construction industry 22-08-11

8/2/2019 Construction Industry 22-08-11

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Infrastructure in India is key to realizing the' ,

financing and hesitant overseas investmenthave slowed development in the sector,

powerhouse. - Reuters


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89th out of 133 in overall infrastructure accordin tothe World Economic Forum;

90th for ports, where the turnaround time for ships is

. , 65th for air transport; and

106th for quality of electricity supply. No Indian city

receives water for 24 hours a day.The Japan Times, Friday, Sept. 3, 2010

Lack of infrastructure costs the economy between 1.5% and 2% of GDP per.


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As on 30th April, 2011, 560 Central Sector projects costing Rs.150 crore and above were on the monitor of the Ministry ofStatistics and Programme Implementation, out of which 251

projects were delayed with respect to their approved schedule.

Total anticipated cost involved in these delayed projects is. , . . , .

crore. Cost over-run: Rs.70,167.3 crore (23.45%)

rehabilitation related issues, forest clearances,

environment/wild life clearances, removal of encroachmentsand availability of Right of Way (ROW), ensuring law andorder at project sites, etc. Source: Press Information Bureau, GOI.

As on October, 2010, out of the 559 projects, 14 are ahead ofschedule, 117 are on schedule and 293 are delayed (Eco survey, Feb. 2011)


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An integral part of a countrys infrastructure and economic development and anessential contributor to the development process.

2nd largest economic activity in the country next to agriculture.

One of the oldest industries, which provides infrastructure to all other industries.

Creates the physical foundations of economic development and improves thestandard of living of a society.

.

Maximum linkage effect - generated employment for 33 million people in thecountry

Aroun 16% o t e nations wor ing popu ation epen s on construction or itslivelihood.

Accounted for about 35-40% of the development investment of India during thelast five decades.

Contributed 78% of the Gross Capital Formation.

As er India Brand E uit Foundation's re ort the lobal construction market is

worth about US$ 3.4 trillion.


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utput: serv ces prov e are eterm ne y t e c ents an are per orme a atime and place specified by the clients. Contractors have a little control only on

the demand for construction services. Temporary nature of employment:

Employees work in groups: Due to the unskilled nature of work workersencourage their womenfolk and children to help increase output. They consider

their work as a family assignment. Pricing: Clients

Financin : The financin of the construction services is outside the control ofcontractors.

Registration: To secure work, a company has to be on the approved list ofcontractors maintained b the overnment.

Payment:

CONSTRAINTS OF INDIAN CONSTRUCTION INDUSTRY


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India is one of the largest and most dynamic infrastructure and projectfinance markets in the world with the total number of project basedSpecial Purpose Vehicles (SPVs) at around 800.

US$ 1 trillion opportunities for global investors over the next five years. e governmen as announce cons ruc ng , m o g ways y

2014 for which it has estimated an investment of over US$ 67 billion.

During 2010-11, 50 road projects of 5,060 km were awarded, while around

15,450 kms. of national highways have been completed under the NHDPuntil March 31, 2011.

,contracts in 2011 worth about US$ 12 billion.

The capacity of Indian ports during 2010-11 crossed 1 billion tons perannum.

Foreign direct investment (FDI) inflow into ports has been registered atUS$ 1.64 billion from A ril 2000 to A ril 2011.

The FDI inflow into air transport (including air freight) has been recordedas US$ 373.06 million from April 2000 to April 2011.


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India's forei n exchan e reserves have touched US 316.80billion for the week ended July 22, 2011.

The ross direct tax collections in A ril-June this ear were uby 23.91 % at Rs 1,04,136 crore (US$ 23.52 billion) as against

Rs 84,041 crore (US$ 18.98 billion) during the same period ayear-ago.

Indian economy will become a $5.6 trillion economy by fiscal, rom e . r on n sca - .

Infrastructure sector spending is expected to rise to 12.1 per.

A report by McKinsey Global Institute says that India will

cities with more than 4 million people, and 6 megacities withpopulations of 10 million or more.


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NATIONAL RIVER LINKING PROJECT (NRLP) to artificially link 14 Himalayan rivers in northern India and 16 peninsular

.

NRLP could help mitigate regional imbalances caused due to frequent floods

and droughts. The project would also lead to fresh inland navigationalroutes, and create millions of hectares of irrigated land. Abandoned.

