onwards. The report of C Rangarajan Committee on premium rescheduling is likely to be accepted by month-end,” said Road Transport & Highways Minister Oscar Fernandes.

The government has constituted a panel, headed by Prime Minister’s Economic Advisory Counci l C Rangarajan, to look into the issues

Rail India Technical & Economic Services (Rites) has presented the preliminary report on the extension of Kochi metro to Tripunithara on the southern side of Kochi.

This is a part of the project’s second phase. Currently, the rail line stretches from Aluva on the northern side and Petta on the southern side with a distance of 25.6 km.

The Kochi Metro Rail Limited (KMRL) Managing Director Elias George said the report had identified the route to Tripunithura through SN junction from Petta along the Kochi- Dhanushkodi national highway. This reach up to SN Junction would be executed at an approximate cost of Rs 200 crore and could also be undertaken as part of the present first phase, he said.

The expansion projects in the second and subsequent phases are proposed up to Angamaly, through the Cochin International Airport, on the north and from Jawaharlal Nehru International stadium at Kaloor to Kakkanad, the city’s IT hub as well as to west Kochi. Extension

The scope of work for the company includes supply, erection, testing and commissioning of switch gears, power transformers and auxiliaries, said the statement. The project, which is spread across prominent locations in

was expected to create a road network that would transform regional Maharashtra.

“Our partnership with Pearls and the signing of the agreement in India demonstrates the demand for our products and their potential to provide infrastructure solutions globally for any number of industries and applications,” said Skinner.

“Pearls GRT’s road-bui lding technology has the potential to revolutionize how roads are built and the company is entering an exciting time in its development,” he added.

The technology would allow the construction firm to lay up to 6,000

pertaining to bailout of highway developers. The government had approved a proposal in October for postponement of premium payments by highway developers and has referred the matter to the Rangarajan panel. The move is likely to provide relief to a large number of players such as GMR, GVK and Ashoka Buildcon.

Their projects have been facing delays on account of high premium -- the payment made by developers to the National Highways Authority of India under the build, operate and transfer (BoT) mode. The premium, which is offered by companies during the bidding stage, is based on projected returns from tolls.

subsequently from SN junction to other parts of Tripunithura could also fall in the second phase.

Rites will submit their final report soon and the board of directors of KMRL and the state government are expected to provide consequential approvals in due course.

George said the study had found that the proportion of city dwellers using public transport, especially buses, had come down drastically from 70 per cent to 59 per cent in the past 12 years and if a ‘business as usual’ scenario continued, this might come down to below 50 per cent, leading to further congestion in the city roads. To maintain the share of public transport, new modes of transport like monorails and Kochi metro rail were requisite, the report pointed out.

With the metro rail, the share of public transport can be brought up to 66 per cent. Also, the report has shown that the roads in Kochi cannot take any more traffic movement unless they are improved.

Qatar, is scheduled to be completed in 22 months. These substations are being built to augment the existing power system network to cater to the growing infrastructure facilities.

sq metres of road a day compared to traditional methods that could take up to a month per km, he said, adding that it meant rollout time from planning to finished road took a matter of days with GRT technology.

Selling features of the technology included that it was tested under some o f Aus t ra l ia ’s harshes t conditions at mining sites where haulage roads must remain open 24 hours a day to boost productivity. The firm was already working across India, North and South America, said Skinner, in major mining, oil and gas developments, and with government sector.

Fernandes said that this move will pave way for many upcoming infrastructure projects. The ministry had sent a proposal to the Cabinet seeking its nod for rescheduling premium of about Rs 1 lakh crore involving 23 BoT (toll) projects.

Meanwhile, sources said one of the proposals made by the Rangarajan panel is that 75 per cent of the premium amount payable to the government will be restructured in the first three years of the contract. At present, companies pay some amount of premium to the government in the first year of the project which keeps increasing in the subsequent years.

Rites presents report on Kochi Metro

extension

Dec 30, 2013-Jan 05, 2014 7REAL ESTATE

A strong push for international expansionAs the sector prepares

for a period of expansion, leaders

acknowledge that their organizations need to have the right support in place. Mega-project management is seen

as a crucial component to deliver expensive,

complex programs on time and on budget

(Part 2)

Twenty-four per cent of respondents state that their company sees good prospects in the rail sector, which is enjoying a boom thanks to initiatives such as the Delhi and Rio de Janeiro metros, California’s high-speed development, New York’s ambitious plans, and the UK’s London Cross-Rail and High-Speed 2 programmes, as well as various national projects to transport coal, liquid natural gas and other raw materials essential for energy. Businesses from Asia Pacific place high hopes on roads and bridges, reflecting their infrastructure needs.

New skills and knowledgeAs they move into new sectors

and geographies, leaders should be aware of the necessary skills and knowledge associated with these industries and regions. One respondent from a Greek contractor says his company suffered from such inexperience, “The project that underperformed was in the field of offshore engineering, where we had limited previous experience, technical skills and expertise within the group.”

Another executive from a Canadian firm affirmed this concern, “We are experiencing growing pains due to our recent rapid revenue growth. We have key project players operating outside of their comfort zones negatively impacting project execution.”

Across all regions and all company sizes, growth is expected to come primarily through organic routes, with less than 10 per cent believing that mergers and acquisitions (M&A) will fuel such expansion. A number of respondents mentioned that cash shortages restricted their options to pursue M&A.

As the sector prepares for a period of expansion, leaders acknowledge that their organizations need to have the right support in place. Mega-project management is seen as a crucial component to deliver expensive, complex programmes on time and on budget, minimizing waste and avoiding the expense caused by idle physical and human resources.

Efficient managementOf al l the factors necessary

to g rowth , however, e f f i c ien t management ranks highest, with 81 per cent naming this as the most important. A robust risk culture helps avoid some of the pitfalls that can destroy margins and damage reputations, yet, as the next section shows, the industry still has some way to go before it can have real confidence in its ability to manage risk.

Hav ing inves ted heav i l y in risk management over the past decade, most engineering and construction executives believe that this expenditure has paid off, with only 7 per cent claiming that their practices and controls are not working effectively.

