Cm magzine april 2017 final

April 2017

Volume IV Issue VI

Page 80

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An Outlook of the Construction Equipments & Infrastructure Industry www.constructionmirror.com

Interview Pg No- 58-60 Asit Patel Managing Director

Industry Features : Roofing and Cladding industry: Market size, Trends and Challenges Special Future: Application of CRGO & CRNGO Focus : Construction Chemicals: Market Size and Future Outlook Guest Article : Turning future of INDIAN AIRPORTS Guest Article: Volvo CE Crowns Its Operator Champion For India

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Cover Story

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Special Column

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Government Plans to Sell Non-Operational Units of Cement Corporation of India

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Turning future of INDIAN AIRPORTS

Focus:

Application of CRGO & CRNGO

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Eicher Trucks & Buses Introducesamt Technology In Commercial Vehicles

Guest Article

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Roofing and Cladding industry: Market size, Trends and Challenges

Special Future

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Volvo Buses Rolls Out Next Generation City Bus with BMTC

Guest Article

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Construction Chemicals: Market Size and Future Outlook

Industry Features

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Smart Meters to change Consumer Behaviour

Guest Article Guest Article:

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Dimitrov Krishnan Vice President & Head of Volvo CE India

Indian Airports, Aviation Industry Overview

News Update

Asit Patel (Managing Director) Ammann Apollo India Pvt. Ltd

Interview

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Interview

S T N E NT

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Shriram Automall Inaugurates Its Fantastic New Automall Facility In SaharanpurÂ

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Event Diary Advertisement Index

News Cement

Government Plans to Sell Non-Operational Units of Cement Corporation of India

The government today said it is planning to sell

off non-operational units of Cement Corporation of India (CCI) as part of strategic sale of loss-making companies.

“As far as CCI is concerned, non-operating units of CCI are to be disinvested first as a part of strategic disinvestment of CCI,” Minister of State for Heavy Industries and Public Enterprises Babul Supriyo

said in a written reply to the Rajya Sabha.

He said the inter-ministerial group has identified five units for disinvestment in the first phase - Mandhar, Kurkunta, Bhatinda, Nayagaon, Charkhi and Dadri.

The legal issues relating to Delhi Grinding Unit (DGU), Adilabad and Akaltara need to be sorted out, he added.

The process of appointment of Transaction Advisor, Legal Advisor and Asset Valuer has been started by CCI as per direction of the group, he said.

Niti Aayog has recommended for strategic disinvestment of Cement Corporation Of India.

To start with, all seven non-operating units and the non-commissioned unit of Bhatinda are to

be divested first and thereafter disinvestment of operating units is to be taken up.

“The units being considered under disinvestment at present are closed and workers are not there. The amount expected as sale proceeds shall be known after asset valuation of non-operating units,” he said.

Replying to a separate question, the minister said so far an amount of Rs 49.98 crore has been disbursed under different components of the scheme for the capital goods sector.

Under the Capital Goods Scheme, so far 14 proposals have been approved, he said.

“Out of these four pertains to Centre of Excellence for technology development by eminent institutions like Central Manufacturing Technology Institute, Indian Institute of Technology (IIT), Madras, PSG College of Technology, Coimbatore, Scientific and Industrial Testing and Research Centre, Coimbatore,” he added

Cement Demand Improve to 5% in FY18 An expected revival in the infra space may help the Cement demand to grow to around 4 to 5 per cent in the next fiscal, according to rating agency ICRA. The agency said that FY2016-17 would be a flat year for the sector as demonetisation had a negative impact on real estate and construction activities and the situation is likely to normalise from the first quarter of FY 2017-18 onwards.

ICRA is expecting an uptick in demand from road and irrigation projects and the housing segment next fiscal, which would support the cement prices going forward.

ICRA is expecting an uptick in demand from road and irrigation projects and the housing segment next fiscal, which would support the cement prices going forward.

Meanwhile, it also added that rising costs as transportation is likely to put pressure on the profitability for the next few quarters.

“ICRA expects cement demand growth to recover to around 4-5 per cent during FY2018, driven by a pick-up in the infrastructure segment,” ICRA Ratings Senior Vice President & Group Head Sabyasachi Majumdar said.

The increased budgetary allocation for infrastructure sector, which includes roads, railways, metro, irrigation and housing, during FY 2017-18 will support cement demand 8

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“Also, higher rural credit and increased allocation for rural, agricultural and allied sectors, including the demand for rural housing, are significant contributors to the overall cement demand mix,” he said.

“Also, higher rural credit and increased allocation for rural, agricultural and allied sectors, including the demand for rural housing, are significant contributors to the overall cement demand mix,” he said.

According to the agency, cement volumes during November 2016 to January 2017 declined by 8 per cent as against their corresponding period impacted by the demonetisation.

“All-India cement production reported a moderate growth of 1.1 per cent in 10M FY2017 to 233 million MT, with the growth rate being lower than the 3.6 per cent witnessed in 10M FY2016,” said ICRA. The agency is expecting demand during the current fiscal to remain flat.

“While in the short term, demonetisation has had a negative impact on real estate and construction activities and hence on the cement off-take, the impact is expected to subside and the situation is

likely to normalise from Q1 FY2018 onwards,” said Majumdar.

Energy and freight costs are under pressure on the back of rising pet coke, coal and diesel prices during Q3 and Q4 FY2017.

“Given the large usage of pet coke across companies and the low cost pet coke inventory being exhausted by the companies, the full impact of this price rise is expected to be visible during Q4 FY2017. In addition to this, there has been a nearly 12 per cent increase in diesel prices during 9M FY2017 on a YoY basis,” it said.

The trend has continued during January and February 2017, wherein diesel prices have increased by 28 per cent and 32 per cent, respectively.

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News Cement

ACC Cement Announces Plan of Rs 600 crore in 2017 Expenditure

ACC Cement announces a capital expenditure plan of Rs 600 crore for the coming financial year, CEO and MD Neeraj Akhoury said at the company’s Annual General Meeting.

Akhoury said the outlay will be used for various projects, without divulging details.

The company reported a profit of Rs 604.38 crore for the year ending 31st December, 2016, up from Rs 587.60 crore in 2015, registering a growth in profit of 2.9%.

Revenue stood at Rs 11,275.75 crore, down by 5.39% since last year at Rs 11,916.94 crore.

Total sales declined from 23.62 million tonnes in 2015 to 22.99 million tonnes in 2016, reporting a decline of 2.7%.

The homegrown cement major that commissioned a new plant at Jamul in Chhattisgarh suffered from low capacity utilisation in the industry in the year gone by, which stood at 75%. While production took place at levels above 85% of capacity in the northern, central and eastern regions, excess capacity in the south dragged down the average capacity utilisation in the industry.

The cement industry has remained impacted

Richa Industries Receives an Order of Rs. 35 Crore from Delhi Metro Rail Corporation

in the last few months by demonetisation as well as state elections held in five states in the country, a report by investment advisory firm Emkay Research said.

On the question on the buzz around the supposed merger between ACC Cement and Ambuja Cement, Akhoury said that as of now the two companies are operating as independent legal entities with separate boards and no such discussion has happened at the board level.

It recently sold its 12.13% stake in Odishabased Shiva Cement to JSW Cement for Rs 38.67 crore.

Neeraj Akhoury succeeds Harish Badami as the new MD and CEO and took charge in February after being appointed in December last year.

“The Union Budget for 2017-2018 had a welcome thrust on the rural sector, infrastructure development, housing and a boost to the overall investment climate. If 2017 also experiences a normal monsoon, GDP growth is likely to rebound in the second half of the year. Better liquidity and improved tax collections will enhance Government’s ability to spend on infrastructure and other development projects, leading to faster growth,” Akhoury said.

Richa Industries Limited, a leading Construction & Engineering company, has secured an order of INR 35 crores from Delhi Metro Rail Corporation (DMRC) for constructing the Six Elevated Metro stations on Mukundpur-Shiv Vihar Corridor and Depot cum Workshop of Jahangirpuri-Badli Corridor Phase III of Delhi MRTS. Richa Industries received these back to back projects from DMRC. The First Project involves the Construction of six elevated metro stations and Second project involves Construction of Workshops ,Inspection Shed, Stabling Shed, Pit Wheel Lathe Shed and Parking Shed.The complete scope of work entails Engineering Design, Fabrication, Shipment and Erection of the Pre Engineered Buildings.

Dr. Sandeep Gupta, Managing Director,Richa Industries Limited says, We are glad to get this back to back project of DMRC and this will be our fifth achievement after associating with Metro Rail Sector. Our focus will remain to take up more challenging projects in future for Infrastructure development and enhancing Public services.

CONSTRUCTION MIRROR A Outlook of the Construction & Infrastructure Industry

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News

Australian Govt Company to Invest in Adani’s Coal Mine Project

Mining

An Australian government-owned fund manager company has expressed interest to invest in “infrastructure pieces” of Indian energy giant Adani’s $ 21 billion controversial coal mine project in Queensland Chief executive of QIC Damien Frawley said the company, whose major clients include defined benefit superannuation scheme for Queensland public servants, was keen to explore infrastructure opportunities around the state.

Even though the company has not been approached for investment in the Adani’s Carmichael coal mine project, QIC has said it would not be interested in the mine itself.

“But the infrastructure pieces of Adani would be interesting for us to explore. If it fitted within the return rates we are seeking,” Frawley was qouted

as saying by ‘The Courier Mail’ here.

The indicated area of investment could include the construction of a 500-kilometre rail corridor from Galilee Basin to the coast and expansion of coal export terminals at Abbot Point near Bowen, it said.

Frawley said the company was also looking at another $ 5.4 billion Cross River Rail initiative for the country.

“It’s a piece of infrastructure we would be very keen to explore,” he said, adding that “the funding is the area that Government is trying to solve at the moment “I think there’s an opportunity for private capital to participate if the economics of that investment are favourable,” he said QIC, which was founded in 1991 with $ 7 billion under management, has built up a $ 79 billion portfolio of assets and investments in Australia and overseas.

Despite being targetted by several political and environmental group from time to time, Adani has reaffirmed its commitment for the project and promised to create economic prosperity, including creating thousands of jobs for the people of regional Queensland.

Govt Considering MIP on Some Aluminium Products

The government is considering all options, including imposition of minimum import price on certain categories of aluminium products, to protect the domestic industry, a union minister confirmed.

This Ministry (Mines) is making all possible efforts, including considering imposition of Minimum Import Price (MIP) on certain categories of aluminium products to protect the domestic industry,” Mines Minister Piyush Goyal said in a written reply to 12 CONSTRUCTION MIRROR

the Lok Sabha.

Representations for imposition of MIP on aluminium products have been received from the Aluminium Association of india, he said.

As per the study report prepared

by MECON on assessment of MIP for aluminium in India, loss of primary aluminium producers was Rs 943 crore in FY2014-15. This loss increased to Rs 4,283 crore during FY2015-16.

“The reason behind this was an increase in production cost and slump in London Metal Exchange (LME) price of aluminium from average USD 2,317.50/ MT in 2011-12 to USD 1591.82/MT in 2015-16,” he said, adding that there was an increase in import from China amid weak domestic demand

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“Our mining project will create economic prosperity and will also create thousands of jobs for the people of regional Queensland,” said Adani Group Chairman Gautam Adani during a recent meeting with Queensland premier Annastacia Palaszczuk in India.

“The Carmichael mine will help bring energy security to millions of Indians who do not have access to electricity. The Adani group is committed to nation building projects in the energy and infrastructure space which will create economic and social benefits for people of India and Australia,” he said.

Carmichael coal mine project, one of the world’s largest, will start construction this year after being given the green light by the federal and Queensland state governments.

The project involves dredging 1.1 million cubic metres of spoil near the iconic Great Barrier Reef Marine Park, which will then be disposed off on land.

Cricket legends Ian and Greg Chappell and other prominent Australians in an unusual move recently wrote to Adani to abandon the project, warning it could damage bilateral ties and even hit sporting links.

Vedanta extends CEO Tom Albanese’s contract by five months Indian mining company Vedanta Resources Plc said on Thursday it has extended Chief Executive Tom Albanese’s contract by five months until the end of August.

The three-year contract was due to expire on Friday.

Vedanta’s executive chairman Anil Agarwal is leading the succession process to identify candidates to replace Albanese, the company said.

Vedanta was hit by the slump in commodities prices. Its revenue fell 16.6 percent last year to 10.7 billion pounds ($13 bln), its lowest in six years, while profit before tax, excluding special items, plunged 79.5 percent Vedanta’s shares have fallen 12.4 percent since Albanese, the former head of Rio Tinto Plc , took the helm in April 2014.

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News Mining

Adani Group Planning Invest in Punjab

The Adani Group has shown interest in investing in Punjab and the companies’ top functionaries met Chief Minister Amarinder Singh here on Monday to pursue the matter, officials said.

Adani Group president and chairman of several key companies of the Gujarat-based group, Pranav V. Adani met Amarinder Singh here to discuss possible areas of investment in Punjab.

The Adani Group is already running a solar power generation unit in Bathinda and have showed interest in expanding their presence in the state, the officials said here.

Adani Green Energy Ltd had, in 2016, had commissioned Punjab’s largest solar power plant of 100 MW in Bathinda with an investment of Rs 640 crore.

Another Adani company has set up silos worth RS 250 crore for grain storage in Punjab. An investment of another RS 210 crore is being made in this field.

Adani told the Chief Minister that the Group’s businesses, which also include real estate and city gas distribution (CNG and pipeline network), have a big potential to scale up Punjab’ progress.

“The Group’s emerging businesses, such as water purification, defence and aerospace, drones manufacture etc, also find synergies with the state’s public welfare and strategic growth interests,” he noted.

MIP Is Considering on Aluminum Products The government is considering all options, including imposition of minimum import price on certain categories of aluminum products, to protect the domestic industry, a union minister confirmed.

“This Ministry (Mines) is making all possible efforts, including considering imposition of Minimum Import Price (MIP) on certain categories of aluminium products to protect the domestic industry,” Mines Minister Piyush Goyal said in a

written reply to the Lok Sabha.

Representations for imposition of MIP on aluminum products have been received from the Aluminum Association of India, he said.

As per the study report prepared by MECON on assessment of MIP for aluminium in India, loss of primary aluminium producers was Rs 943 crore in FY2014-15. This loss increased to Rs 4,283 crore

during FY2015-16.

“The reason behind this was an increase in production cost and slump in London Metal Exchange (LME) price of aluminium from average USD 2,317.50/MT in 2011-12 to USD 1591.82/MT in 2015-16,” he said, adding that there was an increase in import from China amid weak domestic demand.

CIL Eyes Supply Contracts With Power Plants to increase Sale Coal India hopes to increase sales from supply contracts that will be auctioned to power plants, which will help reverse sluggish sales.

“A 1,000 MW power plant requires around 4.5 million tonnes of coal a year. If we are able to supply coal to these plants that do not have any contract, sales could rise by about 200 million tonnes,” a company executive said.

An estimated 50,000 MW of thermal capacity does not have any supply contract from Coal India. Of these, 9,000 MW has already achieved commercial operation with coal received from ad hoc sources while 41,000 MW will come up by 2020.

These plants need about 225 million tonnes of coal per year. Another set of 30,000 MW of power plants are in the pipeline. They have coal supply contracts

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in place and will require 135 million tonnes of coal.

Coal India also plans to offer around 130 million tonnes of coal through the eauction route.

In 2016-17, it produced 555 million tonnes against its target of 597 million tonnes. Production target

for 2017-18 has been set at 660 million tonnes. “We are banking on the longterm coal supply contract auctions, the norms for which are likely to be notified soon,” a senior Coal India executive said.

“Once auctions for long-term contracts for power plants are started, sales are likely to rise, which would help enhance production. Coal India has not been able to produce at its targeted levels because sales were not as estimated, leading to stock accretion issues at both pit-heads and power plants,” the executive said.

At one time during the last fiscal, cumulative stocks at power plants and pit-heads had touched nearly 100 million tonnes because power demand was not as anticipated, he said.

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News

Gebr. Pfeiffer Receives Order From

International

Sagar Cement for Slag Mill

Sagar Cement has ordered a vertical roller mill from Gebr. Pfeiffer for grinding granulated blast-

furnace slag and granulated blast-furnace slag cements.

The mill will be used at a new 160t/hr slag grinding plant at the cement producer’s Bayyavaram Village unit near Visakhapatnam in Andhra Pradesh. Delivery is scheduled to take place before the end of 2017. No price for the order has been disclosed.

The order is for a MVR 5000 C-4 mill equipped with a 4300kW-drive and four grinding rollers with

active redundancy. The plant will grind granulated blast-furnace slag with a fineness of about 4,500 cm²/g acc. Blaine and it will also be able to grind composite cements from varying portions of granulated blast-furnace slag, fly ash and gypsum.

Core components of the mills, including the roller, tension system, grinding bowl and planetary gearbox, will be supplied from Europe. The mill foundation parts, the housing and the integrated high-efficiency classifier of the type SLS 4750 BC will be provided by Gebr. Pfeiffer India. The local subsidiary will also supply most of the equipment required to complete the grinding plant, including the plant fan and hot gas generator.

Loesche Reports on DG Khan Cement Project at Hub Loesche has released details on its order to supply three grinding plants for DG Khan Cement for a new 9000t/day clinker production line at Hub in Balochistan. The contract, which was originally signed in September 2015, includes one 654t/hr raw meal, one 445t/hr Ordinary Portland Cement mill with a COPE drive and a 66t/hr coal mill. Loesche says that the raw mill with a nominal capacity of 1050t/hr will be the biggest raw material mill in the world. Cemex to run Maceo cement plant at

reduced capacity Cemex Latam, the Latin American subsidiary of Cemex, intends to operate its Maceo cement plant project in Antioquia at a reduced capacity due to difficulties with its environmental clearance. The cement producer will continue building the 0.95Mt/ yr plant but it will reduce its output to 0.25Mt/yr once it is operational, according to Reuters. The Colombian cement producer attempted to reverse the annulment of its environmental permits with

the local body in late 2016.

In September 2016 Cemex fired several senior staff members in relation to the Maceo project and its subsidiary’s chief executive resigned. This followed an internal audit and investigation into payments worth around US$20.5m made to a non-governmental third party in connection with the acquisition of the land, mining rights, and benefits of the tax free zone for the project.

Mineral Products Association Warns of Cost Burden of Climate Policy on UK Cement Industry

Pal Chana, the Executive Director of the Mineral Products Association (MPA), has warned of the cost burden from the implementation of climate change and energy related policies on the cement industry.

He made the comments as part of the launch of the association’s 2016 Annual Performance Report.

“The report highlights that one of the greatest threats to the UK cement industry currently and ||www.constructionmirror.com||

in the near future is the considerable cumulative cost burden from the implementation of climate change and energy related policies, which we estimate are going to increase by 40% to 2020 even with the limited discounting provided by Government. If action is not taken to protect the UK cement sector from these rising costs, imports will increase, jobs will be lost and security of supply will be threatened,” said Chana.

The MPA added that despite market improvements production is still 27% below the level it was in

2007.

In the report the MPA reveals that the cement industry has reduced its CO2 emissions by 23% against a 1998 baselines. However, both emissions from calcination and the combustion of fossil fuels rose year-on-year in 2015, the most recent year of reporting. Despite this, emissions of NOx, SO2 and dust were all reduced or stabilised and waste fuels usage showed improvement. The MPA also said it was concerned that policy drivers, such as those incentivising the use of biomass in other sectors, is increasing the competition for limited biomass resource. This could result in a market distortion with the potential to drive cement manufacture back towards coal use.

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News Steel

Don’t Use Steel Foreign Made Steel: Senators

An influential group of nine Democratic Senators has urged President Donald Trump to not let a Canadian company use foreign made steel, in particular from india and ltaly, in the trans-national multibillion controversial keystone oil pipeline.

Your memorandum explicitly covers new and expanded pipeline projects so we were confused and disappointed to learn that the Keystone XL pipeline would not be required to use 100 per cent American-made steel,” the nine Democratic Senators wrote in their joint letter to Trump, a copy of which was released to the press.

“Further, we are deeply concerned that by allowing this Canadian firm to use foreign steel from countries like India and Italy, which have a history of dumping steel products in the US market at unfair, illegal prices, you are establishing a precedent that will have the effect of costing US jobs and undermining the spirit of your Presidential Memorandum,” the Senators wrote Led by Senators Chris Van Hollen and Tammy Duckworth the Democratic lawmakers urged Trump to protect American jobs by ensuring all

new pipelines - if approved - are constructed and maintained with American made products and equipment.

Other signatories to the letter are Cory A. Booker, Thomas R. Carper, Al Franken, Christopher S. Murphy, Debbie Stabenow, Joe Donnelly Claire McCaskill, Robert Menendez, and Gary C. Peters.

“As champions of expanding Buy American requirements to make sure taxpayer-supported projects contract with American companies to the greatest extent possible, we were initially encouraged by this memorandum,” they said.

“We were disappointed, however, when we learned that your administration would exempt the Keystone XL pipeline project from this Buy American policy,” the letter added.

On January 24, Trump issued a Presidential Memorandum to the Secretary of Commerce directing the Secretary to “develop a plan under which all new pipelines, as well as retrofitted, repaired, or expanded pipelines, inside the borders of the US, including portions of pipelines, use materials and equipment produced in the US, to the maximum extent possible and to the extent permitted by law.”

However, Trump has exempted Keystone pipeline from this.

“We request that you reconsider your decision to allow a foreign company to use foreign steel in the

Keystone XL pipeline and urge you to secure a firm commitment to source 100 per cent American-made steel for this project,” the Senators wrote.

“Doing so would be a strong statement of support for American manufacturers and the hard working women and men who fuel our national economy,” they said.

The USD 8 billion pipeline that TransCanada wants to build would carry crude oil from Canada through Montana, South Dakota and Nebraska, where it would connect with an existing Keystone pipeline network that would take the oil to Texas Gulf Coast refineries.

Several environmental groups filed lawsuits against the Trump administration yesterday to challenge its decision to approve construction of controversial Keystone pipeline.

The environmental groups contend in their lawsuit filed in Montana that the 2014 report on the project’s impact “downplays or ignores other significant environmental impacts of Keystone XL, including harms to land, air, water, and wildlife.”

Former president Barack Obama, rejected the pipeline, saying it would lead to an increase in greenhouse gas emissions and do nothing to reduce fuel prices for US motorists.

The pipeline that was first proposed in 2008 has drawn strong opposition from environmental groups and some landowners who worry about potential contamination of ground and surface water.

Japan’s Sumitomo Partners With Mukand to Set Up Steel Rolling Mill in Karnataka Specialty steel maker Mukand Ltd and Sumitomo Corp of japan have signed an agreement to form a venture that will set up a rolling mill in Karnataka.

The JV, Mukand Alloy Steel Pvt Ltd (MASPL), will set up a steel rolling mill unit at Hospet in Karnataka with an initial capacity of 3,75,000 tonnes per annum.

Mukand will hold 51 per cent stake in the JV and Sumitomo 49 per cent equity with an enterprise value of Rs 2,820 crore, a statement said here.

The new company will be engaged in the rolling and finishing of Mukand’s principal business of alloy steel long products. It will exclusively procure the required alloy steel billets and blooms from

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Mukand’s steel making facility at Hospet, it said.

The agreement was signed at Kyoto, Japan in the presence of Rajesh Shah, Co Chairman and Managing Director of Mukand and Kuniharu Nakamura, President and CEO of Sumitomo.

MASPL will initially invest Rs 550 crore in the proposed plant at Hospet.

The JV will combine Mukand’s manufacturing and engineering capabilities and Sumitomo’s marketing management skills and know-how to cater to a growing automobile market globally, the statement said.

Sumitomo is a leading trading and business investment company having a presence in 66

countries. Apart from various other businesses, Sumitomo is engaged in the supply of steel products that are supplied to automakers as materials for a broad range of auto parts.

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News Steel

SAIL Cuts Costs by 10% in Spite of Rise in Coal Prices

S t e e l Authority of India cut production cost 10% despite a 12% hike in coal prices earlier in the year though high manpower cost and low productivity still remain for India’s largest state-owned steel company as it tries to jack up Rs 70,000 crore production after its re modernisation.

At 21% of expenditure, SAIL’s manpower cost is one of the highest in the industry. The issue, among other topics, figured at a workshop organised for senior management as part of a soul searching exercise to identify problems hampering SAIL’s performance and to develop `Priorities for Action’

for turnaround of the company SAIL is seized of the urgency to leverage manpower through rightsizing and investment in capabilities and reduce its total cost of manpower. The aim is to slash manpower costs by as much as 5% in three years through restructuring, merger of departments and redeployment of excess manpower.

“We are trying to gear up for the future,“ SAIL chairman P K Singh told ET in an exclusive interview.

Leveraging human capital will be one of the key drivers for enhancing the company’s performance, he added. To achieve it, Singh is relying on direct communication with SAIL’s 85,000-strong employee base. He has already spoken to some 25,000 of them. “We have a large base of employees and they are geographically staggered. Add to it our mines and sales personnel who are located countrywide.

All of them are poised to become the change agents for improvement,“ Singh added.

Skill gaps have affected productivity, especially in key technology areas and SAIL wants to strengthen technical training and will look to tie-ups with third party domain experts. A top heavy model has seen dilution of roles among senior personnel while it fends off higher attrition rates among qualified employees particularly MTs and diploma holding non-executives in modernised units and high tech areas.

Hence, the company is reviewing the training period of diploma holders and fast track promotions.

SAIL will also look to deploy resources across the organisation to remove pockets of underutilisation in critical areas. It hopes outsource operations of some non-core areas. To tackle inadequate succession planning, particularly in identifying relevant competent personnel in key positions, SAIL will focus on Identification of high performers from E6 level.

The Consumption of Steel is Expecting Down in Fy2017 Domestic Steel consumption is expected to be lower in FY2017 compared to previous year’s levels with key user industries like real estate and construction yet to pick up pace, ratings agency ICRA has said in its latest report. However, the government’s thrust on infrastructure and affordable housing sector in the union budget 2017-18 points to a favourable demand outlook for steel sector in the medium term.

The agency said given the scenario of sluggish demand, sustainability of a price increase in April 2017 remains uncertain. While low demand had led to a reduction of Rs 2,000 per tonne in domestic hot rolled coil (HRC) prices in February 2017, prices saw an upward revision of Rs 1,000 per tonne in March 2017. The industry is reportedly considering a 2 New Independent Directors further price increase in April, but the sustainability of this increase remains uncertain, Appoints in Tata Steel given that domestic prices are now costlier than landed cost of imports, ICRA said in the report.

Tata Steel named two new Independent Directors to its board Steel imports contracted by 38.5% in 11M FY2017 on the back of various trade protection meet. measures including anti-dumping duty, safeguard duty and minimum import price. “This Aman mehta was a CEO of HSBC Asia Pacific region. He decline in steel imports has coincided with a strong growth in steel exports by domestic retired from HSBC in 2004 and now is occupied with corporate mills, supported by an improvement in the pricing scenario in international markets,” governance, board and advisory roles in companies such as Jayanta Roy, senior vice president, Corporate Ratings, ICRA said. As against a wide gap Cairn India and Tata consultancy services of 7.6 mt in FY2016 between India’s steel imports and exports, exports have surpassed Deepak Kapoor was Chairman of PwC India operations. He imports in eleven months of FY2017 by a thin margin and as a result, India has now has experience in audit function as well as business advisory. become a net exporter of steel in the current year, he added.