KALPASAR PROJECT

- ,

Bhavnagar district in Saurashtra to Aladar in Bharuch district of south Gujarat. The 10-lane road link proposed to be set up over the dam would significantly reduce

waterway route.

The reservoir formed by the dam will include a freshwater basin and a tidal basin. e , -sq m res wa er a e wou co ec an s ore wa er rom seven ey r vers

in Gujarat and be used for irrigation, drinking and industrial purposes.

Other benefits would include reclamation of saline land, recharging of groundwatereve s an eve opment o tourism.

The tidal basin has the potential to generate 5,000-6,000 Mw of tidal electricity.Environmental concerns and technical complexities are still being investigated.


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,, -- when fully commissioned by the Nuclear Power Corporation,

largest nuclear power plant in the world.

that will also supply the reactor units, reported to be thelargest in the world. The total cost of the project is about $18

billion. The government has planned five such nuclear parks, each

with a 10,000 Mw capacity, at various locations including thisfirst one at Jaitapur in Mahrashtra.

n a p ans o ncrease s nuc ear genera on capac y o63,000 Mw by 2032.


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SAMUDRA SETUSAMUDRA SETU--INDIAINDIA--SRI LANKA BRIDGESRI LANKA BRIDGE

bridge linking Talaimannar in Sri Lanka to Dhanushkhodi inIndia.

It is a four-lane bridge along with a single railway line. In

addition to promoting tourism and trade, the project is likelyto open s gn cant nvestment opportun t es an prov eaccess to various transhipment sea-ports in Sri Lanka.

n eres ng y, s pro ec was rs conce ve n e ear y1900s. A rail line was constructed by India till Dhanushkodiand b Sri Lanka till Talaimannar.

However, the two sides were on different gauges at that time

and the connectin sea-brid e could not be built. Mention of the project evokes mythological and

environmental passions, but now with the LTTE threat over,

and a re-energised Sri Lanka, it is appropriate to reconsider it.


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WESTERN DEDICATED FREIGHT CORRIDOR

The Western Dedicated Freight Corridor (WDFC) extends1,534 km from Jawaharlal Nehru Port (JNPT) to Dadri viaVadodara-Ahmedabad-Palanpur-Phulera-Rewari.

The corridor will cater to container traffic between the west-coast ports an t e nort ern nter an .

This route contributes 50 to 60% of total container traffic at alln an por s an s curren y p ague w ow ra s are ue

to saturation in line capacity.

-to 25T axle loads at speeds of 100 kmph is likely to result in

si nificant cost and time savin s b shiftin container trafficfrom road to rail, double stacking of containers and fastermovement.


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DELHI MUMBAI I DUSTRIAL CORRIDOR

The Delhi Mumbai Industrial Corridor (DMIC) is envisionedas a " lobal manufacturin and tradin hub" with aninfluence area of 150-200 km on both sides of the proposed

1,534 km Western Dedicated Freight Corridor (WDFC). The project aims to expand the manufacturing and services

base in the region through development of internationalqua y, nves men r en y, n egra e nves men reg onssupported with high quality road and rail connectivity to andfrom orts and lo istics hubs.

Once complete, the development is expected to double

em lo ment, tri le industrial out ut and uadru le ex ortsfrom the region over a five-year time frame.


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EASTERN DEDICATED FREIGHT CORRIDOR (EDFC)

e exten s , m rom an un toLudhiana via Sonnagar-Mughalsarai-Kanpur and, like

, s es gne to carry up to ax e oa s at

speeds of 100 kmph.In addition to reducing the time and cost for container

movement, it is also likely to boost industrial growth

along the corridor since it passes through variousindustrial clusters and provides a direct link forcarrying raw and finished goods from industrial

clusters to west-coast sea ports via the connection tothe WDFC at Dadri.

It will also service u to 75% of the demand for coal for

power plants in the eastern and northern region.


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MUMBAI AS AN INTERNATIONAL FINANCE CENTRE (IFC)

s propos on as een presen e very orce u y an pro ess ona y ythe ministry of finance in an elaborate report.

The finance minister himself had stron l endorsed the idea at a well-attended gathering in Mumbai in the summer of 2007.

The idea is for Mumbai to replicate a London, New York or Singapore;an prov e compe on o o er asp ran s e ang a , u a , ar s,Frankfurt and Tokyo. The exorbitant cost of real estate in Mumbai is a biginhibitor.