Such confidence is backed up by one of the respondents,

whose business is based in the US: “Investing in project risk management pays off significantly. A strong contract negotiation tracking system is key to identifying the risks, which allows for better pricing of the contract. It is also important in mega-contract negotiations, to understand which terms can and cannot be negotiated, so that r isks are identif ied and considered in the pricing.”

Despite this confidence, more than three-quarters of respondents admit to the presence of underperforming projects, with the prime causes being delays, poor estimating processes, and f a i l ed r i s k managemen t processes.

Poor subcontractorCompanies also suffer from poor

subcontractor performance and design errors and omissions. One respondent from the Europe, Middle East and Africa region comments that, “Loss-making contracts severely impacted results,” while another executive from Canada admits that, “Project execution is to blame for the decrease in margin.”

In some cases, clients are not as reliable as anticipated, which suggests a lack of due diligence when bidding, as a respondent from a construction business in Ireland mentioned, in reference to a troublesome location, “This country had been identified as a major area of concern for contractors, with incidences of non-payment, and clients not adhering to the contract conditions.”

The potential for such incidents could be reduced significantly by better risk management, so the sector needs to consider why it has

not achieved the levels of some other industries, and figure out how to embed a stronger culture.

Clients are increasingly ranking contractors on their risk management competency, as another survey participant from Europe explains, “The rise of the PPP model has also meant more qualified people are making decisions and including risk assessment – not just price – as a key determining factor.”

Human elementHowever, good risk management

is as much about people and culture as it is about processes and procedures, as one executive from a US contractor observes, “As primarily a very large services organization, we don’t take project risk.

When we have projects that underperform, it’s mostly due to the human element, not a failure in controls.” This concern was put even more succinctly by a senior manager from a Canadian company, “They knew the risk; they just did not correctly qualify it.”

KPMG’s 2013 Global Construction Survey shows an industry in better shape now than four or five years ago, with rising backlogs and largely healthy margins. The recovery in the global economy is dr iv ing infrastructure, power and energy projects, while cheaper gas prices are leading to manufacturing growth.

Nevertheless, contractors have to balance the longer term need for capi ta l projects wi th more immediate pressures on owners’ funding sources. Invest too much, too soon, and the demand may not arrive in time, leaving companies with idle resources. Invest too little, too late, and they may miss the wave altogether.

RecommendationsWhile issues such as government

f und ing and cap i t a l ma rke ts movements are beyond their control, engineering and construction leaders can take steps to position themselves for the future. The respondents to this year’s survey made the following recommendations:

Invest in people: As they move into sometimes unfamiliar areas, it is essential to have sufficient skills and sector knowledge. For example, one respondent from a UK company says that his company’s priority is, “Recruitment of key personnel with industry experience of the rail and energy sectors.”

Enhance management of mega-projects: The scale of infrastructure projects is increasing, and companies have to step up accordingly, as a US executive notes, “We must have the right people in the right location to participate in mega projects that result from new opportunities, as energy costs decreases. This includes transportation and construction of power plants, and large-scale manufacturing. The key to success is how these projects are obtained and managed. We will have to acquire companies that already have the people and experience in key markets.”

Create a true risk management culture: Many of the controls appear to be in place. Now it is time for contractors to make sure that people are fully aware of and observing these procedures, and that management has an enterprise-wide view of risk.

One executive from a US firm summed this up by stating, “We need to get more people to follow the process. We have invested heavily in risk management for more than a decade now in a formal way. Our emphasis continues to be to intensify training and communication about risk.”

Another respondent from the Asia Pacific region agrees that it is all about people. “We must ensure people think of risk management as a fundamental part of the construction process and have it top of mind at every stage of work.”

Standardize: In a sector that has grown rapidly through mergers and acquisitions, standardization has been an important goal that contr ibutes to project and r isk management.

According to a senior executive from a South African contractor, “This (standardization) process is ongoing, and is a difficult challenge as every project is different. Whenever new people start on a project, they bring with them different processes.”

To spread good prac t ices , contractors can increase their use of project management software and step up training.

As a respondent f rom India emphasizes, the goal is to, “Build efficiency and controls, consolidate project delivery, and tighten all leakages as much as possible.”

Become a strategic partner to clients’ businesses: By working more closely with clients from all sectors, engineering and construction companies have the opportunity to gain more control over future projects, and help find innovative ways to reduce costs.

This should bring more reliability to forecasting and ensure that they have the proper human and physical resources available to cope with mega projects.

(Concluded)

(Courtesy: KPMG International’s 2013 Global Construction Survey)

Respondents to this year’s global survey appear to be open to new sources of business. Forty-seven per cent say that they plan to move into new geographies, and 44 per cent are prepared to enter new sectors of the industry.

The most popular region for expansion is Africa, followed by the US and Canada, with the Middle East third. Engineering and construction companies from the Americas are the big exception, with 64 per cent placing the US and Canada as their first choice.

These f indings suggest that Cen t ra l and Sou th Amer i can companies may be attracted by the geographical proximity and economic and regulatory stability of North America. Twenty-seven per cent of respondents from Asia Pacific are considering entering the Middle East, despite the turmoil in Egypt, Syria and Iraq.

Challenging business climate

Very few senior industry executives plan to move into Western Europe, reflecting the challenging business climate in this region. The US and Canada are the top choices for medium and larger firms taking part in the survey, which once again indicates that markets such as Africa are seen as carrying higher risk.

However, only one in 10 smaller companies expect to enter the US and Canada; these organizations may feel that the level of competition is too great in this part of the world, and are more comfortable setting their sights on Africa. Overall, the survey shows that the bigger the company, the more likely they are to have ambitious overseas growth plans.

Dominant new sectorPower is undisputedly the dominant

new sector, which is consistent with the increase in economic activity and the global quest for greater energy security, fuelled by cheap prices for gas. Power stations are being built around the world for coal, nuclear, gas and renewables.

Mining is another high priority, with growing demand for copper, iron ore and specialty metals. In second place is water, to support urbanization and water-intensive industries such as mining and other forms of manufacturing.