Tata Steel also added that Independence Director subodh Domestic steel consumption growth remained weak at 3.4% in the eleven months of the bhargava retired from the board. financial year FY2017 due to continued weakness in the key end-user industries. While domestic steel consumption typically picks up sequentially in the third quarter after the retreat of monsoon and consequent pick up in construction activity, this year consumption growth in Q3 FY2017 dropped by 2.4% quarter on quarter due to demonetization of high value currency in November 2016.

In the current quarter (Q4FY17), profit margins of steel producers are likely to remain under pressure, as most of the high cost coking coal inventory would be consumed in this quarter. Apart from blast furnace operators, which form about 45% of the total installed capacity, secondary steel players would also be adversely impacted by the increased input costs of sponge iron and scrap. This, coupled with weak demand conditions, would weigh on the operating margins of the industry in Q4 FY2017, the report added.

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Transport & Logistics

Commerce Ministry Considering Separate Unit for Logistics

The Commerce Ministry is working on a proposal to set up a separate logistics unit to deal with the issues, including rising costs, that are impacting global competitiveness of exporters.

There is no single department or ministry at present to look at all the aspects related to logistics covering various modes of shipment such as sea, roads and railways.

According to sources, the proposal is under discussion with the ministries concerned.

Exporters too have demanded for a specific department to deal with the issues related to logistics. They are undertaking a study to look at issues like shortcomings in logistics and ways to address that.

A trade expert said that an umbrella body would help coordinate all aspects of logistics, which is currently managed by different departments.

To increase the logistics competitiveness of exporters, the Commerce Ministry has also suggested to the Railways Ministry that it needs to clearly distinguish between consignments for exports, imports and the general category in terms of freight rates.

Logistics costs of exports are very high in India and due to this, Indian goods are less competitive in the global markets.

In India, the container transport is heavily inclined

in favour of roads due to high freight rates of railway, unpredictable and unreliable scheduling of freight trains, and poor last-mile connectivity.

A strategy paper released in 2010 by the Commerce Ministry had emphasised upon the need to invest billions of dollars in improving infrastructure to boost exports. It had asked the government to invest to modernise roads, ports, railways, airports, power and customs stations.

During the April-February period of the current fiscal, exports grew by 2.52 per cent to $245.4 billion.

India is aiming to increase its share in global trade to 3.5 per cent by 2020 from the 2 per cent at present.

Increasing trade helps create big employment opportunities and boost economic growth.

JSW Group to Invest Rs 7,000-cr More in Ports Sector by 2020 Industrialist Sajjan Jindal said his JSW Group will invest Rs 7,000 crore more in the ports sector over next three years to create assets in the country as well as abroad.

The company is also looking at diluting up to 15 per cent stake in the ports operating company, JSW Infrastructure, to a private equity player soon, and take it public by 2019.

“We will be investing Rs 9,000 crore more in the ports sector till 2020 (including the Rs 2000 crore already invested),” he told reporters at JSW Infrastructure-run flagship port here in Ratnagiri district.

The company has already invested Rs 2,000 crore in the project at Jaigad and the overall investment plan for the company includes Rs 2,000 crore for capacity expansion here, Jindal added.

Of the remaining Rs 5,000 crore of investments (excluding the Rs 4,000 crore in Jaigad), Jindal said the company is looking at putting up four berths in Paradip that will have a 50 mtpa capacity and a greenfield project in Fujairah in the UAE. The Rs 4,000-crore Jaigad Port project has a capacity of 40 million tonnes per annum now, which will be doubled by 2020 and raised further to 125 mtpa by 2025, he said.

At the company level, total capacity target is 200 mtpa by 2020, Jindal said, adding the port now 20 CONSTRUCTION MIRROR

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handles dry bulk cargo but has plans to enter container handling.

One of the biggest opportunities that the port is eyeing is the proposed public sector mega refinery by IOC- HPCL-BPCL in the Konkan belt of Maharashtra, even though the exact location is not finalised yet.

Jindal said JSW is “pitching” to act as a “captive port” for the proposed refinery project which will host the very large crude carriers to ferry in crude, and also ships to evacuate refined products.

The JSW group has tied up with the Hiranandani Group, which is investing up to Rs 4,000 crore to construct an LNG terminal at the Jaigad Port and then evacuate the cargo through a dedicated pipeline that will be connected with GAIL’s pipeline at Dabhol.

It can be noted that the Ratnagiri Gas & Power (formerly Dabhol Power) does the same work already, but Jindal is confident that the growing market will ensure there are opportunities for all.

The JSW Group is also looking at sites in the Palghar district which is north of Mumbai, to build a greenfield port, Jindal said, without specifying the details.

Jindal said the Palghar project will be independent and not a part of the Wadhawan Port being developed by the Centre and the state.

He said the company, which primarily handles captive cargo for group companies, had a turnover of Rs 4,000 crore and a pretax profit of Rs 800 crore in last financial year.

JSW Infrastructure is fully-owned by the Jindal family now and is looking at first diluting up to 15 per cent before launching an IPO, Jindal said.

It has decided on milestones before it going public, he added, specifying that a capacity of utilisation of 100 mtpa is essential before it goes public, which at present is around 30 mtpa and 100 mtpa target can be achieved by 2019 and will be jacked up further to 140 mtpa by 2020.

The total debt of the company stands at Rs 1,500 crore at present.

With a focus on port connectivity, the company has invested Rs 50 crore on a 42-km road link with the National Highway 17, which was inaugurated.

The company also laid the foundation stone for a 34-km rail link between Jaigad and Digni on the Konkan Railway route, which includes 18-km of routes passing through tunnels.

Jindal said establishing rail connectivity between Chiplun and Karad on the Deccan Plateau being carried out by the government now will enhance the port’s addressable hinterland.

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Transport & Logistics

Warehousing Companies Part of JNPT’s New Plan

In a likely breather to Container Freight Station (CFS) operators which otherwise ran the risk of losing massive amounts of business, the customs department at the Jawaharlal Nehru Port Trust (JNPT) has put out a tender calling for bids for CFSs to be part of the operations in the new Direct Port Delivery regime that the Narendra Modi government is trying to implement.

CFSs are port warehouses where the cargo is stored after being offloaded from a vessel. DPD ideally seeks to cut out the presence of CFSs facilitating direct transfer of shipments from the port terminal to an importer.

NPT, which handled India’s largest container cargo tonnage, currently has 33 CFS operators including Allcargo Logistics Ameya Logistics, GDL and Hind Terminal.

Under DPD, the customs department and JNPT had appointed one single CFS to which all goods would be transferred if they were not cleared 48 hours after landing.

Under the latest call for bids that was out on Friday, a maximum of 10 CFSs may be selected, giving importers more options to stock their goods, JNPT deputy chairman Neeraj Bansal.

“We are in the initial phase of DPD and are doing very well,” said Bansal. “But you have to understand that JNPT is a CFS port, and our aim is to increase ease of doing business for the importers. Hence the new tender,” he said.

The move came after many stakeholders raised issues that an all-out shift to the new regime would create logistical problems.

Some have already complained their costs have increased, instead of being cut.

Citing a letter from airconditioner maker Voltas and opinions expressed by executives of VIP Industries in a recent meeting.

Bansal said that the main aim of DPD is to cut transaction costs and to this end, the key criteria of the tender would be to have one fixed cost of handing to be charged by all CFS operators. Currently, CFS operators charge different rates based on market dynamics.

Also, like in the case of a single stipulated CSF, the goods would only go to the new selected ones 48 hours after idling at the port terminal. This would mean that unlike earlier, the customs clearance will have completed before the goods move to a CFS. CFS operators have been opposing an all-out implementation of DPD, saying that importers should be given an option on whether they want to use their services or not. The new tender too is unlikely to go down well with them.

“Why should we agree to a single stipulated rate? On what basis is that being fixed? And what are the criteria for choosing a handful of operators?” asked a top executive at a CFS operator who didn’t want his or his company’s name to be cited.

To be sure, DPD is a global phenomenon actively prevalent in more efficient ports and is slated to cut down dwell time for a shipment from nine days to a day, making a massive difference in turnaround time and transaction costs.

Also, the Modi government has taken a terse stance than its predecessors in implementing decisions which it feels will be beneficial for the economy. The recent example was of demonetisation which it went with full spate ahead, despite criticism from the opposition and economists worldwide.

JNPT also put out another tender to select one single transporter or aggregator to handle all truck operations for carriage of cargo out of JNPT, said Bansal.

This, he said was part of a larger initiative of providing a complete logistics solution to the importer.

“We are looking at changing the routes and the stacking processes for cargo too. As in the case of CFS, the transporter or aggregator we select will levy one regulated charge and will be more accountable,” he said.

Organized Logistics Sector A $50 Billion Opportunity by 2025, Says Alvarez & Marsal

Organized logistics sector could be a $50 billion opportunity in India by 2025 helped by formalisation of the sector, consultancy firm Alvarez & Marsal said in an industry report.

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of the total logistics market in India, according to Alvarez & Marsal. It is rife with fragmentation and inefficiencies.

“As the Indian logistics industry shifts from unorganized to organized, the need for supply chain performance improvement and the need for logistics companies that serve as supply chain partners will help advance investment opportunities,” the report stated.

Alvarez & Marsal said Advantages stemming from India’s maturing logistics market, coupled with

growth in consumer industries and increasing dispersal in demand, will positively impact six key investment areas: Road transportation, railways, multimodal logistics parks, online retail logistics and value-added services after implementation of Goods and Services Tax (GST).

The growing need for organized logistics companies in India is propelling opportunities for investors, corporates, private equity sponsors and other strategic buyers, according to Alvarez & Marsal.

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News

Transport & Logistics

Government Asks Major Ports to

Apollo Logisolutions Inks

Introduce RFID System

Pact With PIL Arm Singamas

To ensure real-time tracking of vehicles and men at ports, country’s all major ports have been asked to put in place the RFID system.

All major ports have been directed to implement RFID (Radio-Frequency Identification) system by March 31, 2017, Minister of State for Shipping Pon Radhakrishnan told the Lok Sabha in a written reply.

“Implementation of RFID system will eliminate manual checking of documents at port gate and ensure real-time tracking of movement of vehicles, men and materials,” he said.

This would reduce congestion and also cost of operations at ports, he said, adding the system is fully operational at JNPT.

Apollo LogiSolutions (ALS) and Singamas, a subsidiary of Singaporeheadquartered Pacific International Lines (PIL) have signed a Memorandum of Understanding to jointly pursue cold chain logistics in India through a joint venture company, the company said in a release.

This pact aims to provide cold chain logistics solutions, temperature controlled space/warehouses and temperature controlled transportation and distribution services.

Last year, ALS had signed two Memorandum of Understandings with PIL Group of companies. The first pact between ALS and PIL which facilitates mutual cooperation in container freight stations (CFS) & allied services.

While the second MoU between ALS and PIL’s subsidiary Singamas to jointly pursue transportation of specialized liquids in India. The third MoU signed now is for cold chain logistics.

Established in 2009, Apollo LogiSolutions is an Integrated Logistics solutions provider and a subsidiary of Apollo International.

Stamping,Tagging of Hand Baggage at Airport to end From April 1 Stamping and tagging of the hand baggage of passengers at seven major airports, including Delhi and Mumbai, will be done away with from April 1, the CISF said.

The other airports which will see the new system of baggage security coming in include the ones in Bengaluru, Hyderabad, Kolkata, Cochin and Ahmedabad.

“The system of stamping and putting tags on the

hand baggage of passengers will be dispensed with from April 1 at seven airports. We have put in place the required security systems that will help us in ushering in this passenger-friendly move,” CISF Director General O P Singh said.

The move, the CISF chief said, will enhance “passenger experience and provide hassle free security environment to them”.

The move was earlier announced by the aviation

security regulator, the Bureau of Civil Aviation Security (BCAS), but the Central Industrial Security Force wanted to deploy appropriate security infrastructure before such a regime could be ushered in without any compromise on the security aspect at these sensitive facilities.

Singh said his personnel have been updated about the new protocol and that he himself had seen the preparations made in this regard at the Bengaluru airport .

Government Awards 128 Air Routes Under Regional Connectivity Scheme The aviation ministry on Thursday said the first regional flight under the policy to make air travel accessible to the common man, Ude Desh Ka Aam Naagrik (UDAN) scheme, will start from next month after it selected 27 proposals from five airlines to connect 128 routes across the country, connecting 31more unserved airports.

Under the scheme, the government aims to enhance grassroot adoption of aviation as a transportation medium and offers carriers cash subsidies for selling up to 40 seats per aircraft at Rs 2,500 for each hour of flight. “We expect that the first regional flight will start from next month,” aviation secretary RN Choubey said.

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Turbo Megha Airways Pvt Ltd (TruJet Brand), Air Deccan and Air Odisha Aviation Pvt Ltd (Air Odisha). Of the five airlines, three will have to apply to the Directorate General of civil Aviation (DGCA) for Airline Operator Permit under scheduled commuter category. Alliance Air and SpiceJet do not have to apply for any such permit and can start regional flights right away.

“We have formed committees to ensure that these airlines get their Airline operators Permit (AOP) in four months. TruJet will get approvals faster and in as early as one month’s time as they already have a regional operator’s licence,” BS Bhullar, Director General of DGCA confirmed.

Through the UDAN scheme, the government will

provide connectivity to 31more airports in the country. “In a century of civil aviation, only 76 airports were connected with scheduled commercial flights. In one year since aviation policy was announced, 31more unserved airports will get connectivity,” Choubey further said.

“This will give a huge fillip to investments, tourism and job creation in the interiors of India. Operators should try and synchronise their schedules and enter into code share agreements with larger carriers.

Aclose collaboration between RCS operators and larger airlines would help India get closer to its dream of becoming largest market by 2030,” said Amber Dubey, partner and India head of aerospace and defence at KPMG. ||www.constructionmirror.com||

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Govt Eases FDI Rules in Construction Sector for Foreign Investor

In a recent amendment (Dec3, 2014) to the FDI Policy, 2014 issued by the Ministry of Commerce of Industry, 100% investment will be allowed through the automatic route to boost construction of townships, residential and commercial premises, roads, bridges, hotels, resorts, hospitals, educational institutions, recreational facilities, cities and regional level infra. The Press Note issued made following amendments to the current policy: Reduction of min floor area requirement to: 20,000 sq. mtr as against 50,000 sq. mtr for constructiondevelopment projects; NIL in case of serviced plots as against 10 hectares.

The investee company shall be required to bring in min FDI of US$ 5 Million within 6 months of commencement of business and rest in subsequent tranches in over a period of 10 years. Min FDI reduced to US$ 5 million as against US$ 10 million for wholly owned subsidiaries and joint ventures.

However, the conditions of minimum floor area and capital requirement will not apply to investee/ JV CoS which commit at least 30% of the total project cost for low affordable housing. There is no lock-in period for repatriation of investment and development of some part of project within a period 5 years.

The foreign investor has an exit opportunity from the project but after the completion of trunk infra like road, water supply, street lighting and drainage. The current amendment is not meant for real estate business, construction of farm houses and trading in transferable development rights (TDRs). The aforementioned conditions of min floor area, capital requirement and exit on completion of project will not apply to Hotels & Tourist resorts, Hospital, SEZs, Educational Institution, Old Age Homes and Investment by NRI.

Infra Push to see Cement

Products With Solutions Approach for Road Sector: JCB India

Demand Improve to 5% in

Construction equipment major JCB India has geared up to back its wide range of equipment with a solutionsbased approach to enhancing productivity for its customers.

JCB India, a subsidiary of JC Bamford Excavators of the UK, has positioned itself to play a pro-active role in improving the productivity of its customers in the construction sector. Vipin Sondhi, MD & CEO, JCB India, said: “JCB’s machines have been contributing to the development of infra in India for about 4 decades. Now through its Premier Line Road Construction Solutions, we are committed to contributing and expediting the building of roads and highways in both rural and urban India.” Now, JCB plans to provide a solution-based support for products, by providing training, monitoring, backing with parts and service, he told.

In demonstrating the versatility of the company machines deployed in the construction, he said the idea is to ensure that they get hassle-free service be it smooth functioning of machines, spare parts and improving output, while concentrating on other aspects of business. As a part of its efforts to popularize the new approach, JCB is showcasing its Made-in-India Road Construction Solutions at its Pune facility. Sondhi said, “Our in-house design centre in Pune has been at the forefront of all our innovation programmes which includes the range of machines exhibited and demonstrated at this event.

Products manufactured at the Pune facility are sold not only in India, but are also exported to various countries.” JCB Livelink Telematics technology enables users to remotely monitor machines and improve the productivity of the machines by providing real-time alerts on service, operation & security benefits to the machines owners, Sondhi said.

An expected revival in the infra space may help the cement demand to grow to around 4-5% in the next fiscal, according to rating agency ICRA. The agency said that FY’16-17 would be a flat year for the sector as demonetisation had a negative impact on real estate and construction activities and the situation is likely to normalise from the first quarter of FY’17-18 onwards. ICRA is expecting an uptick in demand from road and irrigation projects and the housing segment next fiscal, which would support the cement prices going forward. Meanwhile, it also added that rising costs as transportation is likely to put pressure on the profitability for the next few quarters. “ICRA expects cement demand growth to recover to around 4-5% during FY’18, driven by a pick-up in the infrastructure segment,” ICRA Ratings Senior Vice President & Group Head Sabyasachi Majumdar said. The increased budgetary allocation for infrastructure sector, which includes roads, railways, metro, irrigation and housing, during FY’17-18 will support cement demand. “Also, higher rural credit and increased allocation for rural, agricultural and allied sectors, including the demand for rural housing, are significant contributors to the overall cement demand mix,” he said. According to the agency, cement volumes during Nov’16 to Jan’17 declined by 8% as against their corresponding period impacted by the demonetisation. The agency is expecting demand during the current fiscal to remain flat. “While in the short term, demonetisation has had a negative impact on real estate and construction activities and hence on the cement off-take, the impact is expected to subside and the situation is likely to normalise from Q1 FY’18 onwards,” said Majumdar.

Energy and freight costs are under pressure on the back of rising pet coke, coal and diesel prices during Q3 and Q4 FY’17. “Given the large usage of pet coke across companies and the low cost pet coke inventory being exhausted by the companies, the full impact of this price rise is expected to be visible during Q4 FY’17. In addition to this, there has been a nearly 12% increase in diesel prices during FY’17 on a YoY basis,” it said. The trend has continued during Jan and Feb’17, wherein diesel prices have increased by 28 and 32%, respectively. “This is likely to put pressure on the freight costs of cement companies,” it said.

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Fy18: Icra

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Govt Aimed to Build 15,000 Km of Roads in 2016-17 but Laid Down Only 8,200 Km The govt built 22 km of roads per day in 2016-17, missing its ambitious target of constructing 41 km every day. Road transport minister Nitin Gadkari had set an all-time high target of building 15,000 km of roads in 2016-17 but only managed 8,200 km of roads. This construction figure, however, is the highest that the ministry has achieved till date and more than double of what the previous UPA govt managed. Between 2009 and 2014, on an average 6-9 km of roads were built per day. Gadkari had also set a target of awarding 25,000-km of stretch under highway projects in 2016-17 as compared to 10,000 km last fiscal. Officials said delay in

land acquisition and tepid response from private developers came in the way of the ministry meeting its target. The highway sector had hit a rough patch since 2007. However, under the Modi govt, between 2014-15 and 2016-17, the overall allocation to the sector increased by 73%, from Rs. 1.3 lakh Cr to Rs. 2.25 lakh Cr . The PM has been regularly reviewing the progress of the sector through his monthly meetings where he interacts with central and state officials through video conference, to resolve bottlenecks holding up projects. The ministry has initiated a series of measures to de-centralise work . “In the last two-and-a-half years, we resolved

issues that were stalling about 80 projects. Only a handful of projects are stuck as of now,” said a senior NHAI official. Besides, the ministry also empowered states to appraise projects worth up to Rs. 100 Cr and invite tenders. Earlier, all such projects used to come under the Centre, resulting in delays. It also introduced a new model called “hybrid annuity” where the government gives 40% of the construction cost while the developer invests the remaining 60 %. So far 26 projects have been awarded under the new model.

Infra Equipment Finance Business is Witnessing Robust Growth Dedicated equipment finance companies, public and private-sector banks and non-banking financial companies operate in this space.

According to experts and sector insiders, the total size of the infra equip. finance business in the country could be anything between Rs 25,000 Cr and Rs 30,000 Cr. The govt has set an ambitious target of laying roads up to 40 km per day in the country. Till Feb in FY16-17, about 6,500 km of roads construction has been done, seeing a growth

from the previous financial year, when just 6,000 km of roads have been laid. Laying of roads today needs modern machinery and equipment needing huge investment. Acquiring finance is the only way to procure equipment today, as a result of which equipment finance companies have been maintaining a positive outlook. Builders Association of India. While already, many projects are going on in roads and highways construction, activity is expected to pick up in the affordable

housing sector soon, thereby raising hopes among construction equipment finance businesses. The Budget for 2016-17 has given a major thrust to the affordable housing segment. As a result, says a senior official from YES Bank, many new launches are expected to take place in the housing sector in 2017-18. A growth in construction activity also leads to a growth in equipment financing business as 80-90% of equipment cost is given as loan towards construction equipment.

ISRO as Partner in Aerospace Foray: BHEL State-run Bhel is planning to enter the aerospace sector. India’s largest power generation equipment maker plans to collaborate with ISRO for manufacturing space grade solar cells and partner for satellite launches. Bhel also plans to enter the maintenance, repair and operations

(MRO) business for aircraft engines. “Bhel has been supplying various components and systems for the satellites by Isro since 2002. While meeting the projected enhanced requirements of Isro, Bhel plans to enhance its engagement by manufacturing space-grade solar PV (photo voltaic) cells;

on-board energy storage cells, which have been hitherto imported by Isro and packaged by Bhel as solar modules and on board batteries. Bhel is also exploring the feasibility of manufacturing cells and batteries with Isro- developed technology for application in e-vehicles,” said a Bhel spokesperson.

Govt Clears the Way for 5 New SEZs The govt has approved 5 proposals, including those of Oracle India and L&T Construction Equipment, for setting up IT SEZs. These SEZs were given approval by the Board of Approval (BoA), chaired

by Commerce Secretary Rita Teaotia, at its meeting on March 8. Oracle India has proposed to set up IT and ITeS zone in Karnataka. L&T Construction Equipment has planned two similar zones in the ||www.constructionmirror.com||

state, too, according to the minutes of the meeting.

Modern Asset and Modern Asset (Phase II) received the BoA approval for their IT zone in Karnataka as well. Further, the BoA has given more time to as many as 10 SEZ developers and units to implement their projects. The Kandla Port Trust, developer of multi product SEZ at Kandla, in Gujarat got one year extra window till May 6, 2018, to execute its

project. The others that got additional time include Golden Tower Infratech, Brookfield Real Estate and Projects and SEZ Biotec Services. During Apr-Sep, exports from these zones stood at Rs 2.21 lakh Cr as against Rs 4.63 lakh Cr in 2014-15. Nearly 500 proposals for SEZs have been formally approved by the govt, of which over 200 are operational.

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Stable Outlook on the Construction Sector: Ind-Ra

“India Ratings and Research (Ind-Ra) has maintained a stable outlook on the construction sector for FY18, driven by the expectation that the slow but steady increase in revenue and improvement in EBITDA margins seen during FY16 and FY17 will continue in FY18,” the rating agency said in a statement. The sector is likely to witness a gradual improvement in credit metrics, although constrained by the companies under debt restructuring showing no signs of recovery, the ratings agency said.

“The sector has seen improvement in liquidity position, with a significant improvement in cash flow from operations (CFO) in FY16, although it

continued to remain negative. Liquidity is likely to improve further, with CFO improving over FY17-FY18 to reach near-zero levels,” Ind-Ra said.

A positive cash flow is imperative for the sector to fund its working capital, as bank credit growth to the sector plunged over FY16-FY17, it said, adding that maintaining improvement in cash flows over the medium term, however, would depend on a prudent accumulation of orders. The ratings agency expects order inflow to grow in next FY primarily driven by increased public investment in transport and urban infrastructures, power transmission, and water and irrigation projects. “The overall allocation for roads, housing and electrification increased 18% yoy in

the Union Budget 2017-18,” it said. It, however, highlighted that the allocation for the National Investment and Infrastructure Fund continues to be low. “The fund was expected to leverage the initial funding multifold for investment and provide a stimulus to the infrastructure sector, which will not happen in FY18. ” The sale of PPP projects in the roads sector has increased significantly during 2016, which is likely to continue in 2017. Ind-Ra said this may aid in deleveraging of balance sheets of construction CoS. However, this will continue to remain a buyers’ market, given the significant demand and supply mismatch, it added.

Index of 8 Core Industries Touches 180.1 in Feb The Eight Core Industries comprise nearly 38% of the weight of items included in the Index of Industrial Production (IIP). “The combined Index of Eight Core Industries stands at 180.1 in Feb’17, which was 1.0 % higher compared to the index of Feb’16. Its cumulative growth during Apr-Feb’16-17 was 4.4 %,” read a govt statement.

Coal: Coal production (weight: 4.38%) increased by 7.1% in Feb’17 over Feb’16. Its cumulative index during April to Feb’16-17 increased by 2.8% over corresponding period of previous year. Crude Oil: Crude Oil production (weight: 5.22%) declined by 3.4 % in Feb’17 over February, 2016. Its cumulative index during April to Feb’16-17 declined by 2.8%

over the corresponding period of previous year.

Natural Gas: The Natural Gas production (weight: 1.71%) declined by 1.7% in Feb’17 over Feb’16.

Its cumulative index during Apr-Feb’16-17 declined by 1.9% over the corresponding period of previous year. Refinery Products (93% of Crude Throughput): Petroleum Refinery production (weight: 5.94%) declined by 2.3% in Feb’17 over February, 2016. Its cumulative index during Apr-Feb’16-17 increased by 5.9% over the corresponding period of previous year. Fertilizers: Fertilizer production (weight: 1.25%) declined by 5.3% in Feb’17 over Feb’16. Its cumulative index during Apr-Feb’16-17 increased by 2.1% over the corresponding period

of previous year. Steel (Alloy + Non-Alloy): Steel production (weight: 6.68%) increased by 8.7% in Feb’17 over Feb’16. Its cumulative index during Apr-Feb’16-17 increased by 9.1% over the corresponding period of previous year. Cement: Cement production (weight: 2.41%) declined by 15.8% in Feb’17 over Feb’16. Its cumulative index during Apr-Feb’16-17 declined by 0.7% over the corresponding period of previous year. Electricity: Electricity generation (weight: 10.32%) increased by 1.5% in Feb’17 over Feb’16. Its cumulative index during Apr-Feb’16-17 increased by 5.0% over the corresponding period of last year.

Govt Plans to Sell Non-Operational Units of CCI

The govt said it is planning to sell off non-operational units of Cement Corporation of India (CCI) as part of strategic sale of loss-making companies.

“As far as CCI is concerned, non-operating units

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of CCI are to be disinvested first as a part of strategic disinvestment of CCI,” Minister of State for Heavy Industries and Public Enterprises Babul Supriyo said in a written reply to the Rajya Sabha.

He said the inter-ministerial group has identified 5 units for disinvestment in the first phase - Mandhar, Kurkunta, Bhatinda, Nayagaon, Charkhi and Dadri. The legal issues relating to Delhi Grinding Unit (DGU), Adilabad and Akaltara need to be sorted out, he added. The process of appointment of

Transaction Advisor, Legal Advisor and Asset Valuer has been started by CCI as per direction of the group, he said. Niti Aayog has recommended for strategic disinvestment of CCI. To start with, all 7 non-operating units and the non-commissioned unit of Bhatinda are to be divested first and thereafter disinvestment of operating units is to be taken up.