One suggestion floating around is to turn Mumbai into a SpecialAdministrative Region like Hong Kong.

s wou re ease a urs o energy - a m n s ra ve, nanc a anpolitical.

The central olic focus needs to be on the em owerment of the citgovernment to take economic and service-delivery decisions, asenvisaged in the 74th Amendment, and realigning central and state

.

Finally, the new airport would help too!


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(TRIPURA) ROAD CORRIDOR

Chittagong, an international sea port in Bangladesh,

is only about 75 km from Tripura's border townSabroom.

Efforts to im rove road and rail connectivit

between Sabroom and Agartala are already atvarious sta es of im lementation.

The link will boost trade from the whole of north-

-besides increasing cooperation between India and


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Years Average GDP growth %1950-80 3.5

1980-92 5.5

1992-2003 6.0

2003-10 8.5


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Per capita income has shot up from $300 in 1991 to almost $1,700 today

in 1991 the then Finance Minister Manmohan Singh's first budget brought the

maximum import uty own -- to a sti w opping 150 per cent. Ear ier it was ashigh as 300 %.

Today the standard import duty is down to 10 per cent, and the effective rate formany items is around 7 per cent, close to the average for Southeast Asiancountries.

The savings rate shot up from 21.5 per cent of GDP in 1991-92 to around 34 percent in 2010-11, enabling investment to rise from 22.1 per cent of GDP to around 37per cent.

Foreign Direct Investment as a proportion of GDP, India (0.9 %) has beaten China

(0.6 %). In 2009-10 the aid inflow was $5.9 billion, but this paled in comparison with

forei n investment e uit lus ortfolio inflows of $51.2 billion, commercialborrowings (which were $68.2 billion gross and $10.4 billion net) and remittancesfrom overseas Indians ($53.9 billion).

FDI eaked at $26 billion in 2009-10 and declined to $19.4 billion the next ear. since 1991, India's literacy rate has shot up by a record 21.83 percentage points to

74.04 per cent.

, ,

has declined from 45.3 per cent in 1993-94 to 32 per cent in 2009-10.


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India holds the world record for legal case backlogs (31.5 million) which will take320 years to clear according to Andhra Pradesh High Court Judge.

very sec or n n a nc u ng cons ruc on comp a ns o ay o a a ourshortage, but the biggest bottlenecks are in skilled labour.

In enforcement of contract, India ranks a shocking 182nd of 183 countriesaccor ing to t e Wor Ban . It's ca e a mirac e economy, ut t e rea mirac e ishow it manages to grow fast despite such a flawed institutional base.

Corruption Perception Index of Transparency International ranks India 87th out of178 countries, behind China (78th) but well ahead of Bangladesh (134th) andPakistan (143rd).

India has actually improved its score slightly over the years, from 2.7 out of 10 in2002 to 3.3 in 2010.

In the 2009 elections, 150 of 542 seats were won by politicians with criminal

records, including cases of murder, rape, and theft. This was up from 128 suchpoliticians in the 2004 elections.

Real estate developers, who need to pay around Rs 25,000 crore (Rs 250 billion) ondebt instalments in the current financial ear, could face an u hill task. For, e uitissuances remain uncertain and cash flows have dwindled.


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. n e a es

Debt: $14.590 trillion (9 August 2011)Per capita debt: $46,929Debt as in percentage of GDP: 94%

The United States has the world's highest external debt at a whopping. .

2. United KingdomDebt: $8.981 trillion

er cap ta e t: ,Debt as in percentage of GDP: 400

3. German

Debt: $4.713 trillionPer capita debt: $57,755

4. France

Debt: $4.698 trillionPer capita debt: $74,619

Debt as in percentage of GDP: 182 A crisis is imminent in France as its budget deficit is 6 per cent of gross domestic product.


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Sr. Revenue in No. of %

No. Rs. Crores Companies1. 2000 and above 14 1.08

. .

3. 500 to 999 27 2.08

4. 100 to 499 50 3.86

5. 50 to 99 32 2.396. Less than 50 1159 89.36

.


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um ers n s age

in 2005

.

Technicians & 573 1.85

Foreman etc.

Clerical 738 2.38

e wor ers .

Unskilled workers 25600 82.45

.