10

60

50

40

30

20

10

0

7%

12%

18% 18%

24%

27%

57%

13%

15%16%

28%

New sector focus

Educational Housing Office/Retail Healthcare Industrial Roads/Bridges Other Rail Mining Water-related Power/Energy

Dec 30, 2013-Jan 05, 2014 8

You can make your own residential property

into a real home. Also, you have the

financial assurance of a rock-solid asset to

fall back on

REAL ESTATE

4 great reasons to buy home

If you’ve been indecisive about buying a home and have so far preferred to rent instead, this is a good time to finally make your move. Home ownership is one of life’s greatest joys, but that is not the only reason why you should finally take the plunge.

Advantages of ownership Bargains: It is a buyer’s market

now. There have never been more developers in the fray, and there is a huge number of projects out there to choose from. This means that you can get a real bargain today -- and that too with top developers who are known for excellent locations, construction and project amenities.

Even with a less-than-spectacular budget, you can now own a great

Guidelines for retail investors

There are three ways to invest in commercial

real estate – directly buy office space from a developer, buy shares of a commercial developer from the stock market,

or invest in a real estate fund focused on commercial real estate

Buying an office or retail space is a huge investment, which is why commercial real estate has been traditionally seen as an asset class that only institutional investors or heavyweight HNIs could invest in. That, however, is changing. Many retail investors are now getting into the office real estate game.

Fo r a p e r s p e c t i v e o f t h e opportunities in Indian commercial real estate, consider this – Manhattan in New York City has 450 million square feet of Grade A stock, while London has 200 million sq ft. In comparison, India’s collective office space stock accounts for only 375 million sq ft. This showcases the long-term potential for office space at all levels in India.

Very few of the world’s commercial real estate markets have undergone such a dramatic and rapid change in such a short span of time as India’s has. The next few years will see a quantum spurt in the services and knowledge sector, opening up tremendous opportunities for the retail investor.

Investment routesThere are three ways to invest in

commercial real estate – directly buy office space from a developer, buy shares of a commercial developer from the stock market, or invest in a real estate fund focused on commercial real estate.

As the quantum of investment is usually huge, the prospective buyer needs to take more informed

decisions. Another option, which is investing in Real Estate Investment Trusts, is expected to be opened up shortly by the government. The Reits are pooled investment entities where the corpus is invested primarily in completed, income yielding real estate assets and distribute a major part of the revenue/income generated among their investors.

Many developers, especially in cities such as Mumbai, are today offering smaller units of space (as small as 500-1,000 sq ft) in Grade A buildings given the higher vacancy and pressure on pricing. This is in sharp contrast to the scenario a few years back, where only much larger units were available – making it tough for a small investor to invest in office real estate.

Investors considering retail space can now consider a multitude of affordable options in free-standing high street outlets or shops in malls.

Advantages of smaller units It is easier to find tenants for

them.The premises can also be used

for business by their owners if they happen to be of an entrepreneurial bent of mind.

Today, even professionals like doctors, auditors, stock brokers and lawyers are buying commercial properties for investment and self-use. Of course, HNIs also continue to plug huge amounts of money into high-ticket commercial properties in the quest for yield.

Pr ivate bankers and weal th management f irms confirm that their clients have actively started investing in commercial properties after staying away in 2009 and 2010. These investors have bought into commercial properties because they seek assets that can protect their portfolios from inflation and stock market volatility. On their side, banks are willing to lend up to 50-60 per cent of the LTV to buy commercial properties, subject to the borrower’s

Arvind Jain Managing Director, Pride Group

adequate net worth and established ability to repay.

The investor should focus on a few carefully selected markets with a diverse economic base, deep pool of tenants and tenants who like quality buildings.

While looking at under construction projects, the investor should look at developers who have a track record of delivering high quality projects on schedule.

No child’s play Desp i t e t he ava i l ab i l i t y o f

more rat ional ly priced options, investing in commercial real estate is most definitely not child’s play. It requires forethought, research and planning:

Investors need to establish the soundness of the location and its demand/supply dynamics. If they do not engage in sufficient research, they may end up buying into micro markets which have or will have high vacancies.

They need to ensure that the economy, j ob marke t , f u tu re infrastructure development and population growth in the market is healthy

They need to check the developer credentials, access to public transport and quality of property management in the project

They need a knowledgeable real estate agent and a lawyer who can give them sound advice

If they are investing in a retail store, they need to consider the frontage, foot-fall and the dynamics of the adjoining catchment

Entrepreneurs who wish to buy commercial real estate for self-use should ensure that the amenities in the project that match their business needs

Income producing officeThe break-up of cash flowsThe vacancy factorExpenses such as maintenance,

property tax and building insuranceLease term, lock-in period and

expiry datesLong term capital appreciation

potentialRefurbishment, refinancing and

repositioning potential

Good opportunityThe rental yield for commercial

property is usually 9-11 per cent. In contrast, the yield for residential property is much lower at 2-3.5 per cent. The demand for office space in India is likely to stand at around 200 million sq ft over the next five years.

Post the GFC, the pr ices in markets like Mumbai have dropped around 35-40 per cent and have bottomed out in most micro-markets,

Investment value: When you pay rent on a home, the money is basically gone forever. You get no returns and no security -- all that your money has paid for is accommodation. The landlord gets

home in a great neighbourhood. Banks are also falling over each other to sanction home loans. In other words, your application will get successfully processed faster than ever before.

offering investors a good opportunity to buy into commercial real estate.

India’s macroeconomic growth story makes for a rather compelling reason to get one’s own paragraph into it somewhere. Chosen prudently, and office real estate can let you do that in indelible ink.

Ramesh NairCOO, Business, JLL

Last year, the demand for office space across India was 26 million square feet and this year is expected to see demand of 28 million sq ft. The possibility of diversifying one’s portfolio, the sheer pride of ownership and the benefits of the longer leases that typify commercial tenants are other reasons to look at commercial real estate investing.

Remember, you do not only make a profit on the sale of appreciated commercial property – the rental cash flows of a well-located office or shop space are considerable. Unlike in residential property, the income that can be generated from commercial property is what determines its value.

In other words, the capitalization rate is actually the measure of the demand for the property. For those who do their homework well, investing in commercial property is a high-adrenaline and high-returns game that residential real estate investment cannot hold a candle to.

richer, but you have not reaped any investment benefits.

It is true that buying a home involves a large init ial f inancial outlay. However, unlike with paying

only about occupancy but also about long-term investment. Also, you save tax on your home loan.