“The units being considered under disinvestment at present are closed and workers are not there.

The amount expected as sale proceeds shall be known after asset valuation of non-operating units,” he said. Replying to a separate question, the minister said so far an amount of Rs 49.98 Cr has been disbursed under different components of the scheme for the capital goods sector. ||www.constructionmirror.com||

Berger Paints in Focus After Commencing Production at Assam Plant Berger Paints India said it has commenced commercial production of its integrated paint and putty plant at Naltali, Nagaon, Assam on 30 Mar’17. The plant has an annual capacity of 48,000

KL/MT per annum of water based paints, 24,000 KL of solvent based paints, 14,000 MT of Resin and 24,000 MT of wall putty. Thus, Berger Paints India has now commenced production at two of its

plants in Assam - one for the Berger Division at Naltali and the other for the British Paints Division at Nalbari.

Govt to Help Steel Cos to Resolve Their Npa Issue Indian banking sector and some other sectors are plagued with the severe problem of NPAs. If considered on the global front, India’s non-performing assets level places it among the worst performing economies. The capital-intensive steel industry in India is considered as the largest contributor in the overall NPAs in the country. The Prime Minister’s Office, Finance Ministry and Steel Ministry are coming together to resolve the NPA

issue in steel sector. The top 5 steel companies in India, Essar Steel, Monnet Ispat, Bhushan Steel, Electrosteel Steel and JSPL are seen to have the max NPA problems. The 3 ministries are coming together to solve the problem of NPAs is a welcome move, since it will clear the major roadblock for the banking sector to lend loans. As per the data available with the RBI, the rate of recovery of NPAs was 10.3% for the fiscal ended in Mar’16,

as against the 12.4% for the fiscal ended in March 2015. As of Nov’16, gross NPAs in the steel sector stand at around Rs 1.15 lakh Cr, which accounts for 2% of India’s GDP. RBI is also looking for ways to strengthen the Joint Lenders’ Forum, a mechanism to resolve the NPA issue. The senior officials at RBI are having series of meetings with the Finance Ministry from the past couple of months.

Despite Uptick in Production, Steel Sector Yet to Come Out of Woods Steel production is up on the back of a strong pickup in exports and modest domestic demand growth in the current fiscal. Despite the pickup in production, balance-sheets of steel CoS remain stretched and the debt coverage ratio is not likely to show any improvement in the near term believes ICRA, a rating agency. Domestic steel demand grew by an anemic 3.4% in the first 11 months of FY17 as demand from key sectors like capital goods and infra remained weak. Sequential contraction in demand due to demonetisation will also cap the full year’s growth of steel consumption at modest levels. However, production has grown by 11 percent in the 11 months of this fiscal on the back of

higher exports. While steel imports declined 38.5% in the first 11 months of FY17, exports jumped 77.6% supported by favorable international prices. Despite the pickup in exports and improved utilisation levels, ICRA remains a little apprehensive about balance-sheet stress. According to the rating agency, small and medium-sized players are the main concern as these companies are functioning at a sub-optimal level and are sitting on high debt. Average restructured debt of steel sector under Corporate Debt Restructuring (CDR) has remained high at Rs 52,000 Cr in the last 2 years, with the highest share of about 20 percent in the total restructured debt. The total exposure of steel

industry stood at about Rs 3.13 lakh Cr out of which gross NPAs were about Rs 1.15 lakh Cr (3%) as on Mar’16. According to ICRA, even though the operating scenario has shown an improvement in the current year, the credit ratio of ferrous metal companies rated by ICRA remained below 1, indicating higher number of downgrades than upgrades. If demand growth remains weak then industry utilization will remain low. In addition, 12-15 MT of capacity is being added by SAIL, NMDC and JSPL. The incremental capacity will take time to get absorbed.

Prefer Flats Over Longs: Steel Sector

India’s steel industry produces roughly equal longs (52%) and flats (48%) products. While the former is not very well traded and hence, dependent on domestic demand, the latter is seeing a double ||www.constructionmirror.com||

benefit from import substitution and rising exports.

Falling Chinese exports should be a big plus for JSW/Tata. Output from the major 4 players has been consistently outpacing the rest of the industry and utilisations at JSW/Tata are now at 90%+, implying gains from operational leverage. While 67% of the incremental 20 MT capacity addition is in flats, buoyant regional prices should keep enabling exports. Within longs, structural have seen healthy domestic demand (10%, 2011-16), but growth has been weaker- for bars/rods (+4%) and rails (1%). We would thus prefer flats over longs. On EV per tonne of capacity, Tata/JSW/JSPL

are all trading marginally below the replacement cost of $800-1,000/tonne, indicating that valuations are not stretched as yet. We raise Tata Steel’s TP to R600 on likely higher output and better EU spreads.

With exports as an exit route (at realizations that are not meaningfully lower than domestic), oversupply in flats is not a concern. Steel plays are now relatively cheaper on EV-EBITDA vs one year ago (despite the 40-108% rise in stock prices), but absolute levels still remain at 7x-8x. Unlike non-ferrous (a consensus buy), Tata/JSW still have less than 50% buy ratings.

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Post Event

ConMac Exhibition 2017 on Construction Equipment & Construction Technology, was Sucessfully Conducted Confederation of Indian Industry, India’s apex Industry body and Premiere Exhibition organiser hosted The 2nd Edition of ConMac - Exhibition on Construction Equipment & Construction Technology, an Excon show with a special focus on North East India from 2nd – 4th March 2017, at Maniram Dewan Trade Centre, Guwahati, Assam, India. The Indian Construction Equipment Manufacturers’ Association (ICEMA) was the “Sector Partner” at the event and was supported by Builders Association of India (BAI).

ConMac is organised to accelerate infrastructure developments in the region, encourage local entrepreneurship, help building awareness on equipment and technology, skills, etc, and to develop the contractor base in North East India and to provide education and access for small contractors to understand the latest technologies.

ConMac 2017 had 120 Exhibitors with 3401 Business Visitors from India and abroad (Bangladesh and Myanmar) . CII, as an industry body strongly believe it is our responsibility to put together an exhibition of this nature, which is in turn a collective effort to cater the needs of Contractors, Government and others. CII is delighted at the tremendous responses received from the region.

ConMac is specifically designed as a showcase 30 CONSTRUCTION MIRROR

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/ knowledge platform for Army, Border Roads Organisation, Assam Rifles, Government (PWD’s and Civil Engineering), Private contractors, Builders, Road / Infrastructure developers, Smart City / Urban Planning etc. to witness the Latest Technology, Equipment’s and Machinery display which will enable accelerated Infrastructure development needs of the region.

Assam Chief Minister Mr Sarbananda Sonowal inaugural speech at ConMac 2017, On the Dias Mr J Immanuel Mahesh Kumar, General Manager – Trade Fairs, CII and Mr Arvind Garg, Executive Vice President and Head - Construction & Mining Machinery Business at Larsen & Toubro Limited

2017. In his address he stated that Assam and Northeast region would become the hub of trade and business in the South East Asian region in the future, Assam Chief Minister Mr Sarbananda Sonowal said that the government is committed to bring faster development to the state taking advantage of Prime Minister Narendra Modi’s Act East policy. Participating as the chief guest at the ConMac 2017, the biggest business exhibition of its kind in the entire North East in the construction equipment & machinery segment organised by Confederation of Indian Industry (CII), Mr Sonowal said that an efficient transport communication system integrates remote, backward and urban areas and also plays a vital role in increasing productivity and improving quality of life and development of this sector has immense potential to generate large employment opportunities

The event was inaugurated by Chief Minister of Assam Mr Sarbananda Sonowal on 2nd March

||www.constructionmirror.com||

Infrastructure Development in North East India – Opportunities for Indian Construction Equipment Industry prepared by CII and ICEMA. From L – R, Mr J Immanuel Mahesh Kumar, General Manager – Trade Fairs, Mr Arvind Garg Executive Vice President and Head - Construction & Mining Machinery Business at Larsen & Toubro Limited, Mr Sarbananda Sonowal, Honourable Chief Minister of Assam, Mr Abhijeet Barooah, Co-Chairman, CII North East Council and Mr Anand Sundaresan, President ICEMA.

Mr Arvind Garg, Chairman, CII - ConMac 2017 ‎Executive Vice President and Head Construction & Mining Machinery Business at Larsen & Toubro Limitedspeaking at the Inaugural Session.

Mr Garg while speaking at the Inaugural mentioned, North East India, covering 8% of India’s land and 3.1% of India’s population is the country’s gateway to South East Asia. The integration and development of the region is critical for India’s continued progress. The development of the region has been on the radar of the current government and even forms a part of its election mandate.

The prime minister has stressed about the NER development and his plans to connect this region with the mainland.

At ConMac a conferenceon “Infrastructure Development in the North East Region - Focus on Roads & Highways” was organised by CII along with ICEMA (Indian Construction Equipment Manufacturers Association). The Conference mainly focused on Developments of roads & highways in the region, technology on the latest equipment’s for accelerating infrastructure development in North East Region. Participation of State Governments, Special Finance Pavilion by leading Financial Institutions, live demonstration etc., ConMac is designed as a showcase / knowledge platform for Army, Border Roads Organisation, Assam Rifles, Government (PWD’s and Civil Engineering), Private contractors, Builders, Road / Infrastructure developers, Smart City / Urban Planning etc., to witness the Latest Technology, Equipment’s and Machinery display which will enable accelerated Infrastructure development needs of the region.

||www.constructionmirror.com||

Dr SS Porwal, Additional Director General, Border Roads Organisation, Ministry of Defence & President, Indian Road Congress spent quality time with his Technical Team at the exhibition. He also expressed the needs of technological advancements and Specific Equipment’s required for the region to large OEM’s.

Dignitaries in the inaugural session of the CII-ICEMA Conference on Infrastructure Development in the North Eastern Region held at Guwahati on 03 March 2017. In the picture (From L to R): Mr S K Barua, Chairman, CII Assam State Council; Dr S S Porwal, VSM, Additional Director General, Border Roads Organization; Mr Arvind K Garg, Chairman, ConMac 2017 & Vice President, ICEMA; Mr Rajen Gohain, Minister of State for Railways, Government of India; Mr C K Das IAS (Retd), Member, North East Council; Mr Abhijit Barooah, Co-Chairman, CII North East Council and H K Jaggi, General Manager (Construction), North East Frontier Railway.

Speaking at the conference Union Minister of State for Railways Mr Rajen Gohain said “Railway ministry has giant plans for the North-East. several new tasks amounting to about Rs thirteen,500 crore were sanctioned in this year’s budget together with new traces, bridges and an increased rail tract challenge from Kamakhya to New Guwahati at a price of Rs 3,062 crore”, Gohain stated on the second day of the Exhibition on ‘Construction Equipment & Construction Technology’ at Guwahati: The exhibition was attended by senior Government and leading contractors of the region. Many appreciated CII’s efforts in organising cc in the region as it would also help medium and small contractors who would not be able to travel to Bangalore to witness Excon.

Shri Ratu Techi, Managing Director of T.K. Engineering Consortium Pvt Ltd, a biggest contractor from Arunachal Pradesh visited the Exhibition with Mr PK Roy, General Manager, T.K. Engineering Consortium Pvt Ltd Ambassador Chung Kwang Tien, representative, Taipei Economic and Cultural Center in India, visited the Exhibition, Assistant Representative Mr Larry J.H.Dong and Prof. Dr. Henry H. Chen, Counsellor & Director, Science and Technology Division, Ministry of Science and Technology, Taipei Economic and Cultural Center in India.

A team from Nagaland Contractors & Suppliers Union (NCSU) attended the three day long 2nd edition of ConMac 2017led by its secretary Hoshito Assumi. Col Sandhu from Assam rifles visited the Exhibition on 3rd March with his procurement team.

GM Construction and technical headNorth Frontier railways visited the Expo This Edition was spread over 2,00,000 Sq Ft Exhibition display area with large OEM’s like JCB, Larsen & Toubro – Komatsu, Tata Hitachi, TIPL (CAT), Mahindra & Mahindra, SANY, Schwing Stetter, BKT, Kobelco, MRF, BEML, SREI, KYB Conmat, HPCL, Sandvik, Ajax Fiori, Action Construction, Wirtgen and many more…. Showcased a wide range of machinery and equipment’s at the exhibition.

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T

he Indian airports are going through some changes that though is good move, but it is only possible when both the parties public and private will go hand in hand than only we can say that we are moving towards the high and advance zone in terms of improvising of airports.

The world is focused on Indian aviation, from manufacturers, tourism boards, airlines and global businesses to individual travellers, shippers and businessmen. If we can find common purpose among all stakeholders in Indian aviation, a bright future is ahead Currently India has air connectivity with 55 countries through more than 300 routes. Passenger traffic is growing at 20% per annum in the last 2 years.

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||www.constructionmirror.com||

Indian Airports, Aviation Industry Overview

• Currently India is 9th largest civil aviation market. Total passenger traffic stood at 224 million during 2016.

• India is expected to have 60 million international passengers by 2017.81 international airlines connecting over 40 countries. India is projected to be the third largest aviation market by 2020.

• Indian carriers are expected to have possessions of 800 aircrafts by 2020.

• By 2023, total freight traffic is expected to touch 4.14 MT exhibiting growth at a CAGR of 7.27% between FY’16 and FY’23.

• Witnessing a growth of 17.62% over the previous year, total passenger traffic stood at a 223.6 million in FY16, which was recorded at 190.1 million in FY15 in India.

• Growth in passenger traffic has been strong since the new millennium, especially with rising incomes and low-cost aviation; during FY06-16, passenger traffic grew at a CAGR of 11.8% in the country. ||www.constructionmirror.com||

• Domestic Passenger traffic CAGR 10.1% (FY 2006-16).International Passenger traffic CAGR – 8.8% (FY 2006-16).

• Total freight compared to International air freight traffic CAGR in Domestic Sector – 7.6% (FY 2006-16) and in International Sector 4.8% (FY 2006-16).

• During FY06-16, domestic freight traffic increased at a CAGR of 8%, while international freight traffic grew at a CAGR of 6.1% during the same period.

• India has more than 86 scheduled international airlines constituted of 5 Indian carriers and 81 foreign carriers.

• Currently India has air connectivity with 55 countries through more than 300 routes.

Passenger traffic is growing at 20% per annum in the last 2 years.

Introduction

India’s civil aviation industry is on a high-growth trajectory. India aims to become the third-largest aviation market by 2020 and the largest by 2030.

The Civil Aviation industry has ushered in a new era of expansion, driven by factors such as low-cost carriers (LCCs), modern airports, Foreign Direct Investment (FDI) in domestic airlines, advanced information technology (IT) interventions and growing emphasis on regional connectivity. India is the ninth-largest civil aviation market in the world, with a market size of around US$ 16 billion. India is expected to become the third largest aviation market by 2020#.

The world is focused on Indian aviation, from manufacturers, tourism boards, airlines and global businesses to individual travelers, shippers and businessmen. If we can find common purpose among all stakeholders in Indian aviation, a bright future is at hand.

Market Size

During Jan-Aug 2016, domestic air passenger traffic rose 23.14% to 64.47 million from 52.36 million during the same period in 2015. Passenger traffic APRIL 2017 ||

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during FY 2015-16 increased at a rate of 21.3% to 85.57 million from 70.54 million in the FY 2014-15. In July 2016, total aircraft movements at all Indian airports stood at 168,400, which was 14.3% higher than July 2015. International aircraft movements increased by 8.2% to 32,830 in July 2016 from 30,330 in July 2015. Domestic aircraft movements increased by 15.8% to 135,570 in July 2016 from 117,050 in July 2015. Indian domestic air traffic is expected to cross 100 million passengers by FY’2017, compared to 81 million. India is among the five fastest-growing aviation markets globally with 275 million new passengers. The airlines operating in India are projected to record a collective operating profit of Rs 8,100 Cr (US$ 1.29 billion) in fiscal year 2016, according to Crisil Ltd.

Investment

India is one of the fastest growing aviation markets and currently the ninth largest civil aviation market in the world. India is projected to be the third largest aviation market by 2020.Total passenger traffic stood at 224 million during 2016. India is one of the least penetrated air markets in the world with 0.04 trips per capita per annum as compared to 0.3 in China and more than 2 in the USA. Indian carriers plan to increase their fleet size to reach 800 aircraft by 2020.The Indian aviation sector is likely to see investments totaling USD 15 billion during 2016-2020 of which USD 10 billion is expected to come from the private sector.

300 business jets, 300 small aircraft and 250 helicopters are expected to be added to the current fleet of Indian carriers in the next five years.

Demand for MRO facilities is increasing in India, due to growth in the aviation sector. Investment opportunities worth USD 3 billion in greenfield airports under PPP at Navi Mumbai and Mopa (Goa).The development of new airports – the Airport Authority of India (AAI) aims to bring around 250 airports under operation across the country by 2020.For development of aviation in the North-east region – the AAI plans to develop Guwahati as an inter-regional hub and Agartala, Imphal and Dibrugarh as intra-regional hubs. AAI has planned to spend USD 3 billion on non-metro projects between 2016 and 2020, focusing on the modernization and up-gradation of airports. Indian airports are emulating the Special Economic Zone (SEZ) Aerotropolis model to enhance revenues, focus on revenues from retail, advertising and vehicle parking, security equipment and services.

According to data released by the Department of Industrial Policy and Promotion (DIPP), FDI inflows in air transport (including air freight) between April 2000 and March 2016 stood at US$ 931.05 million.

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Key investments and developments in India’s aviation industry include: • Airbus SAS has signed an agreement with Karnataka-based Aequs Aerospace, an aircraft component maker, for the supply of over 100,000 titanium machined parts for its A320 new engine option (NEO) aircraft.

• Boeing Company, an American plane maker, and Tata Advanced Systems Ltd (TASL), a fully owned subsidiary of Tata Sons, have entered into a joint venture to set up a new facility in Hyderabad to manufacture Boeing AH-64 Apache helicopter fuselages.

• GoAir, India’s fifth-biggest carrier by passengers travelled, has signed a memorandum of understanding (MoU) with Airbus to buy 72 A320neo aircrafts, valued at US$ 7.7 billion, as part of an expansion drive.

• Lockheed Martin Corporation plans to make India a manufacturing base for its F-16V fighter jets, C-130J Super Hercules military transport planes and helicopters.

• Auto components maker Bharat Forge Ltd (BFL), the flagship company of the US$ 3 billion Kalyani Group, has formalised agreement with Rolls-Royce Plc, under which BFL will supply critical and high integrity forged and machined components for a range of aero engines.

• The Ministry of Civil Aviation has signed an MoU with Finland, Kazakhstan, Kenya, Sweden, Norway, Denmark, Oman and Ethiopia for increased co-operation between the countries in terms of additional seats, sharing of airlines codes, increased frequencies and additional points of call, during the International Civil Aviation Negotiations (ICAN), 2015 held in Antalya, Turkey.

• Tata Advanced Systems (TASL) has signed a joint venture with American aircraft manufacturing major, Boeing, to establish a centre of excellence for manufacturing aerostructures for Apache helicopter initially and collaborate on integrated systems development opportunities in India in the long term.

• US-based aircraft manufacturer Boeing plans to assemble one of its two helicopters namely, Chinook (heavy-lift) or Apache (attack type) in India, thus becoming yet another global company to invest in India encouraged by the ‘Make in India’ campaign.

• Airbus, leading European aircraft

manufacturer, plans to invest US$ 40 million to set up a pilot and maintenance training center in New Delhi, which will be operational by the end of 2017.

• Airbus also expects India’s aviation industry to grow at over 10% annually in the next decade, almost double the average growth rate of the global aviation industry.

• Some of the foreign investors in India are Airbus (France), Boeing International Corporation (USA), AirAsia (Malaysia), Rolls Royce (UK), Frankfurt Airport Services Worldwide (Germany), Honeywell Aerospace (USA), Malaysia Airports Holdings Berhad (Malaysia), GE Aviation (USA), Airports Company South Africa Global (South Africa), Alcoa Fastening Systems Aerospace (USA), Singapore Airlines (Singapore), Etihad Airways (UAE), Fairfax (London).

GoI Initiatives

Government. agencies project that around 500 brownfield and greenfield airports would be required by 2020. The private sector is being encouraged to become actively involved in the construction of airports through different Public Private Partnership models, with substantial state support in terms of financing, concessional land allotment, tax holidays and other incentives. In the Union Budget 2016-17, the govt. introduced various proposals for Maintenance, Repair and Overhaul (MRO) operations for airplanes. These include customs and excise duty exemption for tools and tool-kits used in MRO works. The govt. has also scrapped the one-year restriction for utilisation of duty free parts apart from allowing import of unserviceable parts by MROs for providing exchange. As per revised norms, the foreign aircraft brought into India for MRO work would now be permitted to stay up to six months or as extended by aviation regulator Directorate General of Civil Aviation (DGCA). Such foreign aircraft would also be henceforth permitted to carry passengers in the flights at the start and end of its period of stay in India. Some major initiatives undertaken by the govt. are: • The Ministry of Civil Aviation has finalised and put forward for approval to the Union Cabinet, the new aviation policy, which includes proposals such as allowing new airlines to fly abroad, introduction of more regional flights and a new formula for granting bilateral flying rights.

• ISRO has signed a memorandum of understanding (MoU) with the AAI, aimed at providing space technology for construction of airports. ||www.constructionmirror.com||

Growth Drivers

Five international airports (Delhi, Mumbai, Cochin, Hyderabad, Bengaluru) have been completed and are operational under PPP mode. Greenfield airport at Navi Mumbai, Mopa (Goa) and some brownfield airports of AAI and 50 airports under the no-frills model would be developed all over the country of which same would be executed under the PPP model. Indian aviation is experiencing dramatic growth which includes the emergence of Low Cost Carriers (LCC) / new carriers to a growing middle-class ready to travel by air as well as growth in business and leisure travel. Greater focus on ||www.constructionmirror.com||

infrastructure development increasing liberalisation – Open Sky Policy AAI driving modernisation of airports. Air and Navigation Systems. Growth in aviation is also increasing demand for MRO (maintenance, repair and overhaul) facilities. India is home to large scale collaborations/ Merger & Acquisitions (M&A) deals. Etihad Airways & Jet Airways, Tata Group & Singapore Airlines, Tata Group & AirAsia. India plans to increase the number of operational airports to 250 by the year 2020. India’s aviation industry is largely untapped with huge growth opportunities, considering that air transport is still expensive for majority of the country’s population, of which nearly 40% is the upwardly mobile middle class. The industry stakeholders should engage and collaborate with policy makers to implement efficient and rational decisions that would boost India’s civil aviation industry. With the right policies and relentless focus on quality, cost and passenger interest, India would be well placed to achieve its vision of becoming the third-largest aviation market by 2020 and the largest by 2030.

FDI Policy

AAI is responsible for developing, financing, operating, and maintaining all public sector airports. New airports are permitted under the Greenfield Airport Policy 2008. Investment in airports is encouraged under the PPP Policy of the govt. of India. Regional Air Connectivity Policy offers attractive incentives in the form of exemption of landing, parking and navigation fees to airlines operating at designated airports in non-metro areas.

The extant FDI policy on Airports permits 100% FDI under automatic route in Greenfield Projects and 74% FDI in Brownfield Projects under automatic route. FDI beyond 74% for Brownfield Projects is under govt. route.1With a view to aid in modernization of the existing airports to establish a high standard and help ease the pressure on the existing airports, it has been decided to permit 100% FDI under automatic route in Brownfield Airport projects.1As per the present FDI policy, foreign investment up to 49% is allowed under automatic route in Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service. FDI beyond 49% is allowed through govt. approval.

For NRIs, 100% FDI will continue to be allowed under automatic route. However, foreign airlines would continue to be allowed to invest in capital of Indian companies operating scheduled and nonscheduled air-transport services up to the limit of 49% of their paid up capital and subject to the laid down conditions in the existing policy.1Up to 100% FDI is permitted in Non-scheduled air

transport services under the automatic route. Up to 100% FDI is permitted in helicopter services and seaplanes under the automatic route. Up to 100% FDI is permitted in MRO for maintenance and repair organisations; flying training institutes; and technical training institutes under the automatic route. Up to 100% FDI is permitted in Ground Handling Services subject to sectoral regulations & security clearance under automatic route.

Aviation sector achievements

India is the ninth-largest civil aviation market in the world and presently has a market size of USD 16 billion. The industry is poised to become the thirdlargest aviation market by 2020 and the largest by 2030. It is among the five fastest growing aviation markets globally, growing at over 20% year over year. The passengers carried by scheduled domestic airlines has increased by 29% from 148 million in April 2012 - March 2014 to 190 million in April 2014 - March 2016.

PASSENGER GROWTH Pax Carried (in millions)

• The GoI is planning to boost regional connectivity by setting up 50 new airports over the next 3 years, out of which at least 10 would be operational by 2017.

• Airports Authority of India (AAI) plans to develop city-side infrastructure at 13 regional airports across India, with help from private players for building of hotels, carparks and other facilities, and thereby boost its non-aeronautical revenues.

• Directorate General of Civil Aviation (DGCA), India’s aviation regulator, has signed an agreement with United States Technical Development Agency (USTDA) for India Aviation Safety Technical Assistance Phase II, aimed at bringing in systemic improvements in the area of operation, airworthiness and licensing.

• The govt. of India has given site clearance to Delhi Mumbai Industrial Corridor and Development Corporation (DMICDC) for setting up of a Greenfield Airport for public use near Bhiwadi in Alwar district of Rajasthan and has granted ‘in-principle’ approval to 13 other greenfield airport projects.

• AAI plans to revive and operationalise around 50 airports in India over the next 10 years to improve regional and remote air connectivity.

• Gujarat is expected to get a second international airport at Dholera. The state govt. has formed Dholera International Airport Co. Ltd. and is obtaining approvals from the union govt.

• DGCA has given its approval to Air India’s maintenance, repair and overhaul (MRO) unit.

• The GoI has decided to award airports in Kolkata, Chennai, Jaipur and Ahmedabad on management contract. AAI has issued the ‘Request for Qualification’ document for these four airports.

71.5

76.2

87.0

103.4

2012-13 2013-14 2014-15 2015-16

The growth of the industry is being propelled by the development of airports, presence of several low-cost carriers, a liberalized FDI policy, increasing adoption of information technology, and focus on improving regional connectivity.

Policy Initiatives & Incentives

FDI Policy: Airports - 100% FDI is allowed under automatic route for ‘Greenfield Projects’ and ‘Existing Projects’. Department of Industrial Policy and Promotion. 49% FDI is permitted in scheduled airlines and regional air transport services through automatic route and beyond 49% with govt. approval. For NRIs 100% FDI is permitted under automatic route. 100% FDI permitted via the automatic route for non-scheduled air transport services, helicopter services/sea plane services requiring DGCA approval, MRO, flying training and technical training institutions, ground handling services subject to security clearance and sectoral regulations FDI Equity Inflow: FDI equity inflows in air transport (including air freight) from April 2014 to September 2016 was USD 483.96 million. FDI inflows witnessed a tremendous growth of 605%, growing from USD 61.84 million during the two years from April 2012 to March 2014 to USD 435.81 million during the two years from April 2014 to March 2016.