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Monetary Requirements:

- For Construction Materials: Rs. 495,000 crores- For Construction Equipment: Rs. 180,000 crores

- Manpower: Rs. 108,000 crores

e a e equ remen o a er a s

- Cement: 381 Million tones

- Steel: 150 million tones

Manpower: 92 million man years

- Engineers 3.72 million man years- Technicians 4.32 million man years

- Support Staff: 3.65 million man years

- e or ers: . m on man years

- Unskilled/ Semi skilled workers: 56.96 million man years


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Company Name Directors remuneration.

Larsen & Toubro Ltd. 56.46

D L F Ltd. 16.64IVRCL Infrastructures & Projects Ltd. 15.60

Lanco Infratech Ltd. 14.64

Unitech Ltd. 8.41

Jaiprakash Associates Ltd. 7.92

. . .

Punj Lloyd Ltd. 4.41

Gammon India Ltd. 2.53Simplex Infrastructures Ltd. 2.46

Era Infra Engg. Ltd. 1.25

Alstom Projects India Ltd. 1.22

Ircon International Ltd. 0.71


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Construction in ustry contri utes more t an 5% to t enation's GDP and 78 per cent to the gross capital formation.

.touching 8,02,087 crores in 2011-12 from 1,43,587 crores1999-2000 .

The share of the Indian construction industr in total rosscapital formation (GCF) came down from 60 per cent in 1970-

71 to 34 per cent in 1990-91. Thereafter, it increased to 48 percent in 1993-94 and stood at 44 per cent in 1999-2000.

In the 21 st century, there has been an increase in the share ofthe construction sector in GDP and capital formation.


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6231172

5574448

GrossDomesticProduct4283979

4947857

inRs.Crore

31494073239224

3706473

22789522454561

2754620

1072118445

49523

170805

654729

ReserveBankofIndia


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The Indian construction industry comprises 200 firms in the. ,

1,20,000 class A contractors registered with various government

construction bodies. There are thousands of small contractorswhich compete for small jobs or work as sub-contractors of primeor other contractors.

Total income of construction industry have reached Rs. 4,15,189crores in 2009-10 from Rs.1,25,785 crores in 2004-05.

PAT have reached Rs. 35,683 crores in 2009-10 from Rs. 14,546crores in 2004-05.

Total assets have reached Rs. 11,20,077 crores in 2009-10 from

Rs.3,20,957 crores in 2004-05.


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GrowthofConstructionIndustry inRs.Crore1120077.18

5,62,560

747979.61

TotalIncome Profitaftertax Totalassets

417142.56

552181.79

415188.8

36704.07

21,593

35682.53

320957.29

177449.37225513.95

301538.09

2,30,607

14545.96

17189.11.

.

200506 2006

07 2007

08 2008

09 2009

10


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evenue n s. rores

2009-10 2008-09 2007-08 2006-07 2005-06

Larsen & Toubro Ltd. 39639.37 36458.38 26050.33 18576.17 15671.02Lanco Infratech Ltd. 5998.23 4097.66 1603.62 553.41 152.75

Jaiprakash Associates Ltd. 12084.08 6496.89 4615.74 3830.79 3908.93

I V R C L Ltd. 5578.71 5083.35 3771.19 2379.1 1538.21

N C C Ltd. 4895.98 4221.43 3518.13 2913.8 1851.78

Essar Projects (India) Ltd. 4838.22 3456.7 2210.33 1643.24 1209.28

Simplex Infrastructures Ltd. 4475.77 4717.34 2845.63 1725.71 1349.86

Hindustan Construction Co. Ltd. 3474.37 3208.69 2694.15 1886.12 1576.19

Gammon India Ltd. 4749.53 3820.85 2391.78 1914.33 1502.55

ate ng neer ng t . . . . . .


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TotalIncomeofRealEstateSector


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Top sectors

destination for foreign investors. The sector attracted USD4.4

billion FDI in FY10 (USD2.1 billion in the first half of FY11).

Housing and real estate sector attracted the second-highest .

in 200405 to US$ 2.8 billion in 200910.

In FY10, power sector witnessed the highest growth (58%) inattracting foreign investments over FY09 followed byconstruct on act v t es an ous ng rea estate .

n pr- ep , serv ces sec or s are n s oo a

followed by telecommunications (9%) and metallurgicalindustries 8% .


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construction industry 22-08-11

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