Sense of belonging: People who rent homes in a major city never really build firm relationships with their neighbours. When you own a home, your children make long-lasting friendships, and the adults in your family become part of a long-term support system. Research has proved that people who have healthy relationships tend to be happier and have less stress in their lives.

Security of ownership: Obviously, home ownership means that the home is yours - not somebody else’s. There are various advantages built into this, because you have the right to do what you want with your home.

In other words, you can renovate, refurbish, paint and decorate it as much as you please (within the bounds of the housing society byelaws, of course). In short, you can make your own residential property into a real home. Also, you have the financial assurance of a rock-solid asset to fall back on.

rent, these expenses are recovered o v e r t i m e , b e c a u s e y o u a r e building equity in your own home. Residential property in major Indian cities appreciates very well indeed. Remember, home ownership is not

Representation only

Dec 30, 2013-Jan 05, 2014 9EqUIPMENT

Global CE market to reach $192.3 b by 2017

Terex donates pink paint job on Phoenix crane’s T340-1 truck crane

According to a new market report published by Transparency Market Research ‘Construction Equipment Market - Global and China Forecast, Market Share, Size, Growth and Industry Analysis, 2011 - 2017,’ the global construction equipment market is expected to reach $192.3 billion by 2017 from $143.6billion in 2012, growing at a CAGR of 6.0 per cent from 2012 to 2017.

The earth-moving equipment segment is in a commanding position contributing about 43% to the total construction equipment market revenue in 2012. China accounted for majority of the global construction equipment consumption, with Europe at a distant second.

The construction equipment market is driven by factors such as growth in construction activities, emergence of lease-based equipment, and

A new Terex® T 340-1 Hydraulic Truck Crane recently completed its journey from Waverly, Iowa, to Atlanta, Georgia, sporting a fresh new pink paint job, donated by Terex Cranes. In addition to lifting material to help with the construction and renovation of structures, this new Terex crane will raise awareness and provide fundraising opportunities to support breast cancer research.

The owner of the new crane, Phoenix Crane Rental of Mableton, Georgia, passionately supports organizations that help to save and strengthen the lives of those fighting breast cancer, and the new crane is just one method to help with their support.

“This is the second Terex T 340-1 crane that Phoenix Crane has painted in this distinct pink color,” says Steve Ake, regional business manager for

Terex Cranes. “We are honored that they have chosen a Terex model from their fleet to support such a worthy cause and are happy to donate this special paint and decal scheme.”

Capable of reaching highway speeds of up to 60 mph (97 km/hr), the

Atlas Copco launches bucket crushers

Atlas Copco Construction Tools division has decided to complement the Hydraulic Breaker Segment with silent demolition attachments to take full advantage of the construction and infrastructure boom in India.

Indian cities are getting more and more congested and construction companies have the mandate to get the job done with minimal traffic obstruction and minimum inconvenience to citizens in the minimum possible time.

Atlas Copco bucket crushers are an innovative answer to the growing demand for mobile on-site crushing in recycle/crushing of construction and demolition waste, road construction, excavation and quarrying on today´s worksites.

Using these rig-mounted bucket crushers, all types of inert demolition material can be crushed and re-used on site. This process requires less mechanical equipment, less transportation and dumpsite cost and is manageable with only one operator who handles the demolition attachment as well as the bucket crusher.

With this launch, Atlas Copco has become a one stop solution to

A l ready deployed at an o i l refinery in Rajasthan, the Chaudhary Transport Company, New Delhi, has taken delivery of its first-ever Terex® crane -- a Toplift 55 truck crane with a capacity of 55 tons and a maximum boom length of 42 metres.

Delivering a 55 t lift capacity at a 3 metre radius, and a maximum 32 metre fully extended working radius, the Terex Toplift 55 is designed to handle a wide range of lifts. A wide wheelbase, 40 percent gradeability, two drive axles and two steering axles provide sure-footed on-site maneuverability and performance.

Sandeep Sehrawat, Managing Par tner, Chaudhary Transpor t Company, comments, “With the objective of improving our fleet’s reliability and performance, we made the conscious decision to seek a new manufacturer for our latest acquisition. The Terex team was extremely helpful and informed, and offered us exactly the right product at the right price.”

“Terex has a good reputation amongst end users in India and we know of many companies who

condit ions, and str ict emission regulations. The increasing price of raw materials such as steel is also a major challenge for the construction equipment market.

The earth-moving equipment segment holds majority market share of the total construction equipment

market and is estimated to be worth $61.7billion in 2012. Material handling equipment is the fastest growing segment and is expected to grow at a CAGR of 6.6 per cent from 2012 to 2017. The construction vehicles segment is expected to exhibit healthy growth during the forecast period (2012 - 2017) and will attain a market size of $22.9 billion in 2017.

Asia is considered the most promising market for construction equipment worldwide due to relatively good performance of construction and mining industries, in countries like India and China. Europe holds the second largest share of the construction equipment market.

China is the major contributor to the global construction equipment market and accounts for about 41.2 per cent of the overall global sales of construction equipment. The construction equipment market in China in 2012 is estimated at $59.2 billion and is expected to reach $95.6 billion in 2017 at CAGR of 10.1 per cent from 2012 to 2017. In addition, China also holds about 17 per cent market share of the global agriculture equipment industry.

increasing government investment in in f ras t ructure deve lopment especially in developing nations. In addition demand by companies

in infrastructure and real estate is also supporting the growth of the construction equipment market.

Despite the encouragement by

governments across the globe, there are certain factors inhibiting the growth of the construction equipment market such as uncertain economic

modern demolition requirements. The bucket crusher is a great addition to its demolition attachments portfolio which includes KRUPP percussion technology incorporated hydraulic

b r e a k e r s , c o m b i c u t t e r s , b u l k

p u l v e r i z e r s ,

already appreciate the quality and performance of Terex products. It is also reassuring to know that many of my industry counterparts rate Terex service and support highly.”

“As a rental company, efficiency and reliability are essential to provide the service as per our customer’s demand. With new orders of big national and multinational players in the oil industry in our pipeline, the Terex product to deliver to us as well as to our esteemed customers,” concludes Sehrawat.