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providers to be provided in all future airport/heliport projects where potential for such MRO services exist.

• Development of airports in PPP mode. Future tariffs at all airports will be calculate on a ‘hybrid till‘ basis, where the charges are calculated by taking all the aeronautical and 30% of the non- aeronautical revenue into account, unless specified otherwise in concession agreements.

UDAN Scheme / Regional Connectivity Scheme (RCS)

Major FDI equity inflow in the sector from Apr’14 to Sep’16 F D I Indian Company Equity Inflow (in USD Million)

Country

Foreign Collaborator

305.96

Jet Airways (I) Ltd

UAE

ETIHAD Airways

20.10

Dachser India Pvt Ltd Singapore Dachser Beteiligungs-AG

19.50

Instakart Pvt Ltd

16.88

Multirole Transport Russia Aircraft Ltd

11.01

Tata SIA Airline Ltd

Singapore Singapore Airlines Ltd

10.14

AEQUS Pvt Ltd

Mauritius

10.02

Cochin International UAE Airport Ltd

Services Singapore Kick2Shop Logistics Services International UAC-Transport Aircraft

AEQUS Manufacturing Investments Private Musaliam Veettil Abdul Kader Yusuffali

National Civil Aviation Policy (NCAP) – 2016

The NCAP was announced by the Ministry of Civil Aviation on June 15, 2016 with an aim to boost regional air connectivity, establish an integrated ecosystem to promote tourism and generate employment. Some of the salient features are: An integrated Civil Aviation Policy for the first time in India. To boost regional connectivity & and make flying affordable, airfare for routes under Regional Connectivity Scheme (RCS) capped at INR 2500 per passenger for a one-hour flight through• Revival of airports/air strips as ‘No-Frills Airports’ at an indicative cost of INR 50 Cr to INR 100 Cr. • Viability Gap Funding (VGF) to airline operators at 80:20 split between Centre and State, 90:10 for North East.

• 2% levy on all airline tickets to fund RCS RCS for states that reduce VAT on ATF to 1% or less, provide other support services and 20% of VGF. • Airport charges abolished and reduced service tax on tickets for a year at 10% of the taxable value and 2% excise duty on Aviation Turbine Fuel.

• 0/20 replaces 5/20 rule for starting foreign operations, which means airlines can commence international operations provided that they deploy 20 aircraft or 20% of total capacity (in term of average number of seats on all departures put together), whichever is higher for domestic operations.

• MRO sector gets a boost as provision for adequate land for MRO service 36 CONSTRUCTION MIRROR

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Launched in Oct’16, the scheme is targeted at improving connectivity and developing the regional aviation market. It also aims to make air travel more affordable to the common man. The Scheme is expected to boost tourism & employment generation in the country. Airline operators, who have to offer travel at subsidized rates, would be supported through concessions by both Central & State govt’s. Central govt. will offer concessions such as reduced excise duty, service tax, permission to trade ASKMs for Non-RCS (UDAN) Seats and flexibility of code sharing at the RCS (UDAN) airports. State govt’s are being encouraged to lower the VAT on ATF to 1% or less, besides providing security and fire services free of cost and electricity, water and other utilities at substantially concessional rates. Airline operators will also receive funding support through Viability Gap Funding (VGF) to meet the gap, if any, between the cost of airline operations and expected revenues on such routes. A RCF has been created to meet the viability gap funding requirements. AAI has received 43 initial proposals to fly routes under the RCS. These routes would be awarded to bidders with lowest VGF requirement based on the counter-bids against these initial proposals.

Fiscal incentives A host of incentives have been provided for the Maintenance, Repair and Overhaul (MRO) sector, which will help in developing the MRO sector in India.

Currently, 90% of the INR 5000 Cr MRO business of Indian carriers is spent outside of India. Budget 2017-18 provides for the following: • Exemption from service tax in respect of the amount of viability gap funding (VGF) payable to the airline operator for providing the services of transport of passengers by air, embarking from or terminating in a Regional Connectivity Scheme (RCS) airport, for a period of one year from the date of commencement of operations of the RCS airport.

• Select airports in Tier 2 cities will be taken up for operation and maintenance in the PPP mode. Airport Authority of India Act will be amended to enable effective monetization of land assets. The resources generated from land monetization will used for airport upgradation The PPP model for airports was started in India a decade ago in Delhi and Mumbai. Currently, Nagpur, Hyderabad, Bengaluru and Kochi also have private airports. PPP involves a funding model for a public infrastructure project which is funded and operated through a partnership of the govt. and one or more private sector companies.

It involves a contract between a public sector authority and a private party. The announcements on developing tier-2 airports on PPP mode comes in the wake of govt’s ambitious plan to connect remote airports, which include unserved and underserved airports under the regional connectivity scheme. India currently has 76 functional airports and the govt. aims to add 50 more airports under the RCS project, that is yet to take-off, as airlines are not finding the project viable as they are not sure of the demand of air travel to these remote destinations. Civil Aviation Ministry has received a substantial increase of over 22% in budgetary allocation at Rs 5,167.60 Cr for the next FY. Similarly, state-run airport developer, Airports Authority of India (AAI) that has been mandated to develop remote airports under the Regional Connectivity Scheme (RCS) project has got a budgetary support of Rs 2,543, which includes ||www.constructionmirror.com||

Rs 2,443 Cr as capital infusion in the new budget for 2017-18. Also budgetary grants for Bureau of Civil Aviation Security (BCAS), the regulator for aviation security in India has been increased to Rs 214.5 Cr from Rs 164.58 Cr, while the regulator for civil aviation sector, DGCA has got almost 800% increase in budgetary support of Rs 230.55 Cr from Rs 28.17 Cr in the last budget. Interestingly, UN aviation watchdog, International Civil Aviation Organisation (ICAO) is coming here to audit India’s air safety preparedness in the second half of this year.

During previous budgets, the following incentives were provided:

• Customs and excise duty exemption for tools and tool-kits used in MRO works.

• Restriction of one year for utilisation of duty free parts had been removed.

• Notification on Standard Exchange Scheme had been revised to allow import of unserviceable parts by MROs for providing exchange / advance exchange.

• Foreign aircraft brought to India for MRO work allowed to stay up to 6 months or as extended by the DGCA. The aircraft can carry passengers in the flights at the beginning and end of the stay period in India.

• Airport royalty and additional charges not be levied on MRO service providers for a period of five years from the date of approval.

• If the cost of ‘Made-in-India’ aircrafts and components worked out to be higher than those supplied from their original sources, the govt. will consider an incentive package to nullify the cost differential.

Infrastructure Development

To meet the growing demand, the govt. of India is focusing its efforts on developing world class infrastructure.

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Airports: Airports are being developed in PPP mode with govt. actively involving private sector participation. 160 airports in the country are being revived and operationalized in an attempt to boost regional and remote air connectivity. New greenfield airports that have been approved are: Dholera (Gujarat); Bhogapuram, Vizianagaram (Andhra Pradesh); Dagadarthi, Nellore (Andhra Pradesh); Orvakal, Kurnool (Andhra PRadesh); Bhiwadi (Rajasthan); Kothagudem (Telangana).

Common User Domestic Cargo Terminal: Common User Domestic Cargo Terminals (CUDCT) provides a range of domestic cargo handling services under one roof. Out of the 22 CUDCTs to be established in Tier-II/III (non metro) cities by 2018, 13 have been operationalized since May 2014 in the following airports: Mangalore; Madurai; Vizag; Raipur; Chennai; Indore; Ahmedabad; Kolkata; Aurangabad; Lucknow (Outbound only); Bagdogra; Bhubaneshwar; Goa. Cargo Hubs: Cargo Hub development is aimed to put all infrastructure at an airport to facilitate intertransshipment of cargo. Delhi has been identified as the first pilot station to be developed as a International Cargo Hub.

Innovation & Technology

The GPS-Aided Geo Augmented Navigation system (GAGAN) is the first SBAS (Satellite Based Augmentation System) in the world certified for Approach with Vertical Guidance operating in the Equatorial Ionospheric region. It is the 3rd SBAS to have achieved this feat, after WAAS of USA and EGNOS of Europe. Launched on 13 July 2015, GAGAN is the product of collaboration between AAI and ISRO. GAGAN will support direct air routes, reduce fuel consumption and improve safety. In addition, GAGAN provides benefits to agriculture, all modes of transportation and public services such a defence services, security agencies and disaster recovery management by aiding in search and rescue to locate the disaster zone accurately. The NCAP 2016 makes it mandatory for all aircrafts

registered in India from Jan 1, 2019 to be GAGAN enabled.

Ease of Doing Business in India Foreign MRO/OEM experts are provided visas promptly. In Aircraft on Ground (AOG) situation, Temporary Landing Permits issued. Foreign pilots operating an aircraft to and from India for the purpose of servicing at an Indian MRO entity are being issued Temporary Landing Permits, subject to conditions. Airport Entry Passes (AEPs) for MROs will be need based and not restricted if required conditions are met. Areas where aero-manufacturing takes place notified as SEZ. Fast-track clearances to global OEMs and their ancillary suppliers.

Skill Development / Job Creation A report by International Civil Aviation Organization (ICAO) states that for every 100 jobs created in the aviation sector, an additional 610 new jobs are created in the local economy. To meet the growing demand and need for capacity addition, estimated to be 3.3 lakh by 2025, MoCA has undertaken a variety of skilling initiatives.

• Basic Cargo Awareness Program (BCAP) for entry level staff of Air Cargo industry are being held all over India by Cargo Service Centre, Celebi Cargo, Delhi International Airport, Mumbai International Airport, Bangalore International Airport and Airports Authority of India (AAI). Till date, more than 1000 participants have been trained.

• Aerospace and Aviation Sector Skill Council (AASSC) has identified 70 job roles for development and formulation of National Occupational Standards (NOS) and Qualification Packs.

• A National Aviation University is being set up in Fursatganj, Uttar Pradesh.

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Guest Article :

Turning future of INDIAN AIRPORTS

By Ambika Gagar 38 CONSTRUCTION MIRROR

|| APRIL 2017

||www.constructionmirror.com||

Going through recent years may be or may not be the tough time

for Indian devaluation or we can also say Indian valuation but after the declaration of Delhi’s Indira Gandhi International Airport (IGIA) as the 21st busiest airport in the world in 2016 followed by the Mumbai Chhatrapati Shivaji International Airport (CSIA) ranked as the 29th busiest airport too. With the strong growth witnessed in 2016, India became the fifth largest civil aviation market in the world (behind the USA, China, Japan and the UK) based on the 254 million passengers handled at all the airports.

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Guest Article :

Now that the basic condition of our airports at current time is going through some obstacle, and we can also say that the life at airports are bit inconvenience, whether it take water supply, proper greenery land, what are all other primary needs that really need to improve the basis condition at airports? We are discussing those factors which are totally responsible for the up gradation of airports.

Airports Authority of India (AAI) is a government owned and operating 122 airports and civil enclaves out of a total of 449 airports and airstrips located throughout India. Less than 80 airports/ aerodromes receive regular commercial flights. The cities of Bengaluru, Delhi, Hyderabad, Kochi and Mumbai are served by privately (or joint-venture) operated airports.

It has been shown that the number of Foreign Tourism arrival during January 2017 and February 2017 was increase by 14 percent does it mean that the coming time should be the more busiest at the airports because of passengers traffic and cargo traffic too.

Here let’s look some of the out works of the government in the collaboration with private sectors. What are the measurers that both the government and private bodies are taking to improve the conditions and networks at airports?

Political Front on Airports In Union Budget 2017-18 governments announced that some airports in tier-ii would be developed on Public-private Partnership (PPP) mode.

In India we have 16 DGCA licensed private airports in many cities too like Nagpur, burnpur, mithapur etc. India currently has 76 functional airports and 40 CONSTRUCTION MIRROR

|| APRIL 2017

the government aims to adding 50 more airports under the RCS project.

Public-private partnership (PPP) involves a funding model for a public infrastructure project which is funded and operated through a partnership of the government and one or more private sector companies. It involves a contract between a public sector authority and a private party.

The Civil Aviation Ministry has received budgetary allocation at Rs 5,167.60 crore for the next financial year. State-run airport developer, Airports Authority of India (AAI) that has been mandated to develop remote airports under the Regional Connectivity Scheme (RCS) project has got a budgetary support of Rs 2,543, which includes Rs 2,443 crore as capital infusion in the new budget for 2017-18.

The regulator for aviation security in India has been increased to Rs 214.5 crore from Rs 164.58 crore, while the regulator for civil aviation sector, DGCA has got almost 800 per cent increase in budgetary support of Rs 230.55 crore from Rs 28.17 crore in the last budget. Interestingly, UN aviation watchdog, International Civil Aviation Organization (ICAO) is coming here to audit India’s air safety preparedness in the second half of this year.

Delhi, Mumbai, Hyderabad, Bengaluru and Kochi are the fives airport which are considering under the same projects. While Delhi and Mumbai were brownfield projects, the airports in Bengaluru, Hyderabad and Kochi were greenfield. The four metro PPP airports – Delhi, Mumbai, Hyderabad and Bengaluru, the share of public sector through AAI or the relevant state government is 26 pc with at least one foreign shareholder. In contrast to the metros, individual retailers, primarily NRIs (Non-Resident Indians) from Kerala, held a large part of the equity of the fifth PPP airport at Kochi, which was in fact the first airport to be built under

this model in 1999.

The two private bodies involved aggressively in the PPP model, GMR and GVK, have made dramatic changes in the airport infrastructure of Delhi, Hyderabad, Mumbai and Bengaluru; transforming the passenger experience, increasing the efficiency and the capacity of the airline operators and delivering a decent dividend to the AAI that gets a specified share of the gross revenue from the airport operators as per the PPP concession agreement.

The four airports in the main metros together accounted for 53 pc of the total passenger traffic handled by the Indian airports in 2014. This growth in traffic led by the PPP model has also made a significant contribution to the local and national economies, apart from the modernisation of the airports and the changed perception of India in the global market thanks to the improved infrastructure.

Land Dearth is a Challenge Only 3-5% of the land may be available for building multiplexes as there are aeronautical needs and in some airport we really require more land. “Shopping complexes will work very well at major airports but not in smaller airports. Finance minister Arun Jaitley has announced land reform that will open up portions of 50,000 acres of urban airport land to build beautiful multiplexes, shopping centers and convention stores for the relaxation of the passengers which sounding thrilling.

The Airports Authority of India (AAI), which owns most of the country’s 125 airports and holds 50,000 acres of urban airport land, will now be able to change the land usage policy. So far, airports were allowed to use their land only for airport-related

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activities such as car parking, hotels etc.

According to our AAI chairman Guruprasad Mohapatra. After a huge demand in the market for multiplex, shopping centers and etc. It is considering that if we devolve even a very small part of it which will be around (50,000) acres) in urban cities will be boon to this sector. There is changing statutory provisions which are there for sale of land.

AAI manages 125 airports in the country of which 80 are currently operational.

Airports typically earn revenue from aeronautical activities such as navigation charges from airlines and non-aeronautical ones such as car parking and hotels.

The hilly states as well as northeastern India, the civil aviation ministry proposed to waive off the landing, parking and navigation charges at 20-25 specified airports in 2014. In its revised Route Dispersal Guidelines (RDG), the ministry also recalibrated the capacity that the scheduled air operators need to deploy to connect the Tier II and III cities.

Many states have already agreed to provide free land for developing or extending the runway and exemption on municipal taxes.

The union government also instructed the state or local authorities to ensure water and power supply and proper roads to enhance the air connectivity in Tier II and III cities.

Green Airports are Driven Factor in India Indian airports are the fastest growing economics in the world in terms of passengers, according to the International Air Transport Association (IATA) in the report it was found that during the 2015-16 the total of numbers of passengers at Indian airports was 223.6 million which in breakdown as (almost 55 million international passengers and 169 million domestic ones. Which means this also require the control over the carbon emissions in the civil aviation sector. The airports such as New Delhi, Mumbai, Kochi, Vadodara are taken some steps to reduce this emissions. Green airports are gradually becoming a necessity all around the country for the very same reasons: a booming traffic, pressure to reduce carbon emissions and for financial and sustainable imperatives.

The 45-acre facility near the cargo complex of the Cochin International Airport

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is impressive: 46,000 solar panels are installed, in a futuristic decor that resembles the set of a science fiction film more than a traditional airport.

This huge solar panel farm in Kerala, in southern India, produces between 50,000 and 60,000 power units-a-day, making the Kochi airport ‘absolutely power neutral’, saving 300,000 tonnes of carbon emissions, according to its management. It is the first airport of its kind in the world, on that scale, to be powered only by solar energy.

Indian airport which includes New Delhi, Mumbai, Kochi and Vadodara have measure some more steps to minimize their carbon footprints. Under the PublicPrivate Partnership (PPP) the Kochi airport was built, which started using solar panels in March 2013, in a 100 KW unit on the rooftop of the arrival terminal.

It has a big solar park near cargo facilities.

Indian second green airport after Kochi, Inaugurated by Prime Minister Narendra Modi inaugurated the new terminal building of Vadodara’s Harni Airport in Gujarat in 2016, according to him, it was new facility.

Certain benefits of greening airports is minimizing noise pollution, developing fuel efficiency, employing a resource conservation policy dealing with energy and water and systematic recycling.

Indian airport, apart from developing green energy sources, has innovated in one or several specific areas of the green approach. Delhi’s Indira Gandhi International Airport, the busiest one in India with more than 48 million passengers in the fiscal 2015-16, is for instance at the forefront in monitoring noise pollution. Airport Carbon Accreditation, developed by Airports Council International (ACI) Europe, ranks airports according to their performance in terms of greenhouse gases emission. As per their standards, the airports in Delhi, Mumbai and Bangalore have acquired a level 3 accreditation

Figures and Taxes Non-aeronautical revenue makes up 40-45% of the total mix talking about India this figure is only 25%.This totally refers that airlines will paying less and so will passengers over time. Yeah this will be good for the sector. According to the number shown by the government the 34% growth in tax revenue is a very positive success coming out of demonetization.

During the period of 2007-2012, for instance, the AAI earned INR 20.82 billion

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Guest Article :

(USD 310 million) from Mumbai and INR 26.69 billion (USD 397) from Delhi.

The revenue of the Airports Authority has risen sharply to INR 28.9 billion (USD 430 million) in 2014- 15 from INR 5 billion (USD 74 million) in 2006-07, merely from the two airports in Mumbai and Delhi. “The income received from DIAL and MIAL is being utilised by the AAI for creating infrastructure at its other airports,’’ according to the official it was great that it was generated under privatization.

In the budget 2017-18 Finance minister Mr. Arun Jaitley confirmed that there would be no service tax on the amount of viability gap funding (VGF) payable to the airline operator for providing flights embarking from or terminating in a Regional Connectivity Scheme (RCS) airport, until one year from the date of commencement of operations of the RCS airport as notified by civil aviation ministry.

Let’s give up light on a bit on Airlines continue delivering a strong business if we talk about the airlines like airlines in the Asia-Pacific region are expected to generate a net profit of USD 6.3 billion in 2017 (down from USD 7.3 billion in 2016) for a net margin of 2.9 pc. Capacity offered by the region’s carriers is projected to grow by 7.6 pc, ahead of a forecasted growth in demand of 7 pc.

The negative impact of a lower load factor is expected to be offset somewhat by a strengthening of global economic growth. World GDP is projected to expand by 2.5% in 2017 (up from 2.2% in 2016).

Along with structural changes in the industry, this is expected to help stabilize yields for both the cargo and passenger businesses. This is a welcome development as yields (calculated in dollar terms) have fallen each year since 2012.

Regional Connectivity of the Airports The Indian airports facing a vast connectivity issue since long but the government approach 42 CONSTRUCTION MIRROR

|| APRIL 2017

to modernize our airports is been a fruit full solutions to it. The list of the airports which included mainly state capitals and key Tier II cities such as Ahmedabad, Amritsar, Aurangabad, Agatti, Bhopal, Bhubaneswar, Chandigarh, Dehradun, Goa, Jaipur, Lucknow, Indore, Khajuraho, Madurai, Mangalore, Port Blair, Ranchi, Raipur, Rajkot, Trivandrum, Udaipur, Varanasi and Visakhapatnam.

In a recent stories modernization means the complete change of the outer and inner airports such as new terminal building with modular design; structured steel with toughened glass glazing; vertical air-conditioning system; aerobridges with glass walls; walkways; in-line baggage screening for check-in; escalators; improved signage; integrated building management system; intelligent terminals; and improved traffic management on city side.

The planning of upgrading 35 regional airports so far, keeping aside INR 175 billion (USD 2.6 billion) for the purpose. The objective is to increase connectivity and passenger traffic.

AAI’s Plans for 2017

The last two years have shown resurgence of air traffic in India. The total number of aircraft movements in 2015-16 was 179,361. Total passenger movement stood at 223.62 million, a growth of 17.6 pc over the previous year and the total freight carried was 2,704,268 metric tonnes, an increase of 7 pc over the previous year. Average passenger load factors of all the scheduled domestic airlines have been 80 pc.

The domestic passenger traffic has increased from 139 million in 2014-15 to 169 million in 2015-16, registering an impressive growth of 21.6 pc. The international passenger traffic has increased from 51 million in 2014-15 to 55 million, which implies a 7.7 pc growth over the previous year. Airlines like IndiGo, SpiceJet, GoAir and Air India have placed purchase orders for more than 800 aircrafts in the

last one year.

The AAI has also set aside INR 4.5 billion (USD 67 million) to upgrade the Agartala airport, in the capital of the northeastern state of Tripura, to international standards, as part of India’s Look East policy.

Infrastructure Development Plan for 2017 s.

No.

Airport

Required Capacity in 2025-26 (MPPA)

Total Capacity Planned (MPPA)

Approx Estimate (INR in billions)

PDC of project

Dec-19

New Terminal building 1

AGARTALA

2.10

2.50

4.38

2

GUWAHATI

6.20

6.20

11.42

Oct-20

3

LEH

0.80

1.50

2.04

Jun-20

4

GORAKHPUR

0.20

0.20

0.22

-

5

PATNA

4.55

3.00

7.22

Jul-23

6

BIHTA (NEW CIVIL ENCLAVE)

0.00

2.50

3.50

Aug-19 Sep-18

7

TRICHY

3.10

3.52

7.70

8

JABALPUR

1.00

1.00

1.63

Dec-21

9

AHMEDABAD

11.27

9.00

1.10

Sep-18

Airport

Required Capacity in 2025-26 (MPPA)

Total Capacity Planned (MPPA)

Approx Estimate (INR in billions)

PDC of project

s.

No.

Expansion of Existing Terminal Building 1

CHENNAI

25.66

30.00

21.00

April-21

2

SRINAGAR

5.80

5.20

4.15

July-20

3

PUNE

12.33

4.38

4.08

July-20

4

LUCKNOW

9.79

9.75

8.80

July-20

5

MANGALORE

4.00

3.80

1.35

Jan-21

6

DEHRADUN

1.28

1.40

2.90

Jan-19

7

JAIPUR

8.88

8.75

11.77

Oct-20

8

GOA

15.66

7.5

4.00

Jan-19

Airport

Required Capacity in 2025-26 (MPPA)

Total Capacity Planned (MPPA)

Approx Estimate (INR in billions)

Status

s.

No.

Upgradation & Expansion Airports 1

KOLHAPUR

0.1

0.6

2.75

Engineering consultancy award feb 2017

2

JUHU

0.0

0.4

-

Consultancy awarded for preparation of TEFR, PDC Mar 2017

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The AAI is on the cusp of indulging in a massive developmental spree. In line with the initiatives already underway, the AAI has drawn up an Infrastructural Development Plan for 2017 in its quest of augmenting the airport capacity across the country.

The plan includes adding new terminal buildings at the airports in Agartala, Ahmedabad, Bihta, Gorakhpur, Guwahati, Jabalpur, Leh, Patna, Trichy and Vijayawada taking the total capacity to 31.92 mppa from the existing 14.04 mppa.

Similarly, the plan is also looking at expanding existing terminal buildings at airports in Chennai, Dehradun, Goa, Jaipur, Lucknow, Mangalore, Pune and Srinanagr, thereby taking the total capacity to 70.78 mppa from 39.71 mppa. To add to this, the AAI has planned upgradation and expansion of the airports at Kolhapur and Juhu, catering to 1 mppa in place of the existing 0.1 mppa. Also on cards are ventures for augmentation of airside

infrastructures. As per the plan, runway, taxiway, apron works are proposed at Jammu, Vijayawada, Tirupathi, Kadapa, Jabalpur, Kolhapur, Mangalore, Pune, Trichy, Goa and Raipur. Similarly, new ATC Tower-cum-Technical blocks are proposed at Kolkata, Ahmedabad, Vadodara, Raipur, Varanasi, Jabalpur, Bhopal, Trichy, Khajuraho, Guwahati, Bhubaneswar and Gaya.

Apart this, government also focus on improvement of the water supply and replacement of conventional bulbs with LED lights. The airport has also developed water treatment plants. Through this the airport also tries to address an important issue of the biodiversity that is endangered by airport developments because of habitat destruction. The natural ecosystem can be harmed notably through light, air or noise pollution or bird strikes.

CONCLUSION

CONSTRUCTION MIRROR A Outlook of the Construction & Infrastructure Industry

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In order to boost the tourism and to provide growth in the business areas, we need the iconic changes in the future of the Indian airports which is a drastic move which only and only helps to improve the aviation market on international platform because we are growing internationally very fast simultaneously the domestic front is just a step back running to improve its condition and we are approaching to the high level of regional connectivity with improve infrastructure as per the official collective information. Still we are too far to achieve the desire growth more over in domestic front.

If the life of the airports is changing that means the life of the passengers are modernizing in terms of better infrastructure, good convenience and in all the terms we are growing our airports and improving from this corner to that corner.

ICON MEDIA 375-G, IIIrd Floor, Pocket -II, Delhi - 110091 Tel : +91 11 6510 4350, Fax : +91 11 22753088 Email : subscribe@constructionmirror.com Web : www.constructionmirror.com APRIL 2017 ||

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Focus : Construction Chemicals

Construction Chemicals: Market Size and Future Outlook

Construction chemicals are chemical compounds added to construction materials for improving their performance, workability and compatibility with the construction structure. Construction chemicals market in India is projected to grow at a CAGR of over 15% during 2015-2020. Adoption of advanced coating, ceiling and polymer-based reinforcing material in construction will drive the demand for related chemicals. Adoption of advanced coating, ceiling & polymer-based reinforcing material in construction will drive the demand for related chemicals. Changing consumer lifestyles, especially of the country’s robustly expanding middle class population, is driving demand for quality construction of residential structures, thereby driving demand for construction chemicals in India. Increase in the number of high rise buildings coupled with growing need for fast & high quality construction is driving demand for concrete admixtures for blending purposes.

Moreover, construction chemicals impart structural and functional properties such as durability, finish and resistance to adverse conditions to the finished structure. Rising demand for high quality construction coupled with technological advancements is forecast to drive demand for construction chemicals in India during 2015 - 2020. Rapid urbanization, changing lifestyles, improving living standards and growing demand for aesthetically designed residential and commercial buildings is buoying growth in the construction chemicals market in India. Moreover, 44 CONSTRUCTION MIRROR

|| APRIL 2017

with increasing government regulations such as National Building Code (NBC) and green building initiatives, consumption of construction chemicals that adhere to the applicable norms and standards is growing, both in new building construction activities as well as repair & rehabilitation of existing buildings. Dyes and pigments, leather chemicals, construction chemicals, personal care ingredients etc. constitute specialty chemicals.

