After a slowdown in road projects last year, the road construction sector in India has picked up in 2012. With NHAI awarding new projects under the public-private partnership programs and the projects execution picking up from last year, the Indian construction industry is looking at making up for lost time with a flow of funds and EPC (engineering, procurement and construction) contracts in 2012. The effect of the sudden surge in demand for Construction Machinery, Building Material Machines, Mining Machines and Construction Vehicles is being witnessed in the participation of Indian and global players at bC India - A BAUMA CONEXPO SHOW, the International Trade Fair of the construction industry, that expects to feature around 700 exhibitors and over 40,000 trade visitors from around the world.
The NHAI awarded about 4,375 km of roads in the first nine months of 2012, as against 4,553 kms during 2011, 3,338 km during 2010 and 643 km in 2009. The third quarter of 2012 itself saw about 1,898 km of projects being awarded.
Notably, the new road projects are part of the Rs. 3 lakh crore (US$ 70 billion) National Highways Development Program (NHDP) aimed at developing 50,000 km of national highways in seven phases by 2015. Phase I & II comprises 14,145 km of connecting and upgrading of the highways between the four metropolitan cities – Mumbai, New Delhi, Chennai and Kolkata – also called The Golden Quadrilateral (GQ); connecting Srinagar with Kanyakumari; Silchar with Porbandar, 12 major ports and several other important national highways. Phase-III involves upgradation of 12,109 km of national highways between state capitals, important tourist places and economically important areas. Phase IV comprises two-laning of 20,000 km of single/intermediate/two-lane National Highways. Phase V comprises upgradation of 6,500 km of existing four-lane highways and other selected stretches. Phase VI develops 1,000 km of fully access-controlled expressways, and Phase VII will construct stand-alone ring roads, bypasses, grade separators, flyovers, elevated roads, tunnels, road over bridges, underpasses, and service roads across the country.
As the market gears up to the sudden surge of new road projects, EPC contractors and construction equipment companies are struggling to maintain their order-book growth. Many are preferring to enter the PPP format by undertaking projects on build-operate-transfer (BOT) basis and several are forming special purpose vehicles (SPVs) to execute projects.
Hectic project management, equipment hiring and sub-contraction are leading construction companies to look for technological advanced and efficient solutions for project execution. The sector is showing increased interest in ready-made platforms that share technology updates in construction equipment from across the world. Indian and international construction equipment players are hence exhibiting at the BAUMA CONEXPO SHOW - bC India 2013, to showcase their equipment and attract buyers from the Indian construction industry.
Scheduled from February 5 to 8, 2013 at the Bandra Kurla Complex in Mumbai, bC India is expecting an increased participation from construction companies. The show’s 2011 premiere had attracted a total of 508 companies from 36 countries and close to 25,000 trade visitors from 71 countries. This year though, the show, spread over 150,000 square meters, will host around 700 exhibitors from around the world and an expected number of around 40,000 trade visitors from India and its neighboring countries.
Looking at participation at bC India, it is clear that new domestic companies are planning to make forays into road construction, and Indian market will witness entry of international companies. With over 90 players having pre-qualified for NHAI projects, indicating a highly competitive scenario, the road sector, and resultantly the construction industry in general, is expected to undergo changes in the next few years.