With its 11.1-m base boom length, the Terex® Toplift 55 telescopic truck crane’s robust five-section decagonal boom features a 42-m fully extended boom length and max imum 42.14-m l i f t he ight . Its swing out jib design extends maximum lift height to 56.6 m.

The jib manually swings into position and offers 5-, 15-, and 30-degree offset positions. Offering a 55,000-kg lift capacity at a 3-m radius and a maximum 32-m fully extended working radius, this Terex crane efficiently handles a wide range of lifting needs.

demolition pulverizers and multiple grapple.

As a unique selling point, Bucket crushers can be employed at all urban worksites, especially in confined condit ions. They can enhance companies’ cost ef fect iveness because asphalt, stone and concrete debris as well as mine and quarry material can be crushed and directly re-used on site or sold to third parties, says Nitin Lall, General Manager, Construction Tools Division.

Hydraulic bucket crushers from Atlas Copco offer a wide aperture

bucket with large capacity. The output size can be easily

adjusted from 15-120 mm (BC 1500: 29-100 mm).

First Terex® crane for Chaudhary

Transport

Sandeep Sehrawat, Managing Partner, Chaudhary Transport Company and Narendra Wahile, Sales Manager, Terex Cranes India

Terex T 340-1 truck crane is designed for quick mobilization and precise handling, so the job is completed correctly the first time.

Air-ride suspension delivers a smooth ride over rough surfaces to increase operator comfort.

Dec 30, 2013-Jan 05, 2014 10CONSTRUCTION

India to be base for Hitachi CE business

Kirby: Building sustainable innovations

The Japan-based engineering and electronics major, Hitachi, is looking to expand its construction machinery and power electronics products business in the Middle East, Africa and South East Asia by making India a base for these segments.

The group, which plans to invest around 70 billion yen (Rs 4,700 crore) by the financial year 2015-16, would bolster the business supported by production for consumption in India by increasing localisation component, said Hitachi Executive Vice President & Executive Officer Junzo Nakajima.

“We wou ld s t reng then the partnership with the local India partners and as a part of that, human resource pool of India would be utilized for that,” said Nakajima.

H i t a c h i i s e x p a n d i n g i t s Ahmedabad-based Hitachi Hi-Rel Power Electronic Ltd, which produces industrial power electronics.

Moreover, the company is starting a new factory for power metallurgy and friction materials by Hitachi Chemical at Neemrana in Rajasthan. In Neemrana, Hitachi is also setting up its first solar power generation unit in India.

“We would have a new R&D centre in Bengaluru for construction machinery,” he said, adding that Hitachi would also open automotive device manufacturing facil i ty in Chennai and construction for this has been started. “Keeping these

K i rby Bu i ld i ng Sys tems , a subsidiary of Kuwait-based $2 billion Alghanim Industries, is one of the world’s largest PEB manufacturers. The company with a total annual capacity of 400,000 mt across five different locations (Kuwait, UAE, Hyderabad & Haridwar in India, Vietnam) has vast experience of serving more than 60,000 customers across the globe since 1976.

Kirby Building Systems started the revolution in the construction industry with the introduction of PEB concept in India in 1999. Since then it has gained impetus in the construction industry, and Kirby is leading this revolution with its constant innovation in products and applications, thereby setting new benchmarks for the PEB industry.

K i rby Ind ia has a capac i ty of 200,000 mt per annum with Hyderabad and Haridwar each having an annual capacity of 100,000 mt respectively, thereby making the company a leading player in the Indian PEB market with a market share of over 30 per cent.

Kirby India has over 27 sales offices and a network of more than 100 certified builders to cater to the erection procedures as per the international standards capable to handle any type of complexity under adverse site conditions.

The company has served over 4,500 customers with more than 15,000 buildings spread over an area of 20 million sq m since its inception. Kirby India has the privi lege of partnering who’s who of corporates,

bases in India, we would like to expand our business in Africa, the Middle East and South-East Asia,” said Nakajima.

Hi tachi has so far invested approximately 35 billion yen (Rs 2,300 crore) in India. The group has recently acquired ATM services provider Prizm Payment Service. The company is looking to expand its footprint in the Indian IT sector through acquisitions.

“We would l ike to do more acquisitions like we have done in case of Prism. If you look at IT-related other acquisitions, in 2011 also we had acquired Hyderabad-based Sierra Atlantic,” he said, adding that the group would continue to look at more such opportunities.

Moreover, Hitachi India Managing Director Ichiro Lino said the company

both from national and international front operating across all industry segments by setting up their facilities in India and across the globe.

Kirby’s Hyderabad and Haridwar factories are ISO 9001:2008 certified. The company is also a member of the Indian Green Building Council (IGBC) and the Institute for Steel Development & Growth (INSDAG).

The company has also been awarded the British Safety Council membership after meeting their stringent qualifying criteria. Kirby’s internal processes and operations are well integrated through SAP, thereby ensuring the best customer service.

Kirby’s buildings are designed as per international standards in norms with AISC, AISI, MBMA, BIS, etc and as per the customer’s requirements. The company uses its proprietary software for design and detailing of PEB structures, in addition to the standard packages which include AutoCAD, STAADPro, ProSteel, Tekla, etc which allow all buildings to be customized as per unique demands of customers.

One of i ts popular products include KSS-600 (Kirby Standing Seam Panel) roofing system which is having double lock standing seam ends and is 100 per cent leak-proof. Kirby is the first PEB manufacturer in India to achieve FM Global approval for its KSS-600 roofing system.

Steel is the preferred material for all prefab structures and PEBs use steel which is more than 90 per cent recyclable. These buildings are

would in January 2014 bid for the railway signalling systems of the Delhi-Mumbai section of the Dedicated Freight Corridor (DFC) project.

He further informed that Hitachi was seriously looking at an opportunity to supply nuclear power plants in India. It has a JV with US-based GE for its nuclear power business called as GE-Hitachi Nuclear Energy.

On Hitachi’s growth in India this financial year, Lino said, “We expect the Hitachi India’s revenue for financial year 2013 to grow in double digits.” In FY 2012-13, Hitachi’s 59 per cent revenues came from Japan and 41 per cent from overseas. India’s contribution was around 1 per cent. Hitachi is now aiming at least 50 per cent revenue to come from overseas by FY 2015-16 and to increase India’s share up to 3 per cent.

cost- effective, energy-efficient and provide better quality environment as they are cooler in hot conditions due to the favorable roofing material and natural ventilation.