Key facts about India’s Chemical Industry

• In FY15, India’s construction chemical market was valued at USD 589.58 million, thereby representing ample growth opportunity in chemical sector.

• In terms of value and production volume, Indian chemical industry is the 3rd largest producer in Asia and 6th by output in the world. Indian chemical industry could grow at 11% p.a. to reach size of USD224 billion by 2017.

• In 2015, India chemicals industry had a market size of USD144 billion.

• By 2025, the Indian chemical industry is projected to reach USD403 billion.

• Chemical industry in India is a key constituent of economy, accounting for about 2.11% of the GDP. • More than 70,000 commercial products such as petrochemicals and basic chemicals are

covered under chemical sector.

• India accounts for approximately 16% of the world production of dyestuff and dye intermediates, particularly for reactive acid and direct dyes.

• India is currently the world’s 3rd largest consumer of polymers and 3rd largest producer of agrochemicals.

• India specialty chemical market is expected to reach USD 70 billion by 2020.

• Value exports of inorganic chemicals from India is estimated at USD1.21 billion in FY16, with the organic chemical market reaching USD 11.51 billion in FY16.

Exports of organic chemicals from India stood at USD 4.02 billion in FY16.

Specialty chemicals market has expanded at a CAGR of about 12% over FY07–11; the figure is expected to rise by 9.43% from FY14 to reach USD90 billion by FY23, India is also gaining traction as an outsourcing hub. The Indian middleclass household is expected to grow from 31 million in 2008 to 148 million by 2030, leading to a huge demand for specialty chemicals in automotives, water treatment and construction. Compared to developed markets, current usage of specialty chemicals in India is very low, with an increased focus on improving products and usage intensity of specialty chemicals, the industry is poised for strong growth in future. India’s construction ||www.constructionmirror.com||

chemical market stood at USD 573.2 million in 2014, which grew to USD 649.75 million in 2015.

With the construction sector expected to pace ahead due to strong economic growth, the fundamentals for construction chemicals are sound. By 2019, the construction chemicals sector is set to touch USD 1146.4 million. India’s construction chemical sector consists of a variety of products ranging from admixtures to sealants. Admixtures form the largest segment with a 42% share, followed by 18% share of adhesives & sealants.

concrete and for promoting the improvement of concrete performance. They also increase the life of construction work and impart additional protection from environmental hazards. Based on end use applications, these compounds can be broadly classified into five categories as shown in below figure.

• Unskilled labourers: The practice of employing unskilled workers in construction activity is still hampering the growth of the sector, as construction chemicals are sensitive products and their use requires basic technical expertise and training.

• Lack of stringent regulations: The industry lacks in relevant consumer standards for construction. Market participants are also frequently challenged by the absence of quality standards for manufacture and application of construction chemicals which leads to price wars.

• Ban on illegal sand mining in India: National green tribunal (NGT) banned sand mining from river beds without an environmental clearance across the country in Aug’13. Sand and bricks, apart from steel, cement and aggregate, are the prime raw material that goes into construction.

Due to non-availability of natural sand, industry has started using crushed stone sand and artificial sand. This is likely to impact the usage and requirements of construction chemicals in the market as the quality specifications of the concrete from artificial sand would be different than that of the natural sand.

Major sub-segments and their growth outlook by FY17 (USD Billion ) 8.2 5.3 3.6 1.3 Paints and Coatings

0.6

Speciality Polymers(2)

1.4

1.5

0.6 1.1

Textile Chemicals

Water Chemicals

0.8

Construction Chemicals(1) FY 17E

FY 11

Source: FICCI, Dept, of chemicals and petrochemicals, techsol Research

Specialty chemical growth outlook by FY23 (USD billion) CAGR: 9.43%

90

70 40

FY20F

FY14

FY23E

Construction chemical growth outlook (USD million)

1146.4 CAGR 13.9% 573.2

FY 14

649.75

FY 15

FY 19E

Introduction to Construction Chemicals

Construction Chemicals, as the name suggests, are the chemical compounds used in construction activities, be it residential, non-residential or non-building. These compounds belong to a niche specialty segment of the chemical industry and can be used either in existing construction projects to speed up the work or in new construction projects to impart durability and strengthen the structures. The benefits of using construction chemicals are far more than the increase in the cost of the project which is 2-5%. Certain chemical products help in minimizing the quantities of cement and water used in the construction. These compounds impart chemical as well as physical properties in applications such as cross-linking or phase change (from liquid to solid).

Construction chemicals are essential for high quality

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Key challenges

The construction chemicals market in India is still highly under-developed when compared to other countries, such as China, which accounted for 42% of the global construction chemicals consumption in 2012. Consumer awareness is very low regarding new chemical techniques and construction aids.

Margins are lower because most contractors prefer low-cost chemicals to reduce the overall construction cost. High value products have limited demand and are used only by premium construction houses.

Some of the key challenges faced by the industry are as follows: • Price sensitive market: Indian construction chemicals market is highly cost-conscious.

The customers are not willing to spend much on construction chemicals

They are still not fully aware of the

311.2

FY 09

*PCE :Polycar boxylic ether; SNF: Sodium Naphthalene Formaldehyde; SMF: Sulphonated Melamine Formaldehyde

benefits of various construction chemicals and hence tend to use low-cost substitutes.

Decisions are taken based on immediate cost and not on overall benefits achieved from the usage of these materials.

• Low entry barriers: The construction chemicals market is comprised of large MNCs as well as several local small-scale manufacturers. Due to low entry barriers, competition is high and several low value products are being sold in the market.

• Low awareness levels: Contractors are not adequately aware, the use of right type and quality of construction chemicals for durable structures. The durability of material is not been studied extensively by the manufacturer under Indian condition.

The chemical protection and maintenance is not well understood by the user. The application tools or accessories need to be updated. The code provision or the user guide line with product is missing.

Future outlook of the Industry Cement Consumption in India CAGR

5.3 6.5% -301 MT

-232 MT -169 MT

Central

24 32

West

37 49

50 60

58

39

East

25

South

54

North

34

46

2008

2013

75 60 58 2018

Source: Crisil, Industry reports, Tata Strategic analysis

Construction chemicals market has a huge growth potential due to the expected growth in construction and manufacturing sectors. With growth primarily driven by increasing construction activities in both new construction and repairs & rehabilitation technologies, demand for construction chemicals has increased. Many newly developed products give better performance and results. Hence, there is a shift in demand towards products offering better

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Focus : Construction Chemicals performance value-added products such as silicon caulks, specialty cement additives, polymer-based grouts and mortars etc.

Growth in urban housing sector: The cement consumption in India is growing at a rate of 5-6% driven by the growth in urban housing sector.

Housing sector contributes to 59% of overall cement consumption followed by commercial and industrial construction. Concrete consumption is likely to follow similar growth trends in India.

Currently, the use of RMC in construction is around 7% of domestic cement demand. This is expected to rise to 20-25% over the next few years.

Increasing penetration of construction chemical products: The penetration level of construction chemicals is currently very low in India as compared to other countries.

Spending on concrete admixtures ($/m3)

4.5

Construction Market Opportunity (INR) Trillion

2

18 16

1 12

10

India

China

USA

Source : Secondary research, industry reports

2

2

Industrial

Total

Infrastructure FY08-13

FY14-18

Source : Crisil research

Growth in end-use market: The Indian construction opportunity is expected to grow by 1.9 times over the next 5 years. This growth will be driven by investments in the infrastructure segment, which are expected to almost double over the next 5 years.

Government spending has been one of the key drivers of the growth of the construction industry.

The financial constraint on the government has been reduced by several public-private partnerships, hence increasing the focus on development. Other growth drivers are as follows: • National Manufacturing Policy which aims at enhancing share of manufacturing in national GDP from 16% to 25 % by 2022.

• Focus on Infra development: GoI commitment to increase spend in infrastructure to 10% of GDP in the 12th FYP. • Rising aspirations of large middle income group and changing demographics driving demand for residential real estate.

• Increasing urbanisation: 30% of Indian population is urban and Urbanization to grow to 40% by 2030.

• 100% Foreign Direct Investment (FDI) in real estate to boost construction activities.

• Increasing acceptability of ready mix concrete (RMC) is also leading to increased demand for construction chemicals.

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This is mainly due to insufficient understanding of the benefits of these compounds along with a lack of technical skills to use construction chemicals.

However, construction chemicals are finding increased usage driven by: • Increase in awareness about quality construction materials such as performance enhancing products among consumers and builders.

• Increased construction activities triggered by urbanization and development of rural areas which are still largely untapped markets.

• The use and access to foreign technology and the entry of foreign companies in the construction chemicals sector has eventually resulted in quicker growth of the construction chemical sector. Today several projects funded by multilateral agencies like ADB and World Bank have made use of good quality construction chemicals mandatory.

• Architects and consultants have realised the importance of quality construction chemicals and they generally tend to specify trusted brands of construction chemicals.

• CCMA (Construction Chemical Manufacturers Association) India, is an organized body working to promote the use of Construction Chemicals in India”. They conduct technical seminars and awareness programmes for the benefit of construction industry.

• The construction chemicals industry also provides technologies and products

to provide additional performance & endurance to structures and hence reduce the impact of corrosion. Chemicals including surface coatings, floorings, concrete-admixtures, corrosion-inhibitors, grouts-sealants, repair mortars protect the surface from corrosion by restricting the ingress of moisture & providing a ‘sealed’ structure.

With increasing awareness in the industry, the usage of construction chemicals as corrosion inhibitors is gaining popularity. Most projects in the country are expected to use these chemicals to reduce corrosions and increase the life of the asset. A special section has been included on Corrosion issue in the later part of this report.

Changing regulatory environment: Lack of government policies have always been the matter of concern for the growth of construction chemicals industry. However, upcoming government regulations as below aim to fix some of the loopholes in the industry: • Current and prospective regulatory guidelines incentivizing energy-efficient and green buildings are expected to drive demand for suitable, innovative protective coatings and safe chemicals.

• Compulsory usage of Ready Mix Concrete in Metros like Mumbai, Bangalore etc. is a key regulatory change. Similar regulations in Tier-I & other cities would be a key driver in increasing the usage of construction chemicals.

• With increased govt focus on investments in infra, increase in usage of RMC in Govt, infrastructure projects would boost the growth further.

Increasing compliance with international manufacturing standards: Indian Construction industry is fast adopting the best practices from across the world and implementing consumer standards matching with international standards.

This will help increase the current penetration levels of construction chemicals. Following eg.’s explain the upcoming trends which are driving the usage of construction chemicals: • Ban on onsite mixing of concrete is aimed at reducing pollution levels and in turn would generate demand for ready-mix concrete admixtures.

• Self-compacting concrete (SSC) is being preferred over normal-strength concrete as SSC doesn’t require external compaction and enhances strength of structure.

• Increased usage of SSC would drive ||www.constructionmirror.com||

the growth of special admixtures like plasticizers and retardants.

• High rise buildings are being developed in cities owing to space constraints. This trend is driving the growth of high performance concrete & increased use of admixtures & related construction chemicals.

• The Indian construction chemicals market is expected to show high growth rate of 15- 16% p.a., in the future. It is expected to reach ~INR 7,000-8,000 Cr by 2018 mainly driven by the untapped potential of the market and steady growth in the construction industry over the next 5-7 years.

Construction chemicals (INR Cr) 7,000-8,000

15-16%

3,600

2013

2018

Source : Industry reports, Tat Strategic estimates Source : Secondary research

Key growth imperatives

Construction chemicals industry has a good growth potential in the next 5 years. The industry needs initiatives from leading players, government, regulatory bodies, as well as industry associations/ federations to for growth. Key growth imperatives for industry players could be highlighted as: Strong marketing and increased customer awareness: Effective marketing of products is essential to make users aware of their applications and benefits. Manufacturers could consider investing in programmes to educate construction contractors about the benefits of using superior construction chemicals, in terms of lower project completion time and ease of usage. It is imperative to maintain longterm relationships with customers and exert influence over channel partners to retain foothold in the industry.

Skill development among workers: Providing technical training to workers about appropriate usage of these chemicals in construction will ensure correct application and better results, reinforcing the customers’ belief in the utility of construction chemicals. Industry and academia could tie-up to provide dedicated courses/ training on construction chemicals in engineering institutes as well as ITIs. Product innovation: Product innovation requires ||www.constructionmirror.com||

international standards. Focus on sustainability / green aspects, corrosion issues (which takes almost 3% of national GDP) will require innovation.

Construction chemical manufacturers must focus on development and marketing of innovative products (e.g. silicon-based sealants) which are expected to outgrow traditional products.

Low cost products: Companies with innovative, low cost products are likely to capture significant share of the market. Given the low awareness and price sensitive nature of the market, it will be challenging to get consumers to accept more expensive products.

Thus product innovation must also focus on creating affordable products with wide applications.

Adoption of modern techniques of delivery: Construction chemical companies could focus on adopting modern techniques of delivery such as on-site mixing of concrete and energy consumption in buildings by effectively liasoning with the government and the construction industry. The ability to deliver the product at the consumer’s doorstep would be key to success for construction chemicals players.

Government and regulatory bodies could play an important role in driving the growth of industry by focusing along the following lines: Increase infrastructural investments: Government’s initiatives towards infrastructural development are one of the major factors driving the growth of construction chemicals industry. The construction industry is witnessing support from World Bank and ADB and all the projects funded by these organizations necessitate the use of construction chemicals. 100% FDI in real estate sector would also significantly drive the growth of construction chemicals.

Policies for promotion of construction chemicals: Indian government’s initiative towards favourable policies like National Building Code and Green Building is estimated to boost the growth in construction chemicals market.

Define quality standards: Government and regulatory bodies could come together to define set quality standards for the industry. This would dampen the growth of low quality, cheap construction chemicals and incentivise players to invest in the industry. Organizations such as CCMA (Construction Chemical Manufacturers Association) India, can promote the use of Construction Chemicals in India by conducting technical seminars and awareness programmes for the benefit of construction industry.

Corrosion Management: Corrosion is a naturally occurring phenomenon commonly defined as the deterioration of a substance (usually a metal) or its properties because of a reaction with its

environment. According to the NACE International’s 2002 U.S. corrosion study, the direct cost of metallic corrosion is $276 billion on an annual basis, which represents 3.1% of the U.S. Gross Domestic Product (GDP). Extrapolating this figure globally, the cost of corrosion is over a trillion US dollars. Unlike weather related disasters, however, corrosion can be controlled, but at a cost. It is estimated that a third of this cost can be saved by current technologies and awareness of the problem. Corrosion is so prevalent and takes so many forms that its occurrence and associated costs cannot be eliminated completely.

However, it has been estimated that 25 to 30% of annual corrosion costs could be saved if optimum corrosion management practices were employed.

The use of appropriate corrosion prevention and control methods can ensure public safety, prevent damage to property and the environment, and saves billion of dollars worldwide. Various time proven methods for preventing and controlling corrosion depend on the specific material to be protected; environmental concerns such as soil resistivity, humidity, and exposure to saltwater or industrial environments; the type of product to be processed or transported; and many other factors. The most commonly used methods include organic and metallic protective coatings; corrosion resistant alloys, plastics, and polymers; corrosion inhibitors; and cathodic protection-a technique used on pipelines, underground storage tanks, and offshore structures that creates an electrochemical cell in which the surface to be protected is the cathode and corrosion reactions are mitigated.

Paints industry to grow to Rs 70,875 Cr by 2019-20

The Indian paint market is expected to reach Rs.70,875 crore by 2019-20 from around Rs.40,300 crore in 2014-15, the paint industry’s apex body projected. The decorative paint market is expected to witness CAGR of 12.7% and the industrial paint market CAGR of 9.5 %, according to Indian Paint Association (IPA)’s to be launched report on the Indian Paint Market - “Size & Future of coating industry” compiled by Nielsen Corporation. The split of the decorative paint market to industrial market is around 75-25.

Decorative paint market size in the country was Rs 30,385 crore and the Industrial Paint Rs 9,915 crore in FY 2014-15, the IPA said in a release here.

The industry had grown at a CAGR of 12.9 % from 2011-12 to 2014-15 in terms of value, it said adding that for FY 2014-15, the per capita consumption of paint in India was estimated at 3.34 Kg. High growth was witnessed for Exterior and Interior emulsions in the decorative paints category and Auto refinish and Powder coatings in the industrial paints category.

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Industry Feature: Roofing & Cladding

Roofing and Cladding industry: Market size,Trends and Challenges

T

he Indian construction industry has witnessed a significant evolution in roofing systems across different sectors. The current status of roofing industry also gives a special focus on asbestos, tile and metal roofing segments, which makes it happening ever before. With a dedicated impetus on infrastructure segment, the future of roofing and cladding segment is going to reach beyond expectation. Roofing industry in India is preparing for the next generation of ambitious projects.

Growth in the infrastructure and industrial segment has been a major demand driver for roof and wall cladding industry. It has registered a double digit growth over past three years and the future of this industry is also looking bright considering the low steel penetration and high demand in construction industry. The current trend is the use of colour coated metallic roofing systems across all the major greenfield and brownfield projects.

After increased awareness on hazards associated with production and usage of asbestos roofing, the roofing requirements of the Indian customers are met in the form of metallic and nonmetallic types.

The major reasons for this practice are durability, high strength, economical and faster construction, design flexibility and improved aesthetics.There is also growing awareness about the advantages of sustainability and long term cost effectiveness since the future is in sustainable materials. Turnkey projects where roofing is not just a structure to cover the building but an integral part of the entire space provides support to other systems such as HVAC, lighting, energy generation and so forth.

Then there is pre-engineered buildings which have emerged and provided cost effective roofing 48 CONSTRUCTION MIRROR

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solutions. With more optimum designs and better quality construction, the building construction costs have lowered at the same time, with quality standards.

Market Size and Trends

The Indian roofing industry has witnessed a sustainable growth and is preparing for its next generation of ambitious projects. A major shift is observed from clay tiles and conventional roofing systems to metal cladding solutions. Today customers are looking for architectural solutions which enable innovative shapes in addition to attractive colours. The key issues facing the roofing market at present is an emphasis on lowering costs, at any cost. This has led to sub-standard construction and deterioration on quality, increasing costs for the client in the longer run. Educating the market on the importance of quality and the advances in roofing is a trend that has developed due to this issue. Also compromising on costs also brings the problem of leaking. Unskilled labour, no expert supervision and other by-products of cheap materials lead to a building without adequate weatherproof. Another trend is the emphasis on sustainability as mentioned above and safety as well. Worker conditions and the feasibility of the structure for long use and expansion are taken into account by knowledgeable clients and roofing system providers.

The total market size of steel roofing industry is approximately 1MT. The Indian market has witnessed a major shift from asbestos and galvanized steel sheets to Zn-Al coated sheets.

Asbestos consist of carcinogenic material, has low strength and cracks easily. Also, increased corporate and public awareness about climate

change has resulted in new initiatives like green building concept and elimination of carcinogenic materials.Moreover, Zn-Al coated sheet provides excellent atmospheric resistance in a wide range of environment under many diverse conditions.

Aesthetics, superior technology, durability, thermal efficiency are some of the significant driving factors for Zn-Al coated sheets. Performance of 150GSM Zn-Al coated material is four times longer than 275 GSM Zn coated material.

Mantri Adarsh Gram Yojna which are expected to provide long-term strength to the roofing market.

There are estimated 25 crore houses in India of which 46% are considered to be homes with pucca roofs and rest made of thatch (Kutcha roofing) and clay tiles. In rural areas alone, security concerns along with increased income level has led to an increase in the desire of shifting from kuccha house to pucca house. On the other hand increased construction in urban areas and infra development activities like construction and renovation of airports, metro rails, SEZs, industrial cities and IT parks have kick-started the demand for modern, efficient roofing systems.

Overall, the roofing market is witnessing healthy growth on the backdrop of consistent development in infrastructure and rising disposable income both in urban as well as rural areas.

There is a wide spectrum of roofing materials, which are used for different structural, aesthetic, economic and performance reasons. Roof designs have developed from just being a weather performance element to an architectural trademark that can be environment friendly, structurally sound, reasonably priced and aesthetically attractive.

As per data, about 55% of the Indian market continues to use RCC, followed by clay tiles (18%). ||www.constructionmirror.com||

Fibre cement sheets contribute around 11%. The segment seeing an increasing demand is metal roofing which expects to see a growth of 30% CAGR. This growth is predominantly seen in developed states, cities and rapid urbanization. Although rural regions account for a higher number of houses in India, the roofing solutions opted by them are generally cheaper than their urban counterparts.

Asbestos cement roofing installed capacity is expected to witness steady growth over the next five years. Some of the leading players in the fibre roofs have come a long way. Today’s metal roofs are attached to the structure with concealed clips, which slide to accommodate expansion and contraction. Manufacturing industries such as power, automobile, engineering goods and services including logistics, warehouses and infrastructure are large users of PEB. Leading players in the metal roofing industry are Lloyds Insulations, Tata Bluescope Steel, Kirby, Pennar and Interarch.

The total market for steel roof and wall cladding industry alone is about a million tonne and has registered near to double-digit growth over the past 3 years. There also seems a major shift from galvanized steel sheets to Zn-A cement roofing sector are Everest, HIL, Vishaka and Ramco. RCC is widely used in India owing to its cost effectiveness & versatility. Since most structures that people inhabit are residential or commercial buildings, they go with reinforced cement concrete (RCC) roofs. Metal roofing as a concept was introduced a few decades back to replace asbestos cement panels. The idea gained ground with the evolution of pre-engineered steel buildings for industrial manufacturing sectors. Since then, metal coated sheets as the latter provides excellent atmospheric resistance in a wide range of environment under many diverse conditions. Aluminum products are

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also getting recognition in the market because of the flexibility offered to designers. Applications like flat roofing where metal profile have limitations from viewpoint of weather tightness, nonmetallic outer finishes like TPO, PVC or EPDM are offered as part of roofing assemblies.

Sandwich panels with metal facing are also receiving good acceptability from industrial as well as commercial sectors due to their providing “one-step” solutions to insulation and weather tightness. These panels incorporate mineral fibre to provide thermal insulation and eliminate interstitial condensation and cold bridging. They offer rigid and lightweight construction, with no vapour or breather membranes required, and being a single unit, significantly reduce installation time. Composite panels are suitable for use on all building types in the commercial, retail and industrial sectors, providing flexibility for change of future use. They can also be installed over existing sheet-covered roofs to improve thermal insulation and weather protection. Revamping airports has led to the emergence of aluminum built-up and single ply membrane built-up roofing systems.

Architectural trends have been of considerable importance to the level of demand for roofing materials in luxury housing. Over the years, architects have largely developed a preference for the use of more traditional materials such as slates and clay tiles because of the environmental and aesthetic advantages that they bring.Shingles are also becoming increasingly popular in the country.

Shingles are fiberglass reinforced, high grade, mineral- stabilized asphalt based mats which are overlaid with high strength ceramic coated granules and underplayed with a mineral stabilizer cum fire retardant. They come with multiple-laminate options and in a wide variety of colors and they

can be applied on sloped roof which could be of concrete,wooden or any such solid plane material.

With the Government of India’s Solar Mission, companies like Lloyd Insulations are working on a few proposals wherein PV Solar Panels are integrated with almost all types of roofs.Challenges involved are integrity of the entire roof from view point of water tightness and structural integrity of PV solar panels. The company has engineered PV solar systems with its roofing applications with importance given to cost economics and track records. Other solar technologies that can revolutionize the Indian roofing industry are the latest generation of thin film solar and photovoltaic panels that look like ordinary shingles. PV laminate is a superior method of integrating photovoltaic with metal roofing. The laminates have a peel and stick backing that enables them to be attached to the metal roofing panels in the shop or at the site.

When applied directly to the standing seam metal roofing of dark colours, it is hardly discernible from ground level.

PV laminates work well in cloudy, low-light environments, capturing different light wavelengths and allowing current to flow around shaded areas of the laminate. They also perform well in coastal conditions and in industries where there is a lot of airborne dirt and particles. Moreover as they are directly applied to the metal roofing and do not require framing,they are cost effective than conventional solar panels. Solar roof tiles are lightweight tiles or shingles that look like normal tiles and the installation process is similar to that of normal roof tiles except that solar roof tiles must always be bordered by normal roofing tiles. The tiles are coated with PV cells made of amorphous silicon. They can be designed to look

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Industry Feature: Roofing & Cladding

like conventional asphalt shingles and can be used instead of roofing materials such as asphalt shingles, standing seam metal roofing and slate or concrete tiles. Also, solar tiles can be blended with existing asphalt roofing tiles, are waterproof and designed to withstand heavy sun and natural elements. In the near future, most companies expect at least 50% of the roofs in industrial, commercial and public buildings will be with PV solar systems.

Green roofs are also coming to the fore with the emphasis on sustainability and efforts to mitigate the urban heat island effect. However, they are still in nascent stages in the country due to the lack of awareness and knowledge required for installation and maintenance.

Roofing industry has witnessed a paradigm shift in the last few years. With increased investment in infrastructure projects, customers are demanding durability, flexibility along with aesthetically pleasing designs. It is observed that customers are shifting from conventional screw-down system to concealed fixed system. In screw down system, 50 CONSTRUCTION MIRROR

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the screws are exposed to the atmosphere. Due to poor workmanship and use of low quality fasteners they often leak and rust. On the other hand, in concealed fixed system, sheet sare fixed on clips which in turn are screwed on purlins, this reduces the chances of leakages. Roofing industry in India is preparing for the next generation of ambitious projects. Growth in the infrastructure and industrial segment has been a major demand driver for roof and wall cladding industry. It has registered a double digit growth over past three years. Major shift is observed from clay tiles and conventional roofing system to metal cladding solution. Customers are looking for architectural solution which provides innovative shapes such as convex, concave in addition to new attractive colors.

The future of roof and wall cladding industry is bright considering the low steel penetration and high demand in construction industry.

Challenges

The presence of large organized players is limited in the roofing industry. Unavailability of skilled

manpower for installation, low product quality and lack of safety awareness are the increasing challenges for roofing industry. Having set several benchmarks for safety in the industry, our stateof-the-art manufacturing facilities have achieved ISO 14001:2004, environment Accreditation and OHSAS 18001:2007 on Safety system. Safety is an integral part of our core values and an essential condition for employment. We regularly educate our stakeholders – employees, customers, builders, suppliers, partners, on best safety practices.We constantly aspire to achieve “Zero Harm” for all our stakeholders in all forms of activities.

Problems with metal roofing: Today, manufacturers recommend a minimum roof pitch of 8° for installing corrugated sheet roofing, but in many situations art deco houses had corrugated roofing installed with roof pitches of 7° or less. This may have resulted in water getting under the laps between sheets or at flashing locations and being unable to readily drain out. There may also be ponding of water at any lower points or indentations in the roofing. ||www.constructionmirror.com||

If the roofing material is the original corrugated galvanised steel, it may require replacement. If this is the case, unless the roof pitch is 8° or greater, a different metal roof profile such as a trough section roofing must be installed. Trapezoidal symmetrical and unsymmetrical rib profiles and standing seam, fully supported flat sheet metal roofing materials may be used with roof pitches as low as 3°. Confirm manufacturer’s’ recommendations for minimum roof pitch for specific materials. It is important, particularly when replacing membrane with profiled metal on a low pitch, to ensure that flashings or internal gutters are extended sufficiently under the roofing material to prevent water tracking or being blown under the roofing and leaking beyond the flashing. Generally, to avoid this risk, it is advisable to replace low-pitched roof cladding with a membrane system with gutters integrated into the membrane.

Problems with built-up Roofing: The early built-up roofing had a limited life span as bituminous materials were prone to a number of problems including: hardening and cracking of the membrane; rotting of organic fibres in early the felts as the bituminous coating deteriorated allowing moisture to penetrate; differential movement between the roofing material and the substrate and insufficient elasticity in the roofing; loss of adhesion of stone chips and subsequent loss of UV-protective coating to the membrane; breakdown of the paint finish and subsequent loss of UV-protective coating to the membrane. Roofs with low pitches that were slow to drain, were more likely to suffer some water penetration through any minor breaches in the roofing membrane and this may result in eventual failure of the roofing.

Deterioration of Roof Framing: Moisture, whether from external sources or from internal condensation (see below) may lead to deterioration of timber roof framing. Roofs should be checked for evidence of sagging, which may be due to inadequate

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timber sizes, or rot, which may be due to moisture penetration.

Condensation and Trapped Moisture: Because art deco houses were hard lined and uninsulated, there is a risk that condensation will occur on walls and ceilings, particularly where the house is shut up during the day, and particularly where the original timber windows have been replaced with aluminium. Ensuring that the house is well ventilated, insulated if possible, and heated, will reduce the amount of condensation forming. An issue that can arise with low-slope skillion roofs is the accumulation of moisture within the roof space, which can form as droplets on the underside of the timber sarking or metal roofing. Research has shown that moisture within roof spaces is carried there by air movement from moist internal spaces into the roof space. A number of art deco houses incorporated vents into parapet walls to provide ventilation of the roof space. Where there is a membrane roofing system, some of this moisture is transferred through the permeable substrate and then condenses (on cold nights) on the underside of the membrane. As the sun warms the roofing in the morning, the moisture cannot escape back through the substrate, and bubbles form as the water tries to dry to the outside. Unless the source of moisture is removed, the bubbles will continue to expand, and because the substrate remains wet, there is an increased risk of timber damage. For metal roofing, droplets that form on the underside of the metal may drip back down onto the ceiling, which may result in damage to the ceiling and/or ceiling framing.

Problems with corrosion: Corrosion of metal components such as the roofing, fixings, flashings or accessories, may appear as the familiar red rust, or as a white discolouration on the surface of materials containing zinc, which is called white rust. It may be caused by: moisture combined with salt spray, dirt, or hydrogen sulphide from coal-burning fires

or geothermal activity; contact between dissimilar metals resulting in electro-galvanic action; runoff from copper-based timber treatments. Houses/PEBs built close to the sea are likely to be affected by salt or chloride contaminants. The parts of the house most likely to be affected are the subfloor, roof cladding and flashings, window and door flashings and cladding nails.

No Underlay: It was not uncommon for walls and roofs of art deco houses to be built without any form of building paper or underlay. If they have previously been re-roofed or reclad, underlay may or may not have been installed. Options for retrofitting underlay include to install underlay: when replacing roofing; by folding into the framing cavities for walls when the interior lining is being replaced.

Unavailability of skilled manpower for installation, low product quality and lack of safety awareness, presence of unorganized players coupled with installation issues are some of the challenges that are putting a damper in the growth of the Indian roofing industry. Again, India is a country with several geographical and weather variations across the region. Roofing solutions need to be adapted as per a region’s climate and creating customized roofing solutions that are suitable for each of these regions is a big challenge for the industry. Rising and fluctuating input costs such as that of steel also hamper the supply side of the roofing industry value chain. Under such a condition it becomes difficult for the manufacturer to develop innovative and customized products at affordable costs. The roofing industry is a dynamic industry, with new innovations, materials and tools cropping up on a regular basis. With the rising importance of roofing design and the adoption of “green” products, the sector is all geared up to go through the roof in the coming decades.

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Special Future: CRGO & CRNGO

Application of CRGO & CRNGO Grain oriented Electrical Steel CRGO is undoubtedly the most important soft magnetic material in use today. Wheather in small transformer, distribution transformer or in large transformer & generator, grain oriented electrical steel CRGO is a must for the production of energy saving electrical machines. Grain oriented Electrical Steels are iron-silicon alloys that provide low core loss and high permeability needed for more efficient and economical electrical transformers. CRGO Grain oriented grades of electrical steel are typically used for transformer cores and large generators.

Non-oriented Electrical steel CRNGO fully processed steels are iron-silicon alloys with varying silicon contents and have similar magnetic properties in all directions in plan of the sheet. Non-oriented Electrical steel are principally used for motors, generators, alternators, ballasts, small Transformers and a variety of other electromagnetic applications.

The earliest soft magnetic material was iron, which contained many impurities. Researchers found that the addition of silicon increased resistivity, decreased hysteresis loss, increased permeability, and virtually eliminated aging.

Substantial quantities of Grain oriented Electrical steel CRGO are used, mainly in power and distribution transformers. However, it has not supplanted non-oriented Electrical steel, which is used extensively where a low-cost, low-loss material is needed, particularly in rotating equipment.

Mention should also be made of the relay steels, used widely in relays, armatures, and solenoids.

Relay steels contain 1.25 to 2.5% Si, and are used in direct current applications because of better permeability, lower coercive force, and freedom from aging Important physical properties of Electrical steels (CRGO) include resistivity, saturation induction, magneto-crystalline anisotropy, magnetostriction, and Curie temperature. Resistivity, which is quite low in iron, increases markedly with the addition of silicon. Higher resistivity lessens the core loss

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by reducing the eddy current component. Raising the silicon content will lower magnetostriction, but processing becomes more difficult. The high Curie temperature of iron will be lowered by alloying elements, but the decrease is of little importance to the user of CRGO Electrical steels.

The magnetization process is influenced by impurities, grain orientation, grain size, strain, strip thickness, and surface smoothness. One of the most important ways to improve soft magnetic materials is to remove impurities, which interfere with domain-wall movement; they are least harmful if present in solid solution. Compared with other commercial steels, Electrical steel is exceptionally pure. Because carbon, an interstitial impurity, can harm low induction permeability, it must be removed before the steel is annealed to develop the final texture.

The mechanism for the growth of grains with cube-on-edge orientation during the final anneal is not completely understood. The process involves secondary recrystallization, which, by definition, is characterized by accelerated growth of one set of grains in an already recrystallized matrix.

For secondary recrystallization, normal grain growth must be inhibited in some manner. As the temperature is raised, certain grains break loose from the inhibiting forces, and grow extensively at the expense of their neighbors. Producers know that, on a practical basis, appropriate cold rolling and recrystallization sequences must be carefully followed to obtain the desired secondary recrystallization nuclei and the correct texture.

Today`s Electrical Steels use MnS as the grain growth inhibitor, but other compounds, such as carbides, oxides, or nitrides, are also effective.

CRGO Making and using Grain oriented Electrical steel: Grain Oriented Electrical Steel (CRGO) is more restricted in composition than non-oriented varieties. The texture is developed by a series of careful working and annealing operations, and

the material must remain essentially single-phase throughout processing, particularly during the final anneal because phase transformation destroys the texture. To avoid the y loop of the Fe-Si phase system, today’s commercial steel has about 3.25% Si. Higher silicon varieties, which might be favored on the basis of increased resistivity and lower magnetostriction, are precluded by difficulties in cold rolling.

Temperature, atmosphere composition, and dew point are closely controlled to decarburize the strip without oxidizing the surface. During this treatment, primary recrystallization occurs, forming small, uniform, equiaxed grains. The coating of magnesium silicate glass which forms will provide electrical insulation between successive laminations when assembled in a transformer core. At this stage, the Electrical steel is graded by cutting Epstein samples from the coil; the samples are stress relief annealed and flattened at 790°C, and tested for core loss.

Applications for CRGO Grain oriented Electrical Steel include transformers (power, distribution, ballast, instrument, audio, and specialty), and generators for steam turbine and water wheels.

Lay-up cores, in general, utilize the whole spectrum of grain oriented Electrical steel CRGO quality and gages. The gage and grade of material for a given application are determined by economics, transformer rating, noise level requirement, loss requirements, density of operation, and even core size. Because the strip must be flat to produce a good core, coils are flattened after the high temperature anneal. Then, the strip is coated with an inorganic phosphate for insulation. Samples from each coil end are graded after a laboratory stress relief anneal, as previously described. From such strip, the transformer manufacturer cuts his required length improves the insulation of the strip.

Consequently, it decreases the eddy current losses and heat buildup, which is of particular importance in transformers which must withstand an impulse

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APRIL 2017 ||

CONSTRUCTION MIRROR

53

Special Future:CRGO & CNRGO test.

As noted earlier, an important requirement in the manufacture of lay-up cores is minimizing transformer noise. Noise is a function of manufacturing and core design factors, the core material characteristic being one of the most important. The dependence of magnetostriction on silicon content has already been noted. In addition, magnetostriction is reduced by improving the texture and by introducing tensile stresses through application of glass-type insulation coatings. Because compressive stresses affect magnetostriction adversely, it is important that the lamination remains flat for assembly. Operating induction is also a factor that affects noise, and indeed affects the transformer`s general operating characteristics. Operating inductions of lay-up transformers are usually in the 10,000 to 17,000 G range; power ratings extend over the 500 to 1,000,000 kVA range. Wound cores are wound toroidally with the [100] crystallographic direction around the strip. Processing steps are somewhat different from those used for lay-up transformers though the starting material is the same-large toroidally annealed coil coated with magnesium silicate, which usually provides sufficient insulation.

Grain oriented Electrical steel CRGO for wound core application, unreacted MgO powder is removed from the strip surface, and a sample from each coil end is cut into Epstein strips to be tested as before. After being graded, the coil is shipped to the transformer manufacturer either as slit multiples or as a full-width coil for subsequent slitting. The slit multiple, wound to the given core dimension, must be stress relief annealed at 790°C in a dry non-oxidizing atmosphere. Annealing trays and plates must be of low carbon steel to eliminate any carbon contamination, which can be very detrimental to quality.

After crgo being stress relief annealed, the cores are cut, and the crgo transformer core is assembled by lacing the steel around the copper (or aluminum) current-carrying coils. In the stress relief annealed condition, grain-oriented steel CRGO electrical steel is sensitive to mechanical strain; therefore, cores must be assembled carefully. Regardless of how carefully assembly is accomplished, the final core quality is always poorer than it was in the stressrelief annealed, uncut condition. The difference in quality, commonly referred to as the “destruction factor”, is due to the relative strain sensitivity of the grain-oriented CRGO steel, the handling procedure in fabrication, and the uniformity and amount of air gap in the core. Being a function of the transformer design and fabrication, the latter two

54 CONSTRUCTION MIRROR

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factors are controlled best by the manufacturer. Most CRGO wound cores are utilized in distribution transformer applications of 25 to 500 kVA.

Making and using CRNGO non-oriented Electrical steels

Non-oriented electrical steels do not use a secondary recrystallization process to develop their properties, and high temperature annealing is not essential. Therefore, a lower limit on silicon, such as is required for the oriented grades, is not essential. Non-oriented electrical steel grades contain between 0.5 and 3.25% Si plus up to 0.5% Al, added to increase resistivity and lower the temperature of primary recrystallization.

Grain growth is very desirable in the (CRNGO) non-oriented electrical steel grades, but is generally much smaller than for the oriented electrical steel CRGO grades.

Processing to hot rolled band is similar to that described for the oriented grade. After surface conditioning, the bands are usually cold rolled directly to final gage, and sold to the transformer manufacturer in one of two conditions fullyprocessed, or semi processed. After final cold rolling, the strip is annealed, decarburizing it to 0.005% C or lower and developing the grain structure needed for the magnetic properties. Samples are then taken from each coil end, and tested. CRNGO Fully processed non-oriented Electrical steels are generally used in applications in which: Quantities are too small to warrant stress relieving by the consumer, or CRGO Laminations are so large that good physical shape would be difficult to maintain after an 843°C stress relief anneal.

Non-oriented steels CRNGO are not as sensitive to strain as the oriented product. Consequently, shearing strains constitute the only strain effects, which should degrade the magnetic quality. Because laminations are generally large, these shearing strains can be tolerated. Most of the fully processed grades are used as stamped laminations in such applications as rotors and stators. The non-oriented electrical steels (CRNGO) have a random orientation.

They are commonly used in large rotating equipment, including motors, power generators, and AC alternators. Fully processed steels are given a “full” strand anneal (to develop the optimum magnetic quality), making them softer and more difficult to punch than semi-processed products.

Grades with higher alloy content are harder and thus easier to punch. Improved punchability can be provided in fully processed steels by adding an organic coating, which acts as a lubricant during stamping and gives some additional insulation to the base scale. If good inter-lamination resistance is required, fully processed material can be purchased

with core plate.

Semi processed electrical steel CRGO products are generally given a lower-temperature decarburizing anneal after the final cold rolling. Carbon is not necessarily removed to the same low level as in fully processed material. The transformer manufacturer will subsequently stress relief anneal the material in a wet decarburizing atmosphere to obtain additional decarburization and develop the magnetic properties. Samples are taken after the mill decarburization anneal, cut into specimens, decarburized at 843°C for at least one hour and tested to grade the coil.

Semi processed CRGO non-oriented electrical steels are used for applications in which the customer does the stress relief anneal. In general, such products have good punching characteristics, and are used in a variety of applications including small rotors, stators, and small power transformers. Semi processed electrical steels can be purchased with a tightly adherent scale, or with an insulating coating over the oxide. The organic coating acts as a lubricant during punching, but it does not withstand stress relief annealing temperatures; therefore, it is not applied to semi-processed material.

The CRGO factor

A key factor that has posed some serious problems for the transformer manufacturing sector is the non-availability of cold-rolled grain-oriented (CRGO) material which has to be entirely imported.

The problems regarding CRGO acquisition includes import of defective CRGO by unscrupulous suppliers, as well as procurement of this material. As a result, there have been heavy losses in distribution.

Industry insiders say that there is a huge amount of second grade material available in the market which is used by local manufacturers to be more competitive. The CRGO steel grains are much larger than the size of regular steel, approximately 2mm to 5mm, while the regular steel is about 0.5mm.

This remarkable size difference allows reducing Hysteresis losses (the power expended in a magnetic material due to the lack of correspondence between the changes in induction resulting from increase or decrease of magnetizing force). Moreover, the chemical composition of CRGO steel consists of higher percentage of silicon. This, in turn, helps to increase the resistance c o m p a r e d to regular steel which helps to reduce eddy currents (the energy lost by circulating current included in the metal by the variation of magnetic fields in the metal). While designing a distribution transformer, the main stress is put on the reduction of core losses.

CRGO steel is one of the preferred options in such cases, with an allowable limit of flux density of up to 1.55 Tesla for low core losses. Although the cost of transformer comes down once the distribution

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transformer is designed above 1.55 Tesla, the performance deteriorates in terms of efficiency.

In the Indian context, CRGO steel is especially important because it can serve as a balancing material in the costing of transformers. With the competitive pressure related to pricing increasing by the day, the only ‘A’ class item of significant value that can help reduce costs is CRGO. The country consumes 250,000 metric tonnes (MT) of CRGO sheets every year.

However, out of this only 80,000 MT is prime material while the rest is of second grade quality.

One major problem with CRGO is that it is not manufactured in India and the local transformer industry is entirely dependant on the import of this material from about 15 foreign companies.

The technology is guarded pretty closely and perhaps this is the only reason that technological collaborations with Indian companies have not been taking place. CRGO usage by transformer manufacturers poses two major challenges: There are some marginal distribution transformer manufacturers who intentionally use cheap and sub-standard CRGO, which helps them quote lower during the procurement process of power utilities There are some manufacturers who end up using substandard CRGO out of ignorance due to the fact that there is absolutely no way of knowing the quality of imported CRGO.

Root of the problem

India has a notorious distinction of having the highest transformer failure rate, which is significantly higher than even some of the less developed countries. Studies reveal that while the global level for transformer failure is around 5%, India’s transformer failure rate is around 20-2%. This is an indication that the country is using sub-standard transformers. The Indian government’s poor Lowest Pricing (L1) procurement technique is one of the main reasons behind this failure. The L1 policy, which encourages contracts being offered to those who quote the lowest price, kills the question of quality. As a result, transformer

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manufacturers are known for quoting ridiculously low prices while bidding for the government-backed contracts. They are able to quote such ridiculous price because of their intentional use of inferior scrap CRGO. This also makes manufacturing high quality transformer difficult because quality manufacturers are not rewarded with contracts. The Steel Quality Control has been trying to fight this issue for quite sometime now.

The Second Steel Quality Control Order

The Second Steel Quality Control Order which came into effect from September 12, 2012 made it mandatory to have the Bureau of Indian Standards (BIS) certification for CRGO steel which directly impacted the transformer manufacturers. Even though this measure might seem to be one of the key initiatives taken by the government to ensure credibility and better quality, this will directly impact the productivity of small manufacturers.

In fact experts also feel that these regulations will bring the transformer industry to a standstill in the near future, if there is not adequate number of certified mills. At present out of the 14 global CRGO manufacturing companies, only three have got their product BIS certified. If more companies do not get their products approved by BIS, India is bound to be confronted with multiple problems with lack of CRGO stock being only one of them. This scenario is alarming because CRGO continues to be a critical factor for modern transformer manufacturing.

India’s demand for CRGO is expected to be around 2.5 lakh tonnes annually given the kind of planned capacity addition during the 12th FYP period. An interesting fact worth noticing is that the Steel Quality Control Order has no significant implication on finished import goods. This implies that while the Indian transformer manufacturers would struggle to get hold of BIS certified CRGO for the production of their transformers, imported transformers can get unmindfully entry into the Indian market.

The domestic transformer manufacturers have so far successfully managed to meet the country’s power sector ambitions over the years and also

significantly enhanced the production capacity.

However, absence of CRGO, as a result of the inability to procure BIS certification would mean that this capacity will become unproductive and most of the demand will be met by imports. While the government’s intention might be good as it tries to curb inferior CRGO, it has certain limitations.

The positives

However, not everyone feels that the Second Steel Quality Control Order is a move in the wrong direction. Some experts opine that there is no way back from here. Even though there are certain issues that need to be addressed, for example, whether BIS certification is needed only for transformers manufactured in India or do they apply for those imported from outside, the overall move is definitely a step in the right direction. Many industry experts also feel that the quality control order has its own limitations. Something needs to be done urgently about the intentional and willful use of secondary CRGO by a rising group of marginal distribution transformers. Experts from the IEEMA opine that the basic objective of this order, which is to improve the quality of Indian transformers, has to be acknowledged. However, there still remains scope for improvement. They also put special emphasis on the point of clarity, which they feel would be necessary for successful implementation of the programme. The first of the many steps would be to get CRGO suppliers to get BIS certification.

Even though some domestic companies like the Steel Authority of India (SAIL) had started producing CRGO internally, they have now stopped operation.

According to Indian Transformer Manufacturers Association (ITMA) representatives, this is being done by those who control imports. Tata-owned Chorus is yet another firm that has stopped production of CRGO steel. These companies have been looking for tie-up opportunities with foreign companies to manufacture CRGO steel.

Plans of CRGO production in India

One step that has been taken in the right direction

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Special Future:CRGO & CNRGO is the plan of setting up a joint venture which will be engaged in manufacturing CRGO and CRNO (cold-rolled natural-oriented) steel. Rashtriya Ispat Nigam Ltd (RINL), commonly known as Vishakhapatnam Steel Plant, has signed an agreement with the Power Grid Corporation of India for the production of electric steel. The total investment in this venture is expected to be around INR 3,000 crore. The new facility will have the ability of producing 1.5 lakh tonnes of CRGO and 1 lakh tonnes of CRNO. It should here be mentioned that SAIL was supposed to partner Bharat Heavy Electricals Ltd (BHEL), Manganese Ore (India) Limited (MOIL) and Power Grid Corporation for a joint venture to produce electric steel. SAIL opted out of this deal paving way for RINL to chip in. Therefore, a lot still needs to be done before realizing the effects of BIS certification properly. With the fear of inferior CRGO usage looming large over the industry, making the BIS certification mandatory is a step in the right direction. But the government also needs to ensure proper implementation and adoption. Once a few suggested and planned steps are taken, the transformer manufacturing sector is bound to bear its fruits.

Minimising Iron Losses

Choice of metal is critical for transformer cores, and it’s important that good quality magnetic steel be used. There are many grades of steel that can be used for a transformer core. Each grade has an effect on efficiency on a per-kg basis. The choice depends on how you evaluate non-load transformer losses and total owning costs. Almost all transformer manufacturers today use steel in their cores that provides low transformer losses due to the effects of magnetic hysteresis and eddy currents. To achieve these objectives, high permeability, cold-rolled, grain-oriented, silicon steel is almost always used.

Construction of the core utilizes step lap mitered joints and the laminations are carefully stacked.

The evolution of materials used in transformer core is summarised below.

Year(Approx)

Core material

Thickness (Mm)

1910

Warm rolled FeSi

0.35

Loss (W/Kg At 50hz) 2

1.5 T

1950

Cold rolled CRGO

0.35

1

1.5 T

1960

Cold rolled CRGO

0.3

0.9

1.5T

1965

Cold rolled CRGO

0.27

0.84

1.5 T

1975

Amorphous metal

0.03

0.2

1.3 T

1980

Cold rolled CRGO

0.23

0.75

1.5 T

1985

Cold rolled CRGO

0.18

0.67

1.5 T

There are two important core materials used in transformer manufacturing: Amorphous metal and CRGO (Cold Rolled Grain Oriented, It can be seen that losses in amorphous metal core is less than 25% of that in CRGO. This material gives high permeability and is available in very thin formations 56 CONSTRUCTION MIRROR

|| APRIL 2017

(like ribbons) resulting in much less core losses than CRGO. The trade off between the both types is interesting. The use of higher flux densities in CRGO (up to 1.5 T) results in higher core losses. However, less amount of copper winding is required, as the volume of core is less. This reduces the copper losses. In amorphous core, the flux density is less and thinner laminations also help in reducing core losses. However, there is relatively a larger volume to be dealt with, resulting in longer turns of winding, i.e. higher resistance resulting in more copper losses. Thus iron losses depend upon the material and flux densities selected, but affect also the copper losses.

If you’re considering the use of an amorphous core transformer, you should determine the economic trade off. In other words, the price of the unit versus the cost of transformer losses. Losses are especially important when transformers are lightly loaded, such as during the hours from about 9 p.m. to 6 a.m. When lightly loaded, the core loss becomes the largest component of a transformer’s total losses.

Thus, the cost of electric power at the location where such a transformer is contemplated is a very important factor in carrying out the economic analyses. Different manufacturers have different capabilities for producing amorphous cores, and recently, some have made substantial advances in

Amorphous cores

A new type of liquid-filled transformer introduced commercially in 1986 uses ultra low-loss cores made from amorphous metal.

The core losses are between 60% to 70% lower than those for transformers using silicon steel. To date, these transformers have been designed for distribution operation primarily by electric utilities and use wound-cut cores of amorphous metal. Their ratings range from 10kVA through 2500 kVA. The reason utilities purchase them, even though they are more expensive than silicon steel core transformers, is because of their high efficiency. The use of amorphous core liquidfilled transformers is now being expanded for use in power applications for industrial and commercial installations. This is especially true in other countries such as Japan. Amorphous metal is a new class of material having no crystalline formation.

Conventional metals possess crystalline structures in which the atoms form an orderly, repeated, three-dimensional array. Amorphous metals are characterized by a random arrangement of their atoms (because the atomic structure resembles that of glass, the material is sometimes referred to as glassy metal). This atomic structure, along with the difference in the composition and thickness of the metal, accounts for the very low hysteresis and eddy current losses in the new material. Cost and manufacturing technique are the major obstacles for bringing to the market a broad assortment of amorphous core transformers. The price of these units typically ranges from 15% to 40% higher than that of silicon steel core transformers. To a degree, the price differential is dependent upon which grade of silicon steel the comparison is being made. At present, amorphous cores are not being applied in dry-type transformers. However, there is continuous developmental work being done on amorphous core transformers, and the use of this special metal in dry-type transformers may become a practical reality sometime in the future.

making these cores for transformers. The technical difficulties of constructing a core using amorphous steel have restricted the size of transformers using this material. The metal is not easily workable, being very hard and difficult to cut, thin and flimsy, and difficult to obtain in large sheets. However, development of these types of transformers continues, you can expect units larger than 2500 kVA being made in the future.

Minimising Copper losses

The major portion of copper losses is I2R losses.

Using a thicker section of the conductor i.e. selecting a lower current density can reduce the basic I2R losses. However, an arbitrary increase in thickness can increase eddy current losses. In general, decreasing radial thickness by section wise leads to reductions in eddy current losses. A properly configured foil winding is useful in this context. All the same, designers can always try to get minimum basic I2R and minimum eddy current losses for a given design and specified harmonic loading.

Information on the pros and cons of the available types of transformers frequently varies depending upon what information is made available by the manufacturer. Nevertheless, there are certain performance and application characteristics that are almost universally accepted.

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57

Interview

Asit Patel Managing Director

Ammann Apollo firmly believes in the motto of “Productivity Partnership for a Lifetime.� We are looking at a long-term partnership and for attaining market leadership in the Indian market.Apollo is the paver market leader in India in part due its strong product support efforts. The machines also are easy to operate and meet all governmental regulations.

58 CONSTRUCTION MIRROR

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Q. Brief us about your company and services that you are At BaumaConexpo 2016, Ammann Apollo presented a deep and wide range of products, including light compaction equipment, heavy rollers, pavers, and catering in?

On 10 April 2013, the Ammann Group – a worldwide leading manufacturer of asphalt mixing plants, compaction machines and asphalt pavers with headquarters in Switzerland – and India-based construction industry supplier Apollo Construction Equipment Ltd, launched their strategic partnership. The partnership for the Apollo Group subsidiary marks the entry of the Ammann Group into the Indian market for road construction equipment. The aim of the partnership with Apollo is to advance the group’s market position in the field of asphalt mixing plants, asphalt pavers and compaction machines in India and the adjacent regions.

The joint venture with the Indian market leader is head quartered in Ahmedabad, in the Indian state of Gujarat. It is directed by the experienced Apollo management team and supplemented by a number of Ammann employees. Once all the required permits have been obtained from the authorities, the joint venture will operate under the name “Ammann Apollo India Private Limited.”

Ammann is delighted to have found a partner of this high calibre. Apollo has been operating with great success on the Indian market for several decades.

Its key posts are staffed by members of the founding family, and the company embraces the same values as Ammann in its dealings with customers, partners and employees. Moreover, Apollo has a broad network of sales and service branches in India, and the company’s products ideally supplement the Ammann range in the global marketplace. Consequently, the joint venture will remain responsible for product sales in market regio nIndia, whilst the Ammann Group will now market the Apollo products worldwide. This partnership with Apollo hence serves to significantly strengthen the market position of Ammann in India and all over the world.

Ammann is a worldwide leading manufacturer of asphalt mixing plants, compactors and asphalt pavers. For nearly 150 years this Swiss family-owned company has successfully expanded its market presence. It manufactures its plants and machines at several locations in Europe, China and Brazil.

Q. Who are your major customers and competitors?

Ammann Apollo is a one-stop solution for all the construction equipment needs such as asphalt mixing plants, compactors and asphalt pavers. We have a broad client base of medium to large road contractors.