These buildings also help in energy saving due to more amount of natural sunlight through skylights used on the roof of the building, thereby reducing the overall power consumption.

The effective usage of insulation material, louvers and other materials also help in making PEB one of the most preferred green buildings. Kirby supplied its buildings with materials which are easily recyclable and do not use materials that are harmful for the environment. Kirby is always looking forward to be a part of green buildings and eco-friendly products.

T h e c o m p a n y h a s a l s o demonstrated its capability to design and manufacture complex and heavy structures by executing mega projects in the automobile, shipyard, general engineering, infrastructure, logistics and various other industry segments.

These big projects require not only the superior design but also excellent project management right from the beginning to the end. Kirby India has also successfully ventured into many unexplored territories like power plant structures, bridge girders, shipyard, etc and became the role model for other PEB players by making inroads into these areas and laying the foundation for similar type of projects.

CE in Australia to make $2.7 b profit

Some of the unique projects the company has executed include the following:

Renault-Nissan, Chennai: The world’s single largest PEB at one single location involving over 20,000 mt of steel and spread over an area of 300,000 sq m

Pipavav Shipyard Ltd, Pipavav: One of the largest ship building facilities built with a height of 40 m

Gammon Ind ia , De lh i : P re-engineered steel bridge girder which is one of its types in India for the Commonwealth Games 2010

Madhucon Projects Ltd, Nellore: Power Plant Structure (TG Building) for their 300 mw thermal power plant with heavy structural columns weighing 17 mt each

Toshiba-JSW, Chennai: Unique structure consisting of a single 500 mt

Hindusthan Nat ional Glass, Nashik: The world’s largest container glass manufacturing facility

Hansen Drives, Coimbatore: The world’s largest wind turbine gear box manufacturing facility

Nipro India, Satara: 90 m long standing seam roofing system

Danieli India Ltd, AP: A complex structure with 42 cranes running across different directions

Delhi Metro, Delhi: The first of its type with curved rafters and the first metro rail to use PEB technology

Bengaluru Metro, Bengaluru: Sheeting through reverse rolling

Suzlon Wind Energy, Mangalore: The world’s largest rotor blade manufacturing facility

S E Forge, Coimbatore: The world’s largest foundry

Sterlite Infratech, Aurangabad: G+6 structure to manufacture optical cable with heavy loading on each floor and many more such projects across India

K i r b y a l s o r e c e i v e d s o m e recognitions and accolades such as CNB C -TV18 In f ras t ruc tu re Excellence Award 2011, Greentech Environment & Safety Awards 2011, EPC World Awards 2011, Greentech Safety Award 2012 and various other awards in seminars or events where the company has participated or sponsored over these years.

Currently, the industry is growing at an average of 10-15 per cent per annum with the market demand pegged at 500,000 mt per annum. Due to the increasing demand for these type of structures, Kirby has entered into heavy engineering applications that include offices/c o m m e r c i a l b u i l d i n g s / h i g h -rise buildings, shopping malls, multiplexes, power plants, oil & gas structures, steel plants, bridge girders, mult i- level car parking structures, airport terminal buildings, residential buildings, etc to cater to the growing structural steel demand in the country.

Over these years, Kirby India has evolved from a mere manufacturer of PEB to a total solution provider that is capable of supplying a packaged solution for all building requirements maintaining international quality standards and fulfilling the entire customer demand.

Like a true leader, it has constantly tried to set new standards in the PEB industry. Its buildings have even stood the test of time, time and again against all odds – manmade and natural.

Deepesh Nagar Kirby Building System India

EQUIPMENT

The construction machinery and operator hire industry in Australia generates the bulk of its revenue from work on commercial building and apartment construction projects. These projects involve cranes, pile-driving and pumping equipment to erect multi-storey buildings or install heavy structural components (eg steel girders, precast concrete panels and beams, and concrete pours).

However, according to IBISWorld industry analyst Anthony Kelly, “The industry’s largest players typically focus on servicing the mining and infrastructure markets, including the erection of telecommunication and power transmission equipment, pipelines and wind turbines.”

In 2013-14, the industry is expected to generate revenue totalling $2.7 billion and grow 3.3 per cent due to a surge in demand for cranes for use in high-rise apartment developments and office complexes. “However, since the late 2000s, the industry’s performance has reflected Australia’s two-speed economy,” said Kelly.

Industry revenue is projected to decline by an annualized 2.4 per cent over the five years through 2013-14 due to weak demand from the commercial and industrial building market, and particularly the slump in office construction, which is the most important market for high-rise cranes.

In 2013-14, the indust ry is

projected to directly employ about 13,500 people in 2,180 businesses, although the total workforce also inc ludes work ing propr ie tors , subcontractors (eg crane operators, riggers and dogmen) and professional consultants (engineers).

The construction machinery and operator hire industry has a low level of market concentration, with Boom Logistics Ltd, Tutt Bryant Group Ltd and Freo Group Pty Ltd the only major players.

The continued cyclical upswing of investment into the commercial building and apartment markets is forecast to drive industry revenue up by 4.1 per cent in 2014-15, underpinning revenue growth.

This expansion will be supported by solid growth in the value of total building construction and particularly the upswing in office construction over the next five years.

Dec 30, 2013-Jan 05, 2014 11

Gotthard base tunnel runs with 900 days to opening

Atkins designs 36-storey hotel for Ho Chi Minh City

A milestone has been reached in construction of the Gotthard Base Tunnel with the start of pilot operations in the west tube. A train has travelled this week under the Alps along the 13km-long pilot section from Bodio to Faido at a speed of 160km/h. Running of the test train took place 900 days ahead of the inauguration of the world’s longest railway tunnel in June 2016.

Atkins has completed the design of the Lavenue Crown Hotel in Ho Chi Minh City, the largest city in Vietnam. The flagship project for Lavenue Investment Corporation is designed to reflect the form of the lotus flower and is set to become

The purpose of pilot operation is to obtain preliminary confirmation that the entire tunnel system meets the specified requirements. Tests will be conducted of the interplay between the various processes, systems and equipment such as the track, overhead conductor, power supply, tunnel infrastructure, train control and safety, as well as operational communications. Construction of the

a landmark on the city’s emerging skyline.

The 36-storey development will become home to a luxury five-star Langham hotel, a boutique retail mall, serviced apartments and a spectacular sky bar upon completion.

new rail link through the Alps involves the creation of base tunnels under the Gotthard and Ceneri.

The new railway link crosses the Alps with minimal gradients and wide curves to allow efficient rail transport of goods as well as shorter journey times in national and international passenger traffic. Completion of the Ceneri Base Tunnel is due at the end of 2019.

The tower is approximately 160m high with a total gross floor area of 66,000m2. It features four petal-like facades that extend down to provide a series of canopies and up to shelter the roof terraces of the sky bar.

Vinci starts building France’s longest offshore viaduct

Italian team wins $340 m Sydney sky train

Vinci has begun construction on Reunion Island of two major highway contracts with a combined value of

1.245 billion. Both are for the Nouvelle Route du Littoral coastal highway. One of the two contracts, led by Vinci, involves building France’s longest offshore viaduct and the other, which is led by Colas, is for a 3.6 km causeway and an interchange.

The project that includes the 5.4 km viaduct will be built by a consortium of Vinci Construction subsidiaries led by Vinci Construction Grands Projects. The other team members are Dodin Campenon Bernard, Bouygues Construction subsidiary Bouygues Travaux Publics and Demathieu Bard.

The offshore viaduct will connect Saint Denis -- the administrative

Impregilo-Salini joint venture has won AU $340m (£180m) construction contract for a 4km elevated ‘skytrain’ in Sydney, Australia. The contract includes a 270m cable-stayed bridge which is the second of three major contracts awarded for the North West Rail Link.

I t fol lows June’s award of a AU$1.15bn contract to build Australia’s longest rail tunnels, 15km twin tunnels

capital of La Réunion -- with La Grande Chaloupe. The new offshore coastal highway will replace the existing coastal road between Saint Denis and La Possession, which is exposed to falling rocks and flooding by swells and tropical storms. Work on the 715 million viaduct will be completed in 2018. The solution put forward by the consortium involves prefabricating 95 per cent of the structures on land.

Work has also begun on a 530 million dyke and interchange at La Possession as part of the same road scheme. The work will be carried out by a consortium including Colas’ Reunion-based company GTOI, which is project leader (60 per cent), SBTPC, a Vinci Construction Reunion Island subsidiary and Vinci Construction Terrassement.

between Bella Vista and Epping. The skytrain and new bridge would be the most visible elements of the 36km North West Rail Link project and a key priority has been to ensure final designs are integrated with their surroundings.

It is a full steam ahead as 16 construction sites being set up right across the North West to deliver this project by the end of 2019.

INTERNATIONAL

Leighton has won $100 m rail deal

Leighton has won AU$100m (£53m) contract to build a train support facility for Aurizon, Australia’s largest rail freight operator. The new facility at Hexham in New South Wales will support operational management of Aurizon’s coal haulage fleet in the Hunter Valley and provide servicing, routine maintenance and provisioning of fuel, water and other supplies.

It will also include shunting and

temporary stabling areas designed to alleviate local rail network capacity pressures. The project involves construction of the train provisioning facility, a combined maintenance bui ld ing, s ignal ing and power infrastructure, 26 turnouts and 11km of track works.

Leighton Holdings CEO Hamish Tyrwhitt said, “The project, which involves civil, track and other expertise,

demonstrates the Leighton Group’s diverse skills and its capability in delivering rail transport infrastructure that is vital to the country’s growth.”

The train provisioning facility and associated track infrastructure is expected to be completed in late 2014. The combined maintenance facility and remaining track work is expected to be complete in March 2015.

Oslo airport contract for Veidekke

Editor : Bina VermaEditorial Team: Dilip Phansalkar, Paresh Parmar, Remona Divekar Designer: Rajen Mistry

Business Team: Milind Joglekar (9833357005), Shantanu Baraskar (9820904795), Seema Kohli (9820904931)Email: contact@konstructionreview.com, editor@mmronline.com

No part of the contents of Construction Industry Review, in abridged or unabridged form, can be reproduced without the written permission of the Editor. CIR does not accept any

responsibility for statements and opinions expressed by the authors.

Veidekke has signed a contract with Oslo Lufthavn to provide aircraft stands and infrastructure around the new pier at the main Oslo airport in Norway. The value of the contract is approximately NOK370m (£36.7m).

There is considerable ground and foundation work to be done in connection with the 11 new aircraft stands for the north pier. New load-bearing and reinforcement layers must be established, as well as approximately 35,000m2 of new taxiways with lights and three layers of asphalt.

Approx imate ly 42,000m2 of concrete slabs wil l be poured, most of reinforced concrete with a

snow melting system. The technical installations will cover everything from a fuel plant to cable ducting systems and concrete chambers for services such as power and water.

Veidekke will also build a thermal energy snow storage facil i ty of 15,200m2 with asphalt troughs and a pumping station of concrete poured on site. This part of the contract also includes M&E installations as well as water and sewage systems with pipes, gutters and chambers for collecting surface water.

The system for cooling for the new pier is a pioneering project in Norway. Building work starts in March and is due for completion in October 2016.

Dec 30, 2013-Jan 05, 2014 12

EVENTS

Registered with the Registrar of Newspapers for India under No. MAHENG/2012/41844 Posted at Mumbai Patrika Channel Sorting Office, Mumbai - 400001, on Monday Published on Monday, December 30, 2013

Regd. No. MH/MR/South-355/2012-14

NEwS

Plastivision India 2013 garners business worth `1,500 cr

Printed & published by Bina Verma on behalf of Asian Industry & Information Services Pvt. Ltd., and printed at Amruta Print Arts, 205, Tantia Industrial Estate, J. R. Boricha Marg, Opp. Kastruba Hospital, Mahalaxmi, Mumbai 400 011 and published at 1st Floor, Feltham House, 10, J. N. Heredia Marg, Ballard Estate, Mumbai 400 001. Tel.: 022-2266 0623. Editor: Bina Verma Annual Subscription : Rs. 5,000/-

January 03-05, 2014Infratech YMCA Club, Ahmedabad This exhibition will give a unique opportunity to technical experts, professionals related to steel, cement, power and mining industries to become aware of modern market trends and latest business opportunities and strategies associated with these sectors which will help in the overall betterment of these sectors.