Q. How is the industry today and market trends?

A well-developed infrastructure is a foundation for growth in any country, paving the way for a better quality of life and a rapid rise in gross domestic product (GDP), especially for developing countries such as India. The government, through a series of initiatives, is working on policies to attract significant investor interest. The Indian government plans to develop a total of 66,117 km of roads under different programmes such as National Highways Development Project (NHDP), Special Accelerated Road Development Programme in North East (SARDP-NE) and Left Wing Extremism (LWE), and has set an objective of building 30 km of road a day starting in 2016.

Q. What is the USP of your company?

Ammann Apollo is a one-stop solution for world-class road construction machinery. Customers can choose from our wide product range consisting of asphalt mixingplants(Batch Type &Continous), tandem rollers, vibratory compactors, pavers, etc. The Company has full-fledged offices pan India to offer prompt after-market support.

asphalt plants. After-sales support efforts include retrofits, service and parts through the network serving India. The booth also featured the “brains” of plants, the industry-leading as1 Control System, as well as key core components including the Amix mixer and burner.

Two new counterflow asphalt-mixing plants were unveiled at the show. The Apollo CounterMix 90 and CounterMix 120 combine the simplicity of continuous drum-mix plants with the fuel-efficiency achieved through counterflow technology. The plants provide reduced operating costs, lower emissions and an ability to utilise RAP. The plants have capacities of 90 tonne per hour and 120 tonne per hour.

Ammann’s Light compaction equipment also was showcased. The machines offer a multitude of features, such as intuitive operation and vibration-limiting handles that make the compactors productive, safe and comfortable.Several models new to the Indian market were launched for the First time in India, including ACR 68 Rammer, APR 2220 Reversible Vibratory Plate Compactor, and APF 1250 and APF 1850 Forward-Moving Vibratory Plate Compactors.

Apollo pavers were featured at the show. Apollo is the paver market leader in India in part due its strong product support efforts. The machines also are easy to operate and meet all governmental regulations. Apollo paving products include hydrostatic pavers, mechanical pavers, curb pavers, brooms and bitumen sprayers.

The AP 800 Hydrostatic Track Paver was introduced at BAUMA CONEXPO INDIA 2016. The paver features a high traction track system and is equipped with the Apollo TV 4900 screed, capable of 7 m widths and with environmentally-friendly LPG heating system.

Also shown for the first time at BAUMA CONEXPO INDIA was the new MOBA dashboard for the main operator and the screed operator platforms. The dashboards enable simple machine operation. Shown first on the AP 800, the control panels will also be implemented on AP 600 and AP 1000 pavers in the next few months.

The ARX 91 Ammann Tandem Asphalt Roller has set a new technology standard.

The new roller features exceptional compaction performance and quality when working on a variety of materials. It is combining with Apollo pavers to develop the Indian highway infrastructure.

The ABA UniBatch Asphalt-Mixing Plant: Versatility makes UniBatch one of the most popular Ammann plants. The plant is among the lower-cost alternatives and is easy to operate and maintain. It also is known for its reliability. The high-recycling RAH 50 Dryer was also on display with the plant.

The Ammann as1 Control System: The proprietary system, the “brains” of the plant, can monitor energy consumption, material usage, material flow and other factors that significantly impact productivity and profitability.

Amdurit: Ammann’s proprietary wear-protection system provides three times the service life of wear-resistant steel and protects valuable parts and components.

The components last longer, which translates to fewer replacements and reduced labour, and therefore, lower costs. Overall plant uptime is improved as well.

Service: AmmannApollo has significantly strengthened its product support coverage in India and those strides were also showcased. Service products include preventive and other maintenance packages and burner services and calibration.

Q. What kind of major challenges you are facing in your industry because of Governance policy?

Q. Please share your new products launch during financial The construction industry is the second-largest employment generator in the year 2016-17. economy after agriculture. Construction is integral to supporting India’s growing ||www.constructionmirror.com||

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Interview

AP 240 PNEUMATIC TYRED ROLLER

need for infrastructure and industrial development. The growth of the industry to complete the current target under PMGSY by 2019, and together with the is directly correlated to gross domestic product (GDP) growth. In the last five contribution of States, an amount of Rs. 27,000 crore is to be spent on PMGSY in years, construction as a percentage of GDP has been around 8%. The industry 2017-18. The pace of construction of The Pradhan Mantri Gram Sadak Yojana witnessed a slowdown in the last couple of years, mainly because of a slowdown (PMGSY) has accelerated to reach 133 km roads per day in 2016-17, as against in the economy, delay in project awarding and execution due to environmental an average of 73 km during the period 2011-2014. This investment on building clearance hurdles, aggressive bidding by players, lack of funding, land rural roads and highways would create the demand for different road building acquisition issues and policy bottlenecks. The continued governmental focus equipment including Compactors, pavers, asphalt-mixing plants, and others. on infrastructure development through increased allocation towards roads, Both new and used road building equipment will witness the demand during An Innovative Family Firm railways, irrigation, etc., would be beneficial for the constructionindustry. the period.

Ammann is a world-leading supplier of mixing plants, machines and Measures taken for faster resolution of issuesindustry, in projects under modelwill services to the construction with corePPP expertise in road-building Q. Share your future plan with us? encourage participation of the private sector. and transportation infrastructure. Our strengths are the forthcoming approach Ammann Apollo firmly believes in the motto of “Productivity Partnership for of ashare familyyour firm that operating for many years, coupled with our strong Q. Please viewshasonbeen budget 2017-18. a Lifetime.� We are looking at a long-term partnership and for attaining and well-established international presence. Since 1869, we have been setting Government has allocated Rs. 64,900 crore for construction and expansion market leadership in the Indian market. Our joint venture is forged by strong benchmarks in the road-building industry, thanks to countless innovations and of highways. Also 2,000 km of coastal connectivity roads will be developed in bonds, which demonstrate a connection that is long lasting and ready for major solutions that are as competitive as they are dependable. the next financial year. In addition, the government has allocated a sum of Rs. successes in the near future.

19,000 crore towards Pradhan Mantri on Gram Sadak Yojana (PMGSY)mixing in 2017-18 For more information compaction machines, plants and pavers go to www.ammann-group.com, www.apollo-equipment.com

60 CONSTRUCTION MIRROR

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APRIL 2017 ||

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61

Interview

|| Dimitrov Krishnan| | ||Vice President & Head of Volvo CE India ||

Volvo CE is the only major manufacturer with a presence in the three major operating sectors: road building, mining and general construction. In road building our excavators, compactors and pavers are used in various stages of the process.

62 CONSTRUCTION MIRROR

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Q

. To begin with, please share your overview on construction equipment industry of India?

Over the years, the construction equipment industry has seen several spikes and dips. Market conditions were extremely tough post 2011 however there was some respite in 2016 which saw the highest peak in volumes ever (with around 40-45%growth). Moreover, early this year the business saw a 30% y-o-y growth which is encouraging.

This growth can be attributed to the Government’s plans wherein the Ministry of Road Construction has been awarding numerous tenders – a lot national highway building activity, both expressways as well as state highways as well as national highways conversion from 4 lane to 6 lane – this is what is creating demand in the market.

Currently, we see a steady and continued growth with road construction driving development.

Q

. How has the business been so far for Volvo construction equipment?

This year business is booming. The y-o-y growth in Jan-Feb is 30% and we see the market growth gaining a positive momentum. We’re currently in a very strong position, with an excellent portfolio of products. We continue to maintain a market share of 40-60% and are regarded within the top 5 players in the industry.

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Q

. What sectors will play major role in the growth of CE industry/ Volvo CE?

Volvo CE is the only major manufacturer with a presence in the three major operating sectors: road building, mining and general construction. In road building our excavators, compactors and pavers are used in various stages of the process. For mining, our excavators, wheel loaders and articulated haulers can be found in operational functions; while our pavers and compactors are often used to build haul roads. In terms of general construction, because this sector is so broad, all of our equipment types may be used.

We expect growth in the road construction sector followed by mining, irrigation and basic infrastructure. This rise in demand in the road construction sector is a reflection of the maturing road network in India with many major routes now well into development – national highway building activity, conversion of highways from 4 to 6 lane, etc.

Q

. Volvo CE launched set of new products like single-drum compactor in 2016/17. Brief us more about it

Volvo CE is one of the leading suppliers of road building equipment in India and over the past 12 months the company has introduced three new machines for this sector, supporting the ambitious road-building program being driven by the Government of India.

Volvo SD110BA The updated SD110BA single-drum compactor from Volvo CE is designed with

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productivity in mind, combining powerful performance, quality compaction and versatility to adapt to earthwork compaction applications in India. Utilizing extensive knowledge of India’s paving and compaction industry, the next generation compactor is specifically manufactured to place and compact mixed soils, crushed aggregates and base materials beneath flexible pavements capable of accommodating heavy traffic volumes.

Delivering an efficient, powerful performance, the 11-ton class SD110BA combines dynamic drum forces and a heavy drum weight to produce the energy necessary to achieve material target density in fewer passes. With the highest centrifugal force in its class, the SD110BA delivers unmatched performance, ease of operation and outstanding output.

In addition, the Volvo SD110BA is designed to achieve high quality compaction and a flawless mat finish. Utilizing infinite frequency choices and dual amplitudes, the versatile machine gives operators the flexibility to modify the drum’s dynamic force according to material depth and type. With a flip of a switch, the operator can easily adjust the amplitude from the operator console to adapt to varying layer thickness, ensuring precise compaction.

The Volvo SD110BA not only increases output levels, it also enables operators to

access hard-to-reach areas of the jobsite thanks to the fully integrated traction control system. Preventing wheel slip provides stability when operating on steep inclines and slippery surfaces.

Q

. How do you visualize year 2017?

Last year, we saw a huge spike in the market growth and this year we will continue to see growth of about 25% full year basis. In comparison to other markets worldwide, India is one of the fastest growth markets in the construction equipment sectors, therefore we foresee a strong y-o-y market growth in 2017.

With regards to our business in 2017, we aim to increase our distribution network across the country so as to maintain our leadership position in the market. Furthermore, this year we aim to launch numerous products (whose details I will be unable to divulge currently). However among the new products, we aim to launch a nine-meter paver part of the C-series imported from Germany which will provide customers enhanced performance and operator comfort.

CONSTRUCTION MIRROR A Outlook of the Construction & Infrastructure Industry

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Special Column

Smart Meters to

Change Consumer Behaviour Smart Grids in Smart Cities ` Smart grids are cornerstone of some of Indian government’s important programs such as 100 Smart Cities, 175 GW of renewable energy by 2022, 40 per cent energy from non-fossil resources by 2030, 6-7 million electric vehicles and 24x7 power supply to all citizen. Smart grid technologies are the key enablers to resolve India’s energy woes, and address troublesome issues such as massive transmission and distribution losses and power thefts. City authorities plan to use IT and automation systems to instrument and integrate all infrastructure and services to optimize the assets as well as use analytical tools to predict demand, usage pattern maintenance, reliability, emergencies and other incidents. In the Indian context where cities do not have a single owner for all their myriad services, it is a Herculean task to integrate all infrastructure and services on a common platform. Extending the available digital platform of one domain (say power) to offer services in other domains (water, gas, traffic, security, pollution and noise monitoring etc) can be a starting point. The smart cities in India can be in two categories – existing cities that should be made smarter by integrating all services on digital platforms; and new green field cities that would be built as smart cities with integrated communication, IT and automation systems. The electricity infrastructure is arguably the single most important feature in any city. If unavailable for a significant enough period of time, all other functions will eventually cease.

DISCOM maintains GIS map of all electrical assets and customers which in effect cover the complete roads and buildings in a city. This is a very useful tool for other infrastructure domains such as water and gas distribution, transport, telecom etc. DISCOM in bigger cities has automated their electrical network with SCADA and DMS. Some of the physical infra of these SCADA/DMS can be shared

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for automating the water and gas distribution networks as well as managing the traffic and security cameras.

Most of the DISCOMs have state of the art billing and payment collection systems which can be leveraged for collecting the water bills and gas bills as well as house tax etc. Single bill for all utility payments and municipal taxes will be a huge relief for customers. Also they maintain 24x7 Call Centers in all cities which can be expanded as City Control & Command Centers at marginal cost.

Advanced applications such as mobile crew management systems which some of the forward looking DISCOMS are expected to implement soon. Again that platform can be shared with providers of several other services in a smart city. A smart grid addresses three things. First, it modernizes power systems through self-healing designs, automation, remote monitoring and control, and establishment of smart microgrids. Second, it informs and educates customers about their energy usage, costs and alternative options, to enable them to make decisions autonomously about how and when to use electricity. And third, it provides safe, secure and reliable integration of distributed and renewable energy resources. All these add up to an energy infrastructure that is more reliable, more sustainable and more resilient. Thus, a smart grid sits at the heart of a smart city, which cannot function efficiently without it.

Smart cities depend on a smart grid to ensure pliant delivery of electricity to supply their many functions, present opportunities for conservation, improve efficiencies and, most importantly, enable coordination between city control centre, other infra domain operators and those responsible for public safety. The smart city is all about how the city “organism” works together as an integrated whole and survives when put under extreme conditions. Energy, water, transportation, communication, public health and safety, and other aspects of a smart city are managed in concert to support smooth operation of critical infrastructure while providing for a clean, economic and safe environment in which to live, work and play. Under extreme conditions, the most critical functions of a smart city would

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be maintained and logistics information seamlessly coordinated with the public.

The smart grid would shed load in a predictable and more manageable fashion so that critical city infrastructure and functions are maintained such as police, fire, hospitals, water supply, sewage pumping etc, supported by microgrids.

Self-healing automation would restore power rapidly to areas where alternate routes are available. Local generation would be exploited to support most critical needs. The community (industry, commercial, residential) would respond, automatically, to reduce their energy needs to lessen the burden of restoration.

Transportation and traffic systems would coordinate with the energy systems to support critical transportation arteries and modes. Through it all, timely logistics information would be gathered and supplied to the public by all means available, but particularly through social media networks. Conservation, efficiency and safety will all be greatly enhanced through the availability of accurate logistical information on real time basis. Smart cities, like the smart grid, will evolve slowly, but surely. They will fully harness, integrate and utilize information to be shared between departments, infrastructure operators and with citizens. Cities will partner with vendors to create integrated solutions, and the smart grid will become the part of a greater, more responsive urban ecosystem. Ultimately, with the smart city, we are all in it together.

Indian Smart Cities India is a country in a hurry and the land of opportunities. India’s GDP has jumped from $ 1 trillion to $ 2 trillion in the last 7 years. With a large young workforce in perpetual quest for better jobs and avenues, probably no other country has so much need to create world class infra at a breakneck speed as India has. The Narendra Modi government has given a tremendous boost to build Smart Cities in India by launching the Smart Cities Mission. The Mission has created avenues for major policy reforms and bold decision making to help make massive investments in city infra and making Indian cities smarter. These Smart Cities would essentially be a combination of converting existing cities into smart cities by a considerable amount of redevelopment, retrofitting as well as through creation of satellite towns around those major cities. The two schemes for Urban Development are: Smart Cities Mission for developing 100 Smart Cities and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) for rejuvenation of 500 towns across India.

1. Uttar Pradesh: 3. Maharashtra: Navi Moradabad, Aligarh, Mumbai, Nashik, Thane, Saharanpur, Bareilly, Jhansi, Greater Mumbai, Amravati, Kanpur, Allahabad, Lucknow, Solapur, Nagpur, KalyanVaranasi, Ghaziabad, Agra, Dombivali, Aurangabad, Rampur.

Dindigul, Pune.

2. Tamil Nadu: Tiruchirapalli, 4. Madhya Pradesh: Bhopal, Chennai, Tiruppur, Indore, Jabalpur, Gwalior, Coimbatore, Vellore, Salem, Sagar, Satna, Ujjain.

Erode, Thanjavur, Tirunelveli, 5. Gujarat: Gandhinagar, Dindigul, Madurai, Ahmedabad, Surat, Thoothukudi.

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6. Karnataka: Mangaluru, Belagavi, Shivamogga, Hubballi-Dharwad, Tumakuru, Davanegere 7. Rajasthan: Jaipur, Udaipur, Kota, Ajmer 8. Andhra Pradesh: Vishakhapatnam, Tirupati, Kakinada 9. Bihar: Muzaffarpur, Bhagalpur, Biharsharif 10. Punjab: Ludhiana, Jalandhar, Amritsar 11. Telangana: Greater Hyderabad, Greater Warangal 12. West Bengal: New Town Kolkata, Bidhannagar, Durgapur, Haldia 13. Odisha: Bhubaneshwar, Rourkela 14. Goa: Panaji 15. Assam: Guwahati 16. Chhattisgarh: Raipur, Bilaspur

17. Haryana: Karnal, Faridabad 18. Himachal Pradesh: Dharmshala 19. Jharkhand: Ranchi 20. Uttarakhand: Dehradun 21. Kerala: Kochi 22. Manipur: Imphal 23. Meghalaya: Shillong 24. Tripura: Agartala 25. Mizoram: Aizawl 26. Nagaland: Kohima 27. Sikkim: Namchi 28. Puducherry: Oulgaret 29. Lakshadweep: Kavarrati 30. Delhi: NDMC 31. Daman and Diu: Diu 32. Dadra and Nagar Haveli: Silvassa 33. Chandigarh: Chandigarh 34.

Andaman and Nocobar Islands: Port Blair

Why India Needs Smart Cities India's rapid modernization over the last two and a half decades has essentially centered around cities built long time back. With opportunities remaining limited in rural areas, people are migrating to cities in search of better earnings and life styles. This has resulted in haphazard expansion of areas adjacent to the existing major cities. However with amenities and urban infrastructure always getting overwhelmed by a countless number of people moving in every day, planned development and expansion of Indian cities hardly ever got the due attention it deserved. Additionally, a large number of suburban clusters have also mushroomed in India to cater to the living requirements of people.

Till now India could still sustain with whatever band-aid or say incremental development it did for cities. But this approach would not be sustainable in the times to come when there would be an exponential increase in the number of people in India aspiring to live in cities. As per a report by India’s NITI AYOG the Indian cities contribute around 62-63% of India’s GDP which is expected to go up to 75 % by 2021.

Smart Grids Can Be An Anchor Tenant for The Smart City After all, nothing else works without electricity. The design of communications should obviously cater to all Smart Infrastructure of the city. We must take bold steps towards Smart Grids which can provide solutions to Smart Cities. If one were so inclined, how does one eat an elephant? One bite at a time. ISGF along with our members and other key stakeholders conducted 2 brainstorming workshops and prepared Standard Framework for Infrastructure Domains of a Smart City. We anchor around Smart Grid for the development of Smart Cities in India because digital assets created under various programs can be directly leveraged by other service providers and utilities to build smarter infrastructure.

All state owned electricity distribution companies (Discoms) in India are

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Special Column

implementing a set of basic IT and Automation solutions under the ongoing R-APDRP scheme of the Ministry of Power. Some of the digital assets created under this program that already covers 1411 towns can be leveraged to build smarter cities at lower marginal costs. List of digital assets and smart infrastructure created under various schemes of Ministry of Power are as follows: 1. GIS Map of the Towns 2. Billing and Customer Relationship Management (CRM) Systems Common Command and Control Centre 5. Outage Management Systems (OMS) and Mobile Workforce Management (MWFM) 6. Application Integration List of Selected 20 Smart Cities for Phase 1 in Smart Cities Mission - Bhubaneswar (Orissa), Pune (Maharashtra), Jaipur (Rajasthan), Surat (Gujarat), Kochi (Kerala), Ahmedabad (Gujarat), Jabalpur (Madhya Pradesh), Vishakhapatnam (Andhra Pradesh), Solapur (Maharashtra), Davanagere (Karnataka), Indore (Madhya Pradesh), New Delhi (Delhi), Coimbatore (Tamil Nadu), Kakinada (Andhra Pradesh), Belgaum (Karnataka) Udaipur (Rajasthan), Guwahati (Assam), Chennai (Tamil Nadu), Ludhiana (Punjab), Bhopal (Madhya Pradesh).

Status of Smart Grid Pilots and NSGM Smart Grid Projects Till Jan’17: Awarded CESC, Mysore: Evaluated Project Cost: Rs.32.56 Crs, GoI Support: Rs.16.28 Crs. Consultant – POWERGRID. V V Mohalla Division, Mysore (21,824 Consumers). Adopted Functionalities: AMI-R, AMI-I, OMS, PLM, MG/DG. Project awarded to M/s Enzen Global Solutions in March 2014 at a cost of Rs.32.56 Crs excl. FMS. 1st & 2nd instalments (Rs.8.14 Crs) of MoP share released to utility.

18000 single phase smart meters, 333 DCUs, 158 TMUs, 5 FPIs and 130 HT modems installed. 13,000 smart meters & 80 modems communicating to MDM. 5 RTU/data loggers for SCADA installed in substations. Inspection of 3-phase meters completed at factory. UAT and integration of applications under progress.

HPSEB, Himachal Pradesh: Evaluated Project Cost: Rs.19.45 Crs, GoI Support: Rs.9.73 Crs. Consultant – POWERGRID. Kala Amb Industrial Area (1,554 Consumers). Adopted Functionalities: AMI-I, OMS, PLM. Project awarded to M/S Alstom T&D in February 2015 at a total cost of Rs.24.99 Crs inclusive of maintenance charges of Rs.6.42 Crs. First instalment of Rs.2.43 Crores released to the utility from MoP. 1065 smart meters (885 single phase and 180 three phase) installed. Control Centre setup (servers, networking) completed. Type testing of DTMU and FPI completed. Relays installation under progress. Integration of MDM (Smart Grid) with existing billing system and approval of revised meter quantity is under progress.

UHBVN, Haryana: Approved Project Cost: Rs.35.94 Crs, GoI Support: Rs.0 Crs. Panipat City Sub Division (11,000 Consumers). Adopted Functionalities: AMI-R, AMI-I, PLM, OMS. Project is being implemented under grant from NEDO (Japan)

by M/s Fuji Electric & Co., Japan. Site survey completed. Engineering for control centre hardware and software completed. 10 smart meters delivered to HPTI for testing. SCADA and AMI at HPTI completed. PO placed for BIS approved Smart Meters procurement.

APDCL, Assam: Evaluated Project Cost: Rs.20.92 Crs, GoI Support: Rs.10.46 Crs. Consultant – MEDHAJ. Guwahati distribution region (15,083 Consumers).

Adopted Functionalities: AMI-R, AMI-I, PLM, OMS, PQ, DG. Project awarded to

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M/s Phoenix IT Solutions in March 2015 at a cost of Rs.29.86 Crs inclusive of FMS and training charges of 1.47 Crs. First instalment of Rs. 2.61 Crs released to the Utility from MoP. 500 single phase (5-30A whole current) and 6453 three phase (10-60A whole current) smart meters delivered. Prototype testing of 3-phase LT CTPT and HT CTPT completed. Single phase (5-30A) and three phase (10-60A) net meters not yet submitted for prototype testing. Draft regulations notified

by AERC. PSPCL, Punjab: Evaluated Project Cost: Rs.7.16 Crs, GoI Support: Rs.3.58 Crs. Consultant – POWERGRID. Tech-II Sub-division, SAS Nagar (2,737 Consumers).

Adopted Functionalities: AMI-R, AMI-I, PLM. Project awarded to M/s Kalkitech in Mar’15 at a cost of Rs.8.17 Crs inclusive of training and AMC charges of 1.32 Crs. First instalment of Rs.89.5 Lakhs released to the Utility from MoP. Survey completed. Design documents approved. 1st FAT of single and three phase smart meters failed. 2nd FAT call to be taken up by end of Feb’17. UPS and batteries installed at control centre.

WBSEDCL, West Bengal: Approved Project Cost: Rs.7.03 Crs, GoI Support: Rs.3.52 Crs. Consultant – POWERGRID. Siliguri Town in Darjeeling District (5,265 Consumers). Adopted Functionalities: AMI-R, AMI-I, PLM. Project awarded to M/s Chemtrols in June 2015 at a cost of Rs.8.10 Crs inclusive of training and maintenance charges of Rs.0.34 Crs. First instalment of Rs.87.87 Lakhs released to the Utility from MoP. Site survey completed. DRS for Smart Meters and DCUs were approved. Type testing reports of RF modules of smart meters yet to be submitted. Revised DRS for control centre hardware and software awaited.

TSECL, Tripura: Approved Project Cost: Rs.63.43 Crs, GoI Support: Rs.31.72 Crs. Consultant – POWERGRID. Electrical Division No.1, of Agartala town (45,290 Consumers). Adopted Functionalities: AMI-R, AMI-I, PLM. Project awarded to M/s Wipro in September 2015 at a cost of Rs.80.08 Crs inclusive of training and maintenance charges of 16.98 Crs against the MoP approved cost of Rs.63.43 Crs with utility bearing the additional cost. First instalment of Rs. 7.93 Crs released to the Utility from MoP. Survey completed. Control centre building ready. Type testing of meters completed. 4553 smart meters (4343 single phase and 210 three phase) and 46 DCUs installed. Next lot of 4908 smart meters and 50 DCU are under dispatch. Control centre hardware and software installed.

TSSPDCL, Telangana: Evaluated Project Cost: Rs.34.93 Crs, GoI Support: 17.47 Crs. Consultant – CPRI. Jeedimetla Industrial Area (11,906 Consumers).

Adopted Functionalities: AMI-R, AMI-I, PLM, OMS, PQ. Project awarded to M/s ECIL, Hyderabad in October 2015 at a cost of Rs.35.86 Crs. First instalment claims forwarded to MoP. Field survey completed. PoC on one DTR taken up. 28 smart meters (20 single phase, 6 three phase and 2 CT) installed for PoC study.

Smart meters submitted to CPRI, Bangalore for type testing on 02.02.2017.

Draft regulations submitted to TSERC on 29.06.2016.

PED, Puducherry: Evaluated Project Cost: Rs.35.53 Crs, GoI Support: Rs.17.76 Crs. Consultant – POWERGRID. Division 1 of Puducherry (34,000 Consumers). Adopted Functionalities: AMI-R, AMI-I. Project awarded to M/s Dongfang Electronics, China in May 2016 and agreement signed on 06.07.2016 for total project cost of Rs.43.91 Cr. First instalment of Rs.4.44 Crores released to the Utility from MoP. Field survey completed. DRS and FDS documents submitted for approval and are under review.

Sample meters submitted to ERTL (Kolkata) for testing & certification.

AVVNL, Ajmer: Ajmer City (1,000 Consumers) (PoC). Adopted Functionalities: AMI. Completed installation of 1000 smart meters (500-Radius and 500-JnJ meters).

Project was successfully completed and made operational. Training for utility personnel conducted on 22.11.2016 at Ajmer. Evaluation of project and envisaged outcomes under progress.

IIT Kanpur Smart City Pilot: Approved Project Cost: Rs.12.5 Crs, GoI Support: Rs.6.25 Crs. Smart City Pilot in IITK Campus. Rs.4.69 Crores released to IIT Kanpur as initial funding from MoP. 20 houses for home automation identified. Solar PVs

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installation completed. Storage batteries & grid connected inverters installed in 3 houses. Smart meters are installed in 19 houses having rooftop solar PV. – SCADA/ EMS installation under progress.

Smart Grid Knowledge Center, Manesar: Approved Project Cost: Rs.9.8 Crs, GoI Support: Rs.9.8 Crs . Adopted Functionalities: AMI, OMS, MG/DG, EV with Charging Infra, HEMS, Cyber Security & Training Infra. Building under construction. Contracts awarded for Home Energy Management System, Workstations/Training Room Hardware and Furniture for Smart Grid Knowledge Centre FAT to be taken up for OMS and detailed engineering is under process for AMI. QR evaluation is under process for Microgrid component.

Status of Smart Grid Pilots and NSGM Smart Grid Projects till Jan’17: Under NSGM UGVCL, Gujarat: Approved Project Cost: Rs.82.70 Crs (Naroda & Deesa), GoI Support: Rs.41.35 Crs. Naroda of Sabarmati Circle (22,230 Consumers).

Adopted Functionalities: AMI-R, AMI-I, OMS, PLM, PQ. Scope revised to Naroda area only and fresh tenders floated in May 2016. (Needs approval of Monitoring Committee along with reduced approved cost for Naroda only). Tenders opened on 07.12.2016. Six bidders participated. Two bidders qualified. Price bids opened on 30.01.2017. Evaluation under progress.

CED, Chandigarh: Approved Project Cost: Rs.28.58 Crs, GoI Support: Rs.8.6 Crs (@30%). Smart Grid Project at Sub Division 5 of Chandigarh (29,433 Consumers). Adopted Functionalities: AMI, DT monitoring, S/S Automation, Rooftop Solar PV, IT infra. Project was approved by Empowered Committee of NSGM on 29.03.2016 for a cost of Rs.28.58 Crores. Sanction letter to CED was issued on 22.04.2016. Smart Grid cell and SLPMU formed. RECPDCL appointed as Project Management Agency. Tender documents under preparation.

Amravati, MSEDCL, Maharashtra: Approved Project Cost: Rs.90.05 Crs, GoI Support: Rs.27.02 Crs (@30%). Smart Grid Project at Amravati Town of Maharashtra (1.48 Lakh Consumers). Adopted Functionalities: AMI, OMS, DR. Project was approved by Empowered Committee of NSGM on 29.03.2016 for a cost of Rs.90.05 Crores. Sanction letter to MSEDCL was issued on 22.04.2016.

Tender floated on 22.12.2016. Pre bid meeting held on 10.01.2017. Bid submission scheduled for 06.02.2017. SLPMU formation and signing of TPA/ BPA awaited.

Congress Nagar, MSEDCL, Maharashtra: Approved Project Cost: Rs.139.15 Crs, GoI Support: Rs.41.74 Crs (@30%). Smart Grid Project at Congress Nagar Division of Nagpur (1.25 Lakh Consumers). Adopted Functionalities: AMI, SCADA, OMS, DR. Project was approved by Empowered Committee of NSGM on 27.10.2016 for a cost of 139.15 Crs. Sanction letter to MSEDCL was issued on 29.07.2016. Empowered Committee in its second meeting on 27.10.2016 approved the project. Tender floated on 22.12.2016. Pre bid meeting held on 10.01.2017. Bid submission scheduled for 07.02.2017. SLPMU formation and signing of TPA/BPA awaited.

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KESCO, Kanpur – Approved Project Cost: Rs.319.57 Crs, GoI Support: Rs.95.87 Crs (@30%). – Smart Grid Project at Kanpur City (5.39 Lakh Consumers). – Adopted Functionalities: AMI, PLM, DT Monitoring, DG. – Project was approved

by Empowered Committee of NSGM on 27.10.2016 for a cost of Rs.319.57 Crores.

– Sanction letter to KESCO was issued on 17.11.2016 with recommendations of Empowered Committee. – Acceptance of sanction letter awaited.

Power Companies Tap Smart Meters to Change Consumer Behaviour Pattern Consumers will soon start getting messages from local power utility companies to switch off an air-conditioner or any other high power consuming appliance to avert a power cut during peak hour. For instance, Tata Power Delhi Distribution Ltd (TPDDL), which supplies power in the north and north-western parts of the national capital region, is set to install smart meters for 20 lakh customers that will detect their usage pattern and help in managing the load.

TPDDL has selected Landis + Gyr Ltd., a unit of Toshiba Corp. for building the communication network and to install smart meters on the premises of customers. The investment in smart metering will help the company save 25 MW peak power requirement, said Sinha.

To meet the peak demand in mornings and early evenings, distribution firms have to get into ‘take or pay’ deals with power generation companies and have to pay a part of the power tariff even if the agreed power is not lifted. With data on usage pattern of consumers, distribution firms will be able to modulate the load and flatten the peak power demand by requesting consumers to use some of their appliance at non-peak hours. A mall, for example, could be requested to switch off some of its escalators for some time, explained Sinha. “Smart metering will facilitate two-way communication between the consumer and the utility, reduce losses and help in delivering better service. It will also help in detecting attempts at tampering with the meter and address the issue of power pilferage. TPDDL is set to make an initial investment of Rs200 crore, which will cover roughly 2 lakh smart meters. The cost will get built into the power tariff to the consumer. For consumers, shifting some of the power consumption to non-peak hours will bring savings as utilities will charge a lower tariff in those hours.

At present, this facility is available to large consumers who use 10 kilowatt per hour (kwh) is expected to be extended to those using 5kwh or more. The company is in discussions with other utilities too to install smart meters and to build the wireless communication network required to operate it. That include Reliance Power Ltd-owned BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd, which supply electricity to about 3.5 million residential, institutional and business consumers in Delhi and some of the state-owned utilities which are able to invest in smart metering. The BSES companies are in the process of covering consumers who use more than 500 units a month by the end of this year in the first phase installing smart metering. The government’s revised power tariff policy announced in January 2016 recommends use of smart meters.

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Guest Article

Volvo Buses Rolls Out Next Generation City Bus with BMTC The Euro IV and UBS-II norms compliant bus features a ‘Made in India’ 8-litre engine.

Volvo Buses India announced the rollout of the Volvo 8400 City Bus featuring a ‘made-in-India’ 8-litre engine. The bus is the first step towards Volvo Buses fulfilling an order for 100 nos. of the next generation city bus placed by the Bengaluru Metropolitan Transport Corporation (BMTC).

Featuring a new 8-litre enginemanufactured by the Volvo Group JV in Pithampur, the bus is compliant with UBS-II norms apart fromBSIV emission norms.

R. Ramalinga Reddy, Honourable Minister for Transport, Government of Karnataka accepted keys to the bus.

Commenting on the rollout of the bus, Martin Lundstedt, President and CEO of the Volvo Group said, ‘Volvo Buses has been at the forefront of introducing new technologies and concepts in urban transport in India. Our privileged partnership with the BMTC has been integral to this journey. Having delivered the first city bus in 2006, we are proud to note that the BMTC now has over 700 Volvo Buses in its fleet. This order for the next generation of city buses are the start of the next phase of our shared drive to promote sustainable mobility.’

Dr. Ekroop Caur, Managing Director, BMTC stated, ‘Bengaluru’s urban mobility needs are growing 70 CONSTRUCTION MIRROR

rapidly. We are augmenting our fleet of premium buses to provide commuters a desirable alternative to personal vehicles that are leading causes of congestion and pollution.’

The locally manufactured Volvo D8C engine’s application is not restricted to India. ‘The ‘made-inIndia’8 - litres engine has performed very well during internal assessments. We are encouraged to deploy it in other international markets that Volvo participates in,’ shared Akash Passey, Senior Vice President, Business Region International, Volvo Bus Corporation.

All-round excellence

The Volvo D8C engine coupled with 6-speedautomatic transmission & integrated retarder and optimised rear axle ratio delivershigh performance required in city’s start-stop, meaning quick acceleration in theleast possible time to enable quickest transit time from bus stop to city road.The engine supplies a peak power of 330hp in order to meet optimal Power -to-weight ratio and ensure reserve power, which is critical to meet three areas; for good city duty cycle – instant acceleration,

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air-conditioning performance, and grade ability.

Designed to be a workhorse for 17-hour duty cycles, the bus is easy to drive and offers excellent handling ability, rollover protection and safety is further boosted by powerful disc brakes on all wheels, roll stabilisers and a true-bus suspension system. The doors are equipped with sensitive edge to prevent passenger injury during accidental door closure.

Volvo Buses has been proactive when it comes to the incorporation of safety features. The company has been compliant with the bus body code well in advance of notification. All buses are also fitted with ABS as a standard since 2005 – an initiative

by Volvo that became a mandate for the entire commercial vehicle industry only in 2015.

The buses are especially friendly for passengers with impaired mobility. With entry at just 350mm, it is easy to get on and off the bus and the kneelingfeature along with pneumatic lifting and lowering mechanism enables the body to be lowered, while passengers are boarding and alighting. The clear door width of 1200mm in the front and rear of the bus helps in comfortable and quick entry & exit.

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Volvo CE Crowns Its Operator Champion For India The search for India’s most talented equipment operator has concluded with Bheemappa K.S. from Karnataka taking the title. Volvo CE also used the event to highlight the importance of skills development in the construction industry and the vital role played by equipment operators.

Volvo CE is widely recognized as one of the world’s leading producers of construction equipment, and in particular the manufacturer focuses on equipping its machines with highly ergonomic cabs that feature advanced and intuitive operating technology. This is part of a long-held belief at the company that any machine is only as effective as the person operating it. By extension, the company also believes that by creating the best operating environment and systems, greater machine productivity can be delivered.

As part of its focus on equipment operation, the company runs a hugely popular Operator Champion contest in countries across the globe, and has just wrapped up its inaugural edition of the event in India. The competition in India concluded earlier this month with Bheemappa K.S from Karnataka scooping first prize and Narendra Singh from Rajasthan receiving runners up awards.

After presenting the awards to the champions, Dimitrov Krishnan, Vice President and head of Volvo CE India, said: “Our Operator Champion program has received excellent response from the Industry. We are celebrating the tremendous value that Equipment Operators bring to the Construction and Mining industry. Their role in nation building is to be celebrated. Through this Operator Champion program, we have connected with so many Operators and their networks around the country.

Our aim has been to make each one of them realise the important role they play, improve their competence and confidence. And to the winners, we hope the prize money will change their life to an extent."

“Our country is facing huge challenges in terms of infrastructure development and it’s essential we continue to focus on skills development to help us meet the ambitious targets we face. The men and women that sit at the controls of our equipment have the power to deliver real change in our built environment and this is something we should be celebrating as a nation.”

The Operator Champion final took place between March 14th and 16th at the Volvo CE headquarters in Bangalore. The three day event welcomed each

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of the winners from the nine regional heats, which were staged over the past 18 months. There were a host of VIPs at the event, including Gaurav Kapoor, head – industry partnership & CSR at SCC Engagements, part of the National Skill Development Corporation.

His presence reflected the ongoing focus on skills development within the Government of India.

On the first day of the finals the attendees were recognized for their achievements thus far and also given VIP tours of the Volvo CE facilities in Peenya and Hosakote. On day two, there was a full day of competition with two rounds scheduled at the Hosakote Customer Center.

Each finalist competed in a range of challenges – against the clock – to test speed, dexterity, logical thought and more.

Operators were challenged on both live equipment and simulators, for both excavator and wheel loader operating systems.

For the final day, the operators took part in a further round of competition before reconvening later that day for the announcement of the winners at the closing gala dinner. Some 100 people attended this celebration, including senior leadership from

Volvo, government officials, major construction contractors and representatives from Volvo dealerships. In addition to receiving the Operator Champion trophy, the winner received a cheque for 5 lakh rupees, while the runners up each received 2 lakh rupees.

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Guest Article

EICHER TRUCKS & BUSES INTRODUCESAMT TECHNOLOGY IN COMMERCIAL VEHICLES

Eicher Trucks &Buses, part of VE Commercial Vehicles Limited, today introduced state-ofthe-art AMT (Automated Manual Transmission) technology in commercial vehicles. This reinforces our vision ofdriving modernization incommercial transportation. This breakthrough technology has been adapted based on the OptiDrive™ technology designed and developed by WABCO, renowned for its services in Driveline Automation.

The AMT technology will be available in the complete range of LMD and HD buses (from 9T to 16T) and Medium Duty haulage truck application in the first phaseand the same will be extended to other applications later on.

WABCO’s OptiDrive™ is modular automated manual transmission (AMT) technology for trucks and buses that increases fuel economy while reducing emissions. A breakthrough in AMT technology, it transforms a manual transmission into a highly efficient, integrated solution for commercial vehicles, which automatically shifts gears and operates clutch actuation at optimal speed.

This technology frees drivers from frequent gear-shifting, reducing their stress and fatigue.

This means drivers can focus further attention on road and traffic conditions, resulting in increased driver comfort while improving vehicle control and road safety. OptiDrive™ systems also minimize any performance gap between highly skilled and less experienced drivers.

Commenting on the this milestone development,Vinod Aggarwal, MD& CEO, VE Commercial Vehicles said, “It’s a matter of

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extreme pride for us to be one of the pioneers In addition, we will continue to support this major in introducing a break-through technology inthe customer through a range of advanced vehicle Indian CV industry. Eicher Vehicles are known for best fuel efficiency Pro Range by ETB withAMT Technology: and the introduction of this technology will further enhance • 2 Pedal System with Auto Gearshift For driver comfort this advantage. Apart from fuel eliminates the manual actuation of clutch pedal and efficiency, this technology will gear shift lever With this the fatigue and stress of driver also improve comfort, safety and is reduced. efficiency that are the most critical • Hill Start Assist feature for no vehicle rollback while aspects of driving these days.” driving on a gradient Jacques Esculier, WABCO Chairman • Optimized Gear shift strategy optimized for best & CEO said, “We are proud to further utilization of Engine and Transmission to deliver the extend and deepen our partnership best performance and higher Fuel economy with VE Commercial Vehicles, • High Clutch Life increasing the overall uptime and particularly through WABCO’s profitability of customer. Improved operating efficiency OptiDrive™ modular automated by reducing wear on transmission components, resulting manual transmission solution, in lower maintenance costs and higher utilization over a breakthrough technology for the vehicle’s lifetime. our industry. The award-winning OptiDrive™ for trucks and buses • Safe Driving drivers focused on road and traffic enables improved fuel economy conditioneliminateschances of fatal accidents. Gears and reduced emissions, as WABCO can be shifted at appropriate speed and RPM which supports the leadership mission eliminates the wrong gear shifting while driving. of VE Commercial Vehicles to continuously improve commercial transportation efficiency in India and other markets through technology, safety and safety and efficiency technologies.” environmental care.”

The new Pro series of AMT enabled vehicles will Esculier further added, “Our unique capability to be manufactured in the Eicher Trucks and Buses design, develop and supply OptiDrive™ solutions facility located in Pithampur, Madhya Pradesh, in India for VE Commercial Vehicles’ latest light, where Eicher produces its complete range of 4.9T medium and heavy duty bus and truck platform to 40T commercial vehicles. further differentiates WABCO.

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About Eicher Trucks & Buses

Eicher Trucks and Buses has the lineage of three decades of operations in India. Eicher Trucks and Buses (ETB) is present in the L/MD segment with a strong presence in the 4T-15T truck segment and an ever increasing market share in 16T-49T heavy duty trucks segment. Eicher has unveiled its entire new range of future generation trucks and buses, named the “Eicher Pro’’ series. Adopting the most professional and holistic approach to modernize the Indian trucking industry, the new brand philosophy is to “Go Pro”. Eicher’s new Pro series trucks and buses promise to deliver best-in-class fuel efficiency, higher loading capacity, superior uptime and overall vehicle life time profitability

About VE Commercial Vehicles Limited (VECV): VE Commercial Vehicles Limited (VECV) is a joint venture between Eicher Motors Limited and the Volvo Group. In operation since July 2008, the company includes the complete range of Eicher

branded trucks and buses, VE Powertrain, Eicher’s components and engineering design services businesses, the sales and distribution business of Volvo Trucks as well as aftermarket support to Volvo Buses in India. VECV vision is to be recognized as the industry leader driving modernization in commercial transportation in India and the developing world.

About WABCO INDIA

WABCO INDIA designs, manufactures and markets conventional braking products, advanced braking systems, and other related air assisted products and systems. The company has achieved a major market share in the Indian OEM market as well as in the domestic aftermarket, which it serves through a strong nationwide distribution network. With five world class manufacturing facilities, software design center, application engineering center and a test track in India, WABCO INDIA excels in engineering and manufacturing. WABCO INDIA employs over 3,200 employees and reported Rs.1872 Crores in

VE Commercial Vehicles Limited (VECV) divests entire holding of Eicher Engineering Solutions Inc. (wholly owned subsidiary of VECV) in United States of America (USA)

About WABCO

WABCO (NYSE: WBC) is a leading global supplier of technologies and services that improve the safety, efficiency and connectivity of commercial vehicles. Founded nearly 150 years ago, WABCO continues to pioneer breakthrough innovations for advanced driver assistance, braking, stability control, suspension, transmission automation and aerodynamics. Partnering with the transportation industry as it maps a route toward autonomous driving, WABCO also uniquely connects trucks, trailers, cargo, drivers, business partners and fleet operators through advanced fleet management systems and mobile solutions. WABCO reported sales of $2.8 billion in 2016. Headquartered in Brussels, Belgium, WABCO has 13,000 employees in 40 countries. For more information, visit www.wabco-auto.com.

VE Commercial Vehicles Limited has divested 100% shares of Eicher Engineering Solutions Inc. (wholly owned subsidiary of VECV) in United States of America (USA) to SegulaTecnologiasEspana, S.A.U., a Spanish corporation. The total enterprise value of this deal is $1,852,000(One million eight hundred fifty two thousand US dollars) Commenting on this divestment, Vinod Aggarwal, MD & CEO VE Commercial Vehicles said, “This divestment is part of VECV’s focused plans towards driving modernization in commercial transportation in India and the developing world. Our immediate business outlook continues to remain positive and we are on track with all our strategic plans and initiatives.”

CONSTRUCTION MIRROR A Outlook of the Construction & Infrastructure Industry

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sales in 2015-16. For more information, visit www.wabco-auto.com/en/wabcoindia/home

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GUEST ARTICLE

SHRIRAM AUTOMALL INAUGURATES ITS FANTASTIC NEW AUTOMALL FACILITY IN SAHARANPUR Shriram Automall inaugurates its 64th Automall in Saharanpur, Uttar Pradesh on 19th January 2017 to satisfy the demand of pre-owned vehicles & equipment in Saharanpur and nearby locations

• WITNESSING INDUSTRY’S BEST FOOTFALL OF OVER 75+ CUSTOMERS • OVER 60 USED VEHICLES & EQUIPMENT FOR DISPOSAL • 42 OUT OF 65 VEHICLES DISPOSED

Uttar Pradesh being one of the largest states of India receives major demand of pre-owned trucks, construction equipment, farm equipment, passenger vehicles & two wheelers to ensure timely completion of various projects running in the state. By opening maximum number of Automalls in the state we aim to contribute our part towards national development. Our new Automall facility in Saharanpur will bring our professional services near our customers doorsteps and we aim to serve thousands of customers in Saharanpur and nearby areas.” said Mr. Sameer Malhotra, CEO Shriram Automall People from left to right Mr. M.I Abbasi, Executive Director & CEO – North – 1 Zone, STFC & Mr. Sameer Malhotra, CEO SAMIL January 19, 2017, New Delhi, Shriram Automall India Limited (SAMIL), India’s Largest Service Provider for Exchange of Pre-owned Vehicles & Equipment, inaugurated its 64th Fantastic Automall facility in Saharanpur. The Automall is the 19th facility in the North Zone and is in line with the aggressive expansion plans of the company. Spread across a sprawling area of land, The Automall is strategically located at the Centre of Roorkee, Haridwar, Saharanpur & Mujfarnagar & is just 300 meters away from the Talheri. The Automall promises complete solutions to the pre-owned vehicles and equipment related needs of transporters, contractors, dealerships, manufacturers and individual buyers.

People from across the locations of DEOBAND,

ROHANA, MUZAFFARNAGAR, NAGAL, ALIPURA region will be reaping benefits of Shriram Automall’s Holistic services and unique platforms for easily acquiring and disposing used vehicles & Equipment.

In conjunction with the grand inauguration ceremony, a live bidding event was also held at the Saharanpur Automall where over 60 used vehicles & construction equipment were displayed on the ramp for the customers to bid on out which the company successfully disposed over 40 used vehicles by the end of the day.

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Moreover health checkup facility and easy finance assistance by Shriram Transport Finance Company (STFC) was also provided to all customers to get instant finance easily.

AUTOMALLS – North Zone Manesar Pathankot Ludhiana Jammu Jaipur Kota Bilaspur Hapur Udaipur Amritsar Delhi Karnal Kanpur Hisar

Faizabad Faridabad Shimla Jodhpur

Shriram Automalls bidding events have become the best platform to buy and sell used vehicles & equipment in the most organized and transparent way, customers get to choose from a plethora of options.

The company utilized both Traditional & Digital Marketing methods to reach out to maximum people. Social media promotion was carried out extensively on all company profiles for couple of days. SMS and Telecalling activities were carried out for Saharanpur and nearby customers to make the event a successful one.

For more information, please contact: Ms. Jyoti Jain (NH-Marketing of SAMIL) SHRIRAM AUTOMALL INDIA LIMITED 2nd Floor, Best Sky Tower, Netaji Subhash Place, Pitampura, Delhi-110034 Tel: 011-41414444, Fax: 011-42414444 E-Mail: contact@samil.in Website: www.samil.in ||www.constructionmirror.com||

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EVENT DIARY Concrete Show 2017

Month/Date Location Phone Email Website

Excon 2017

: 04-06, May 2017 : BCEC, Mumbai : +91 22 61727154 : Mugdha.karekar@ubm.com : www.concreteshowindia.com

: 12-16, December 2017

Location

: BIEC, Bangaluru, India

Phone

: +97898 08994

Email

: excon@cii.in

Website

: www.excon.in

Andhra Pradesh Construction Expo

Automation Expo 2017

Month/Date Location Phone Email Website

Month/Date

: 09-12, August 2017 : Bombai Exhibition Centre, Mumbai : +91-22-22079567 / 22073370 : arokiaswamy@iedcommunications.com : www.iedcommunications.com

Month/Date

: 2nd,3rd, 4th June 17

Location

: Amravati

Phone

: 9989113036

Email

: constructionexpoap@gmail.com

Website

: www.apconstructionexpo.com

Roof India Expo 2017

IFAT India 2017

Month/Date Location Phone Email Website

: 26-28, September 2017 : Bombai Exhibition Centre, Mumbai : +77380 570001 : info@ifat-india.com : www.ifat-india.com

Date

: April 20-22, 2017

Location

: Mumbai,

Organizer

: BEC

Ph

: 022- 42863900.

Email

: info@abec.asia

Project Qatar 2017.

IME 2017

Project Qatar 2017.

Month/Date Location Phone Email Website

: 08-11, November 2017 : Eco Park, Kolkata : +91-11-49857777 : gayatri@tafcon.com : www.internationalminingexhibition.com

Date

: May 8-11, 2017

Venue

: Qatar

Organizer

: IFP.

Phone

: 97444329900

Email

: info@ifpqatar.com

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7th IME 2017 ...................................................................................................................................................... 55

7th IME IME 2017 2017 .............................................................................................................................................. ...................................................................................................................................................... 23 55 7th Aggcon 09 Aggcon Equipments Equipments International InternationalPvt Pvt Ltd. ........................................................................................................

09 Aggcon Equipments International PvtLtd. Ltd......................................................................................................... ................................................................................................. 17 Ajax Fiori Engg Ltd ................................................................................................................................

15 Ajax fiori FioriEngineering Engg (I) (I) Pvt. Pvt.(I) LtdPvt ................................................................................................................................

15 Ajex Ltd. ............................................................................................................... 09 Automation Expo 2017 58 Automation Expo.........................................................................................................................................

2017 ...................................................................................................................................... ...................................................................................................................................... 07 58 Ammann Apollo Balkrishna Industries Limited ............................................................................................................................

11 Balkrishna IndustriesExpo.

Limited ............................................................................................................................ 21 11 2nd AP Construction .........................................................................................................................

Bender Bender India India Pvt. Ltd. ........................................................................................................................................

Ashirvad pipesPvt. Pvt.Ltd. Ltd........................................................................................................................................ ............................................................................................................................... I25 25 BC Cater Pillar 03 Case ....................................................................................................................................... 05 CaterConstruction Pillar ......................................................................................................................................................... .........................................................................................................................................................

03 ConCat ..............................................................................................................................................

29 ConCat India India ...................................................................................................................................................... ...................................................................................................................................................... 25 29 Conquest project Pvt. Ltd ........................................................................................................................... 71 ConMac ....................................................................................................................................................

39 ConMac -2017 -2017 ....................................................................................................................................................

39 Excon 2017 ........................................................................................................................................

Escorts Constructions Equipment 51 EscortsIndia Constructions Equipment........................................................................................................................ ........................................................................................................................ 61 51 IFAT India .................................................................................................................................................... 78 Equipment Planet Equipment Planet .............................................................................................................................................. .............................................................................................................................................. 21 21 India Expo. ............................................................................................................................. BC 57 ExconWarehousing India 2017 2017 ................................................................................................................................................ ................................................................................................................................................

BC Excon India Indo Farm Equipment Limited ..................................................................................................................

IFC IFAT India India ........................................................................................................................................................... ........................................................................................................................................................... 49 49 IFAT JSW Steel Ltd......................................................................................................................................................

03 Indo Farm Farm Equipment Equipment Limited Limited ........................................................................................................................... ........................................................................................................................... IFC IFC Indo Layher Scaffolding Systems Pvt Ltd .................................................................................................................. 53 Layher Scaffolding Scaffolding Systems Systems Pvt PvtLtd Ltd................................................................................................................... ................................................................................................................... 43 43 Layher Schwing Stetter ......................................................................................................................................... BC Mahindra Construction Construction Equipment Equipment.................................................................................................................... .................................................................................................................... 01 01 Mahindra Prince Pipes & Fittings Pvt Ltd .................................................................................................................... 19 Siddhi Vinayak Vinayak Enterprises Enterprises ................................................................................................................................ ................................................................................................................................ 57 57 Siddhi Siddhi Vinayak Enterprises ......................................................................................................................... 77 Sureka Teknik Teknik Pvt. Ltd. Ltd. ...................................................................................................................................... 07 07 Sureka Sureka Teknik Pvt. Pvt. Ltd ...................................................................................................................................... ................................................................................................................................ 11 Vashi Electricals Electricals Pvt. Pvt. Ltd. Ltd. .................................................................................................................................... .................................................................................................................................... 13 13 Vashi Surya Roshni ..................................................................................................................................................13 VE Commercial Commercial Vehicles Vehicles ..................................................................................................................................... ..................................................................................................................................... IBC IBC VE Zenith Industrial Industrial Rubber Rubber Products ProductsPvt. Pvt.Ltd Ltd........................................................................................................ ........................................................................................................ 17 17 Zenith

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The available space in the main frame allows easy accessibility to the hydraulic components and hoses and reduces weight.

The radio remote control with its intuitive keys and warning systems helps operators to quickly learn to operate the pump.

The rock valve combines with the open hydraulic circuit reduces operating costs while enabling concrete pumping of higher pressures.

The repeated filtering and cooling due to the open hydraulic circuit reduces heat generation and component wear saving money in the long run.

THE MOST RELIABLE CONCRETE BOOM PUMP

S 43 SX

Only the SX outriggers allow enough room to install a long stroke pump kit. That means less change overs and less wear for better economy.

The operator can check all operating pressures with one glance. Compressor, water system, and maintenance switch for the piston change mode are within easy reach.

RNI No. DELENG/2013/53728 . Postal Regd. No. DL(E)20/5449/2014-2016. Posted at Krishna Nagar P.O. Delhi 110051 on 14th/ 15th of every month . English . Monthly

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