Contact: Event Manager, 33 New Yourk trade Center, Nr. Thaltej Circle, SG-Highway, Ahmedabad

Tel: +91-9099909825

Mob: +91-9227688026

February 13-16, 2014Constro 2014International Exhibition on Construction Machinery, Material Methods and Projects, Pune Contact : Sharad Bavadekar, Chairman, Constro-2014, Pune Construction Engineering Research Foundation (PCERF), 6 Shriniwas Building, Patwardhan Baug, Erandwane Co-Op Hsg. Society, Pune 411 004

Telefax: 91-20-2544 7356 / 2544 7748

infoconstro@gmail.com

www.constroindia.org

February 21-23, 2014 PlumbexIndiaBombay Convention & Exhibition Centre, Mumbai This show will be an ideal platform for participants to showcase their latest products and services related to the building and construction sector.

Contact: AIM Expositions Pvt. Ltd. AIM House, 78 Pankaj Society, Near Anjali Cross Roads, Bhatta Ahmedabad

Tel: +(91)-(79)-40269999

Fax: +(91)-(79)-26620020

Contact person: Pooja Patel

Tel: +91-79-26620020

February 26-28, 2014iBART EXPOGujarat University Exhibition Hall, AhmedabadOne of the leading trade fairs for the building construction industry in India, which will showcase the latest products and equipment in brick, roof and tile category.

Contact: Gattaca Communications Communications House, 26 York Street, London, United Kingdom

Tel: 044-2032-395572

Fax: 044-1538-398987

March 13-15, 2014Concrete Show – 2014Concrete Material & Machinery, Mumbai Contact: UBM India, Unit No. 1&2, B-Wing 5th floor, Times Square, Andheri-Kurla Rd, Marol, Andheri (E), Mumbai - 59.

Phone: +91-22-61727272

Fax: +91-22-61727273

info.india@ubm.com

www.ubmindia.in

March 20-22, 2014International Elevator & Escalator ExpoBombay Convention & Exhibition Centre, Mumbai The event provides an exclusive platform to get an insight into the market, trends and technologies that drive the elevator and escalator industry. The forum, apart from fostering thought leading insights from the stalwarts of the industry, also dwells extensively on leading edge technological advancements to the most contemporary design trends, safety standards, environment compliance codes and regulations.

Contact: Virgo Communications & Exhibitions Pvt Ltd Virgo House, 250 Amarjyoti Layout, Domlur Extension, Bengaluru

Tel: +(91)-(80)-25357028/41493996/41493997

Fax: +(91)-(80)-25357028

Contact person : G. Raghu

Mob: +91-9845095803

May 16-18, 2014Roof India 2014 Chennai Trade Centre, Chennai The 13th edition of Asia’s largest roofing and allied products event provides the ideal platform for the building construction and infrastructure industry fraternity to converge, network and strike lucrative business deals and establish business partnerships and joint ventures.

Contact: International Trade & Exhibitions India Pvt Ltd 4th Floor, Sekaran Complex, Plot 172-173 IT Expressway OMR , Thoraipakkam Chennai 600097

Mobile: +91 98400 43691

Email : sudeep@itei.in

URL : www.itei.in

Plastivision India 2013 (Mumbai, Dec 12-16) witnessed a grand response from the plastics industry, where more than 110,000 visitors attended the exhibition and recorded a participation from more the 1225 exhibitors from over the world.

Plastivision India was spread over 75,000 sq meters area covering 9 halls. The fair showcased various innovations and technologies from the plastics industry. The ninth edition of Plastivision 2013, organized by the All India Plastic Manufacturers’ Association, was inaugurated by Indrajit Pal, Secretray (Chemicals & Petrochemicals), Department of Chemicals & Petrochemicals, Ministry of Chemicals & Fertilizers in the presence of Avinash Joshi, Jt Secretary, Petrochemical Division, Ministry of Chemicals & Fertilizers and Saif Mohammed Al Midfa, CEO, Expo Centre Sharjah.

The show had dedicated pavilions like Indiamold, Plastiworld, Plastics in agriculture, automation and robotics in plastics pavilion, Green pavilion, solar energy pavilion and plastics in medical pavilion.

One of the areas where more at tent ion was focused is b io-degradable plastics.

S p e a k i n g o n t h e f i v e - d a y international event, Raju Desai, Chairman of the Plastivision India 2013, said, “We are humbled by the positive response that we have received this year at the exhibition and are very optimistic about the growth reaching new heights. The event has successfully generated a business of Rs 1,500 crore this

time, bringing 50 per cent growth when compared with business of Rs 1,000 crore, recorded at the previous Plastivision. We are hopeful to receive all the required support from the government that would facilitate the further growth of the plastics industry”.

T h e g o v e r n m e n t i s a l s o encouraging the set t ing up of plastics parks in various states to help the growth of the plastics industry, which is so important for the economy as well as employment generation. The ministry has already cleared two plastics parks, one in Madhya Pradesh and another in Orissa, and some funds have already been disbursed. Some more parks are under consideration.

The AIPMA President Anand Oza said, “Our aim is to emphasize the needs of the government to promote policy changes, and better development of the industry.”

(L- R) Raju Desa, Chairman, Plastivision India 2013; Anand Oza, President, AIPMA; and Arvind Mehta, Chairman, Governing Council, AIPMA

He pointed out that p last ic waste and innovative ways and infrastructure construction, the government and the industry should work together. Mumbai AIPMA to apply for $3.9 billion investment in the country to build more plastics park area

Plastivision is India’s second largest plastics exhibition, the last show was held in 2011. Compared to 2011, this year India’s economy is full of a lot of uncertainty. President of the National Advisory Committee Plastivision Arvind Mehta said the slow growth of the plastics industry in India is because the Indian economy as a whole, which is facing some problems.

However, he also pointed out that the Indian Oil Corporation on the line after the new capacity will soon be absorbed by the market, from that point you can see the Indian plastics industry continues to